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Introduction

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The Government of Kosovo has taken a decisive step towards more effectively harnessing the country’s fossil fuel resources for urgently needed economic and social development. Its first major undertaking toward this end is the Lignite Power Technical Assistance Project.

power supply, old unreliable power plants that need to be replaced and coal mine that will be depleted by 2010. The environmental and social legacy is a heavy one, while demand for electricity continues to grow at high rate, particularly in the household sector, with envisaged growth in industry sector.

Kosovo’s power sector as we know it today is the result of capital investments carried out several decades ago (19621984). Those investments included development of Bardh and Mirash mines, with total coal reserves of 300 million t, and construction of power plants Kosovo A and later Kosovo B with a total installed capacity of 1,478 MW.

Since 1999 more that 50 technical studies, papers and reports were prepared by consultants funded by the donor community focusing on mining, generation, power sector restructuring, legal, environmental and social issues in the power sector. Conclusions and recommendations of these studies were presented in the Kosovo Energy Strategy.

During the 1990s, due to political and economic situation, the power sector stagnated; there was no needed expansion of the mines and no expansion of Kosovo B, as was originally planned at that time. Today, nearly two decades later, this is reflected in insufficient

To implement the recommendations of the Strategy within the framework of a competitive and liberalized energy market adhering to European standards and international best practice, the Lignite Power Technical Assistance Project (LPTAP) was initiated.


Lignite Power Technical Assistance Project

The Lignite Power Technical Assistance Project (LPTAP) aims to help the Government of Kosovo (GoK) build an enabling investment environment that will attract private investors to develop lignite mines and build new capacity for lignite thermal power generation on a socially and environmentally sustainable basis. The LPTAP objective will be attained through: (a) developing and strengthening the enabling policy, legal and regulatory frameworks in the energy sector, including mitigating environmental impacts and developing a framework for expropriation and resettlement; (b) developing an institutional structure and capacity to implement the broader sector strategy, including mobilizing financing and dealing with Foreign Direct Investment in the energy sector; and (c) technical consultancies to seek qualified strategic investors in the proposed independent power plant (IPP) and mine. The Project management structure is comprised of the following managing bodies: • The Project Steering Committee (PSC) chaired by Ministry of Energy and Mining (MEM) • The Project Office (PO) set up under the MEM subordination The managing body of the Project is the Project Steering Committee whose overall responsibility is to coordinate and supervise all LPTAP operations. For implementation of Strategy Objectives, large capital investments are required, and to ensure that this transaction is fully compliant with EU legislation, Government

of Kosovo under the World Bank’s LPTAP grant has procured services of: (i) Transaction Adviser, (ii) Legal and Regulatory Adviser, and (iii) Environmental and Social Safeguards Advisers to develop a transaction proposal that will be formally issued to ‘investors’ as a Request for Proposal. Key role of the Transaction Advisors is to successfully conclude negotiations leading to a financial close with a competitively selected bidder. This process is called a Transaction. The Transaction process has three phases: • Preparatory work • Preparation and issue of RFP • Negotiations and Financial Close Legal advisors provide legal support to the transaction. They review the legislation, propose amendments or new pieces of legislation and they offer legal support during the negotiations. Work of Legal Advisors is divided into two parallel activities: • Legal and Regulatory Framework Development • Transaction Support Environmental and Social Safeguards advisors are providing support on environmental and social related issued of the transaction. Key objectives of Environmental and Social Safeguards Advisors are: • Preparation of Strategic Environmental and Social Assessment • Preparation of “New Mining Field Spatial Development Plan” • Environmental Impact Assessment procedures and Training.

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Development Scenarios

In considering alternative development scenarios for the proposed New Kosovo Power Plant (KNPP) and new mining field development, sector strategies and studies were reviewed in terms of energy production and demand, role of lignite and economic justification for its development. Also a Strategic Environmental and Social Assessment (SESA) have been prepared. The area of interest for the proposed development includes Bardh and Mirash lignite mines, Kosovo A and Kosovo B lignite fired thermal power plants (TPP) and the disposal sites related to the TPPs and mines, which are located mainly in the Municipality of Obiliq, about 15 km NW from the city of Prishtina. The proposed New Mining Field (NMF) is situated north of the Bardh and Mirash mines. While the final installed capacity has yet to be decided by the Government of Kosovo, the alternative development scenarios foresees staged development of KNPP with a total installed capacity of up to 2,000 MW (1,000 MW + 1,000MW at a later stage) and development of a associated new lignite mine. Three potential locations of the KNPP have been assessed, size of units assessed is in range between 300 MW and 500 MW each, with state of the art supercritical technology (PF or CFB). The project’s principal benefit will be to make Kosovo self-sufficient in energy, and provide it with the potential for generating revenues from energy export. In addition, it is expected to have the following important benefits, among others: • Reclamation of mining areas, ash dumps and overburden (at the new mine as well as previously contaminated areas); • Lower total atmospheric emissions (NOX, SO2 , particulates); • Improvement/modification of existing infrastructure (Iber-Lepenc canal, electricity grid, roads, etc.); • Soil remediation;

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The major anticipated impacts of the project are the following: • Higher water consumption, • People/villages to be resettled; • Land use modification; • Higher total lignite consumption; • Higher total CO2 emissions (but lower specific CO2 /MWh emissions). Proposed mitigation measures may include: • Reducing water consumption through recycling of industrial water; • Development of a river basin management plan for the Iber-Lepenc system along the guidelines of the EU policy as specified in the EU Water Framework Directive; • Development of water infrastructure investment plans and feasibility studies for the Iber-Lepenc system, identified in the river basin management plan; • Revision of the water legal framework to allow for long-term water usage rights for industrial water users and mechanisms for addressing competing water demand; • Development of a policy framework and criteria to guide strategic allocation of water resources to various water using sectors with competing water demands; • Installing appropriate noise barriers to reduce noise disturbances; • Supporting research on best methodology to reduce CO2 emissions; • Reclaiming old mine areas; • Urgently reducing particulate emissions from mines, power plants and ash disposal; • Revamping Kosovo A and Kosovo B to bring them in line with EU standards; • Construction of a wastewater treatment plant and sewer system; • Establishing an adequate monitoring system; • Adoption of resettlement policy framework; • Adoption of a spatial development plan


Development Scenarios

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Frequently Asked Questions

1. What is the Kosovo’s energy demand and current domestic generation capacities? The electricity consumption from 2,864 GWh in 2000 has increased to 4.944 in 2008. During this period (2000-2008) the consumption has increased by 1.7 times. Actual annual energy production from domestic generating capacities is estimated at 4,100 GWh to 4,600 GWh. This production does not meet the actual energy demand, therefore one part is imported and the consumption operates with regular electricity brown-outs. The average annual increase of consumption during 2000 – 2008 is 7%. This means with this trend we can expect the consumption to double within 8 years period. 2. What are the energy sources in Kosova? Kosova, in its territory with an area of 10.908 km2 and a population of 2.1 million people, does not possess all main energy sources, but only few of them. Kosova does not have hydrocarbons. Kosova has vast lignite type coal with estimated reserves of 14 billion tons (or 3.7 billions tce), and potential to generate 800 GWh of electricity a year from its water potential.. 3. How much coal was used in Kosova until now? It is estimated that around that up to date only 3% of total exploitable coal reserves in Kosova basin, or 300 million tons have been exploited during the period 1962-2008. Around 136 billion kWh (77 TWh in Kosova A power plant and 58 TWh in Kosova B), around 1.2 billion m3 of gas, 7 million tons of dry coal, and thermal energy have been produced from this amount of coal. Exploitation of coal from other sources is currently not developed (i.e. Dukagjini Lignite Basin). 4. What is the hydro-potential of Kosova? The annual potential of technically useable hydro energy is estimated at 800 GWh a year.

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If this total potential would be exploited, compared with the total energy consumption in 2008 it would represent only 16%. This proportion would decrease with the increase of demand for energy, and it would account for 9.5 to 13% of the 2010 forecasted energy consumption. 5. What is the current structure of usage of energy sources in the world? Energy production in the world is currently based on fossil nuclear concept. There is a wide use of energy sources generated from the oil. Around 35% of energy used for different purposes is of oil origin, 24% from coal, 21% for natural gas and 20% from other sources (biomass, nuclear, water potential and other renewable energy sources). 6. What technology, environmental standards and unit sizes will be applied in New Kosova Power Plant? State-of-the-art and commercially proven units use Combustion Fluidized Bed (CFB) technology or pulverized coal combustion (PF). Such technology is fully compliant with present EU Directives on protection of environment (LCPD 2001/80/EC). With the development of power plant technology it would also be possible to install the CO2 capture equipment. Both technologies (PF and CFB) are available for the construction of New Kosovo Power Plant. From the Kosovo electricity system stability point of view, the individual unit size can be up to 500 MW net. 7. Where will the water supply for New Kosovo Power Plant come from? As part of the planning process for the building the New Kosovo Power Plant, a feasibility study for water supply was prepared. The water for operation of New Kosovo Power Plant will be secured from the accumulating lake on the Iber river.


Other LPTAP Activities

Air Quality Monitoring Program The LPTAP also includes a component aimed at collecting relevant environmental data for further assessment of the proposed project during its implementation, i.e. preparation of Environmental Impact Assessments. The Environmental Baseline Data Monitoring Program and Environmental Data Register is a field sampling and testing program to collect environmental baseline data in the project area. The program will monitor environmental emissions and pollution levels in air, which will be used in models to create insight into the distribution of pollutants caused by lignite, mining and power generation and other activities in the area and their migration in time. The collected data will be used to set up an environmental data registration system in Ministry of Environment and Spatial Planning to be used for monitoring, reporting and statistical purposes. Renewable Energy Options The LPTAP is also looking at development of power generation capacities by utilizing available renewable energy resources, specifically hydropower, securing peak power and reserve capacities that could enhance the operations of Kosovo Power System. There are two specific projects that fall under this component, namely: • Review of HPP Zhur Feasibility Study and preparation of Preliminary Environmental and Social Impact Assessments • Conceptual Study of Pump & Storage HPP at Ujmani/Gazivoda Accumulation.

HPP Zhur The Zhur Hydroelectric Power Plant (HPP) is a storage type plant. The facility is located to the SW of Prizren, at the territory of Prizren and Dragash/Sharr Municipalities. The available gross heads of maximum 683.5 m and minimum 643 m, approximately, are harnessed by two power plants, the HPPZhur I near village Zhur and HPPZhur II at the Drini I Bardhe River. Water harnessed for power generation is discharged into the Drini i Bardhe River. Hydroelectric power plants of the Zhur system are peaking plants with rated power of 305 MW and average annual output of 397.59 GWh, and they will be integrated into the Kosova Power System through a switchyard, i.e. two 220 kV transmission lines. The plants are expected to be in operation at rated power for approximately 1,400 hours a year. Ujmani Pump Storage HPP Under this component a possibility and options will be examined to convert the exiting Ujmani HPP, with actual installed capacity of 35 MW, to a pump storage facility with possibility of increasing its capacity to the maximum. By converting this HPP to a pump and storage facility the Kosovo Power system may benefit from high quality renewable power plant, better optimization of the thermal power plants operations, and increased the security of supply.

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Ministry of Energy and Mining LPTAP Project Office 24 Maji Street No.15 10000 Prishtina, Republic of Kosovo T: + 381 38 213 770 F: + 381 38 213 772 E: info@lignitepower.com W: www.lignitepower.com

Funded by the World Bank

LPTAP Brochure EN  

Lignite Power Technical Assistance Project

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