TIRANA, April 24 – A 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 about a year, with negative effects on plans to create a common regional market and missed earning in both countries.
The Euro 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.
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, have not had an effect so far.
The Energy Community, whose mission is to extend the EU internal energy market to South East Europe and beyond on the basis of a legally binding framework, says the problem is more of a political character between the two countries.
Dirk Buschle, the deputy director of the Energy Community, says the problem is not technical and there is no solution in sight yet.
“This line cannot be made operational. This is a political issue and we are not happy about this,” Buschle has told reporters, adding that the dispute will be discussed again in the upcoming July Trieste summit as part of the Western Balkans Berlin Process.
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.
“The Albanian transmission operator incurs losses between €500,000 to €1 million, but this is not the only loss. Had the interconnection been operational, transmission costs would be lower. This interconnector was not only supposed for the Albanian and Kosovo markets, but transmitting electricity regionally,” says Engjell Zeqo, the head of Albania’s electricity transmission operator, OST.
The KfW-funded project, initially delayed because of tender disputes on the Albanian section, cost Albania Euro 29 million. The 400 kV line is 241 km long, of which 90 km in the Albanian section.
