Kosovo has set ambitious objectives to orient the energy sector towards cleaner sources of electricity production or renewable energy sources (RE), especially for new capacities. By 2031, according to the Energy Strategy 2022-2031, it is planned to achieve a quintuple of the current capacities from these sources, to significantly reduce energy consumption as a result of increased investments in energy efficiency, to increase the heating network through central heaters, and more. These objectives are also in line with strategic documents and legislation of the European Union. However, Kosovo has had strategies every time. What has been missing beyond them has been and remains the low dynamics of work towards achieving the objectives.
In addition, uncertainties remain about the basic capacities, which although the Strategy foresees to be based mainly on the existing units of coal-fired power plants, now we see other options being discussed by the institutions outside of this strategy, specifically the coal gasification project. While in public, based mainly on (geo)political reasons, greater attention is being paid to the discussion that Kosovo should increase its gas capacities, within the project launched by the United States of America, to which almost all the countries of the Western Balkans are joining.
But, in the country, there has been an open debate between institutions and other actors of society, such as energy experts, about the way forward in this sector, developments and challenges, which should be encouraged by the policy-making institutions themselves, since the projects in this sector are long-term and affect future generations.
As a result of the low dynamics of the development of the energy sector, Kosovo risks falling behind the neighboring countries of the Western Balkans. Unlike some countries in the region, which have added one gigawatt (1 GW) of capacity for the production of energy from renewable sources in the last five years, in Kosovo during the same period, RES capacity has increased by only about 140 megawatts (MW). Likewise, substantial investments have not been made in network capacities at all levels and its modernization.
A just energy transition requires that no one is left behind. Affected communities should be supported, employees should be trained or retrained to work in the green sector, and companies should be more competitive. And for this, planning and sequenced activities are needed, which must be done through guidelines, but even here Kosovo is moving slowly, where even a draft of the guidelines for a just transition, put out for public consultation, seems quite general and in some cases without clear indicators.
What are the main obstacles in accelerating RES projects?
Bureaucracy: Currently, in Kosovo there are over 700 MW projects from renewable sources in various stages of development. However, most still remain in administrative procedures, while some investors have repeatedly requested postponement of the deadlines for the start of works or for the fulfillment of certain phases of the project. Among the main factors causing delays are the long procedures of equipment with permits and licenses, bureaucracy in this process, limited network capacities, lack of funding, property issues and other administrative obstacles. It is estimated that in Kosovo, the entire process, starting from the preliminary authorization until connecting to the network, can last up to three years. The institutions of Kosovo have failed to make reforms in this direction, which would be their most significant contribution. For example. Kosovo has created a One-Stop shop for applications for permits and licenses from investors to RES, but the same is mainly informative and not of any coordination of equipment processes with permits or specific licenses. Therefore, in line with the best models suggested by the Energy Community, Kosovo should consider a simplification and acceleration of the process of granting permits and licenses for RES projects.
Lack of investment areas for RES: In addition to the problems mentioned above, RES projects must also take into consideration the impact they can have on communities, on the environment and not to damage the surrounding ecosystems. Then, since RES projects are carried out in municipalities, which have many powers as a governing level, but at the same time lack of capacity and old strategic documents, such as regional maps that have not been updated or approved, this makes the processes even longer. Therefore, a very big reform would be if Kosovo defined some accelerated areas for RES projects, mainly in barren lands, and where it is precisely known that the negative impact of the projects on communities and the environment is minimal. These areas should also have other necessary conditions developed, such as transmission lines, etc. This reform would make the time between obtaining the license and starting the works by the investors to be very short.
Inefficient public institutions: Likewise, the increase of professional capacities within key institutions is extremely important. Human resources in institutions are among the key factors that can push forward processes, reforms, including the energy sector. The uniform policies about salaries in the public sector, changing them the same for all employees of the sector, does not attract the necessary expertise and moreover, the reduction of international funds that have provided technical assistance to many government institutions, has highlighted the problem in this direction even more, where the advancement of the legal basis and other processes in the energy sector have had a rather slow dynamic during the last two years.
Lack of financing: Investments in the field of energy are traditionally very expensive and carry greater risks. Commercial banks, including Kosovo, are reluctant to expose their portfolio to such investments. Statistics show that only about 5% of loans in Kosovo are long-term and the vast majority of them are destined to the real estate sector.
From 2026, the European Union has started implementing the Carbon Cap Adjustment Mechanism (CBAM), which imposes an additional cost on imports of carbon-intensive products from countries that do not have similar carbon pricing mechanisms. Although currently the number of affected Kosovar exporters is relatively limited, the impact of this mechanism is expected to increase gradually in the following years and may affect the competitiveness of Kosovo products in the European market. For this reason, public policies should support businesses in investing in decarbonisation, building capacity for emissions monitoring, reporting and verification (MRV), adopting more efficient technologies and developing the skills needed for the green economy. At the same time, institutions should offer financing schemes, technical assistance and better information to help businesses in this process. This would not only maintain the competitiveness of Kosovar exporters, but would make Kosovo even more attractive for new industrial investments, given its proximity to the European Union market and the potential for the development of new supply chains.
Although the construction of the legal framework and the realization of preliminary studies require time, Kosovo has the potential to accelerate the energy transition, especially since the interest of private investors to realize RES projects exists. The challenge remains if the institutions will manage to support this interest with reforms, coordinated policies, efficient institutions and financial instruments that make the transition feasible. Precisely for this reason, the energy transition should not be seen only as energy policy. It should be related to industrial development, education and professional training, financing, innovation and competitiveness of businesses. The GAP Institute, through over three years of work, has proposed the Framework for Green Industrial Policies as an approach that combines these policies in a single vision, offering concrete recommendations for accelerating the energy transition, strengthening the competitiveness of businesses and preparing the Kosovo economy for the new requirements of the European Union.
In the end, the success of the energy transition will not be measured by the number of strategies adopted, but by the projects that are realized, the investments that are attracted, the businesses that remain competitive and the citizens that benefit from it. This requires more than ambitious targets; it requires institutions that manage to implement them.
This Op-ED was drafted in the framework of the implementation of the regional project “Empowering the Western Balkans through Green Industrial Policies”, supported by the Foundations for Open Society – Western Balkans, where the GAP Institute leads the implementation of the project in the six countries of the Western Balkans. The contents of this Op-ED are the sole responsibility of the GAP Institute and do not necessarily reflect the views of the donor.
(The GAP Institute is a Think Tank founded in 2007 in Kosovo)
