Why is Kosovo going ahead with an lignite coal power plant that is extremely expensive and dangerous to health?

| 13th February 2018
Man in front of power station

A clean energy campaigner shields his face in front of the Kosovo B coal power station, which is doing much to destroy the small nation's health.

Sierra Club
Toxins in the air have reached “hazardous” levels in Pristina, Kosovo, last week. A ban on cars is welcome. But the real problem is the lignite coal plants nearby. So why is the Kosovo government, the US and the World Bank all supporting yet another new plant in the region? JACK DAVIES and GIOVANNI VALE investigate

The World Bank has been pushing for this heavily from the start, and now they’re stuck with it...There is a clear level of embarrassment in the World Bank for being involved in this.

“Don’t poison us, let’s save Pristina,” was the cry of hundreds wearing white masks as they took to the streets of Kosovo’s capital at the end of January to protest pollution that has reached “hazardous” levels in recent weeks, according to air quality data published by the US embassy.

Read Michael Brune of Sierra Club warning in 2014 about the World Bank's support of Kosovo's love affair with 'brown coal'.

The same week, in a widely praised move, the municipal government banned cars from the city centre. The ban has already increased quality of life for pedestrians in Pristina. But it is unlikely to make a real dent in pollution readings.

Ninety-seven percent of Kosovo’s electricity is generated by two lignite coal power stations on the outskirts of Pristina, according to a 2012 World Bank report. Lignite is one of the most environmentally unfriendly energy sources currently commercially in use.

Out of step

A 2013 study published in the Journal of the Academy of Medical Sciences in Bosnia and Herzegovina found that “[t]he largest air polluting source is the coal-burned power plant in Obiliq 5 km [from] Pristina.” The same study found a correlation between pollutants in the air and hospitalisations in the city.

Unfortunately for Kosovar asthmatics, their own government claims they are sitting on the fifth-largest deposit of lignite anywhere in the world. With more than a quarter of the workforce currently unemployed and the poverty rate sitting at around 80 percent, it is unlikely that policy makers in Pristina will turn their back on lignite any time soon.

In fact, late last year the government signed a deal with US engineering firm ContourGlobal for the construction of a $1.54 billion coal plant near the existing plants, which constitute two of the top-three most polluting coal plants in Europe, according to the Health and Environment Alliance

Despite issuing a moratorium on the financing of coal projects in all but “rare circumstances”, the World Bank has been an enthusiastic cheerleader for the project over the last decade and has even offered to stump up a partial risk guarantee for its costs. 

The World Bank has been pushing for this heavily from the start, and now they’re stuck with it...There is a clear level of embarrassment in the World Bank for being involved in this.

However, while it may not have turned its back on the project, Pippa Gallop, a regional researcher with NGO BankWatch, told The Ecologist the World Bank is aware how out of step with the times the project is.

Alternatives exist

“The World Bank has been pushing for this heavily from the start, and now they’re stuck with it,” Gallop said. “There is a clear level of embarrassment in the World Bank for being involved in this.”

And not without good cause. Kosovar political scientist Krenar Gashi was one of the first to sound the alarm on the project nearly 10 years ago while director of the Kosovo Institute for Policy Research and Development.

“I asked a World Bank representative whether there would be an environmental impact assessment and she said: ‘Yes, it’s going to be done by the American University of Kosovo [AUK]',” he recalled. “AUK at the time didn’t even have a masters program. Things just started to smell very fishy.”

Things only got fishier the more Gashi and his colleagues investigated. So they enrolled Nobel Prize-winning energy scientist Daniel Kammen, who then led a team of researchers in a feasibility study.

“We find that a range of alternatives exists to meet present supply constraints all at a lower cost than constructing a proposed 600 MW coal plant. The options include energy efficiency measures, combinations of solar PV, wind, hydropower, and biomass, and the introduction of natural gas,” the study concluded.

Civil society

“The results indicate that financing a 600 MW coal plant is the most expensive pathway to meet future electricity demand.”

In 2016 the Institute for Energy Economics and Financial Analysis (IEEFA) released a study of the project, finding that low-to-middle-income households will end up spending 18 percent of their annual incomes on electricity as bills increase to cover the cost of construction.

“IEEFA concludes that the World Bank, which has announced its support for a substantial financial subsidy for construction of the coal-fired plant, should invest instead in the development of renewable energy and energy efficiency in Kosovo,” the IEEFA concluded.

“[T]he US government, which has endorsed the project, should cease its support for the misguided introduction of a costly and outdated form of electricity generation.” 

But the US did not. Instead, on the day the contract between Kosovo’s government and ContourGlobal was signed, amid civil society objections, the US embassy issued a ringing endorsement of the project.

Four-lane highway

“We welcome yesterday’s agreement between the Government of Kosovo and Contour Global, which represents a huge step towards energy security in Kosovo,” the statement read.

It went on to claim that not only will the plant comply with European efficiency and emissions standards, but - seemingly paradoxically - “allow for more renewable energy sources to be integrated into the energy sector”.

But the last line of the press release is perhaps most telling: “Upon completion, Kosova e Re [the coal plant] will be the largest private foreign investment in Kosovo’s history.”

The US embassy in Pristina has a history of endorsing large infrastructure projects of questionable benefit to Kosovo but carrying significant financial reward for American contractors.

In 2010, Kosovo signed another billion-dollar contract with a US engineering firm. This time it was the Bechtel Corporation and the project was a four-lane highway to Kosovo’s southerly neighbour, Albania.

International diplomacy

At the time, Kosovo - which had just two years earlier declared independence - was being supervised by an institution known as the International Civilian Office (ICO).

The ICO’s most senior official, Pieter Feith, was dead set against the highway. The bill was equal to slightly over one-sixth of Kosovo’s GDP. He argued that it risked crippling the country’s finances while it was just beginning to get on its feet.

But Feith was overruled. Christopher Dell, then-US ambassador, lobbied hard in favour of the highway, going so far as to deny the ICO - which had executive authority in Kosovo - access to the terms of the deal.

Finally, in April 2010, Kosovo’s government decided to sign, against the counsel of its own lawyers. Less than a year after the project was completed, Dell controversially took a position with Bechtel.

Telling observation

Last December, half a decade after Dell left international diplomacy for the world of engineering, Kosovo signed yet another big-ticket contract with an American engineering firm in the face of numerous respected voices cautioning against it. 

Krenar Gashi, the political scientist, declined to speculate on what could have motivated his government to enter into such a seemingly unwise arrangement. He did, however, offer a telling observation.

“Whether there was a tit-for-tat or whether no one in the room had a better idea than to burn some coal, I don’t think it really matters,” he said. “The entire energy policy for the last 10 years has been built around it. The plant was not the means to the policy’s end, the policy was the means to the plant.”

These Authors

Jack Davies and Giovanni Vale are freelance journalists covering the Balkans from Zagreb. They can be found on Twitter at @jackoozell and @giov_vale

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