TIRANA, Sept. 15 – The German government is pushing for a deal between Serbia and its former breakaway province Kosovo over a long-standing electricity transmission dispute holding back a newly built German-funded Albania-Kosovo interconnection line.
Germany’s Economic Cooperation and Development Ministry has requested the Dispute Resolution and Negotiation Centre of the Vienna-based Energy Community Secretariat, an international organization dealing with energy policy, to facilitate stalled negotiations between the electricity transmission system operators of Serbia and Kosovo. The German authorities say they are concerned about this dispute frustrating investments in the energy sectors in the region and blocking the integration of the regional energy market in the Western Balkans.
The German intervention comes after an early 2014 deal between Serbia’s EMS and Kosovo’s KOSTT transmission operators has not been followed up and the dispute remains unresolved.
The Energy Community Secretariat says it will now reach out to the two governments concerned and organize the mediation process in the immediate future.
“Mediation in the dispute between EMS and KOSTT is also envisaged by the CONNECTA programme on the Regional Energy Market in the Western Balkan 6 countries, which the Secretariat implements for the European Commission,” the Energy Community said in a statement.
The Kosovo-Serbia dispute over the ownership of transmission assets in Kosovo territory has been holding back a newly built 400 kV interconnection line between Albania and Kosovo for more than a year, with negative effects on plans to create a common regional market and missed earning in both countries.
The €70 million German-funded interconnector was sensationally inaugurated in mid-2016 by the Albanian and Kosovo prime ministers who announced plans to set up a joint energy market and a power exchange helping Kosovo’s lignite-fired power plants and Albania’s hydro-dependent electricity system exchange electricity during their peak production levels, reducing dependency on costly imports.
An operational interconnection line could have helped Albania a lot this summer when a prolonged drought paralyzed the country’s wholly hydro-dependent domestic electricity generation due to water levels in the country’s biggest HPPs dropped to almost stoppage point. The prolonged drought, one of the worst in decades, forced Albania to spend some €60 million in costly electricity imports.
Previous warnings of sanctions against Serbia by the Vienna-based Energy Community Secretariat, an international organization dealing with energy policy, if the dispute was not settled until the end of 2016, did not have an effect. The Secretariat earlier described the dispute of a political character, saying the problem was not technical and there was no solution in sight.
Nine years after its independence from Serbia, Kosovo’s Transmission System and Market Operator (KOSTT) says it does not receive compensation for transmission going through its network and is barred from allocating transmission capacity on interconnectors in neighboring Albania, Macedonia and Montenegro. Serbia still de jure owns the Kosovo distribution grid while an EU-mediated deal between the Serbian and Kosovo transmission operators as part of the normalization of relations between the two countries signed back in 2014 has remained only on paper.
Serbia has requested the licensing of a Serbian operator in the ethnic Serbian majority inhabited northern Kosovo in order to recognize the Kosovo transmission operator, but Kosovo authorities say they cannot allow its licensing making reference to Kosovo as a Serbian Republic.
Losses incurred by the Kosovo electricity transmission operator from failure to collect transmission are estimated at about Euro 14 million a year. Kosovo’s transmission operator has yet to be recognized by ENTSO-E, the European Network of Transmission System Operators, in order to collect revenue.
Albanian authorities also say that in addition to having to pay back the loan, the country is losing up to Euro 1 million in missed earnings.
Losses incurred by the Kosovo electricity transmission operator from failure to collect transmission are estimated at about €14 million a year. Kosovo’s transmission operator has yet to be recognized by ENTSO-E, the European Network of Transmission System Operators, in order to collect revenue.
Albanian authorities also say that in addition to having to pay back the loan, the country is losing up to €1 million in missed earnings.
