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Coal-reliant Kosovo gears up for wind shift to hit EU target

By Fatos Bytyci

KITKA, Kosovo, June 29 (Reuters) - High on the Kika mountain plateau workers are installing Kosovo's first wind turbine, as the Balkan country tries to ease its reliance on coal and end power outages.

Kosovo aims to generate a quarter of its energy from renewable sources by 2020 to meet the standards of the European Union, which it aspires to join. But to achieve that goal it needs to attract more investment to shift away from coal.

At Kosovo's first wind farm, a total of nine 110 metre General Electric turbines will begin whirring in September and are expected to cover 3 percent of its demand.

Turkish energy developer Guris, which is behind the 32.4 megawatt (MW) wind farm, hopes it will kick-start clean energy in a country in dire need of cutting pollution.

"We will produce 110 million kilowatt-hours (kWh) per year, (which) will cover more than 10,000 households," Tuncer Baltaci, the project manager, told Reuters.

But with more than 14 billion tonnes of lignite reserves, the dirtiest form of coal, Kosovo relies on two ailing power plants which produce 95 percent of its energy.


MORE SUN THAN GERMANY

Western Balkan countries plan to invest billions of euros in new coal-fired plants to meet rising power demand as old plants are phased out and last year Kosovo agreed its biggest energy investment in nearly three decades.

It has contracted London-listed power firm ContourGlobal to build a 500 MW coal-fired power plant capable of meeting around half of its energy demand for around 1 billion euros ($1.16 billion).

The Energy Community, a body whose role is to extend the EU's energy policy to would-be member states, last week voiced concerns over tax and customs exemptions and the power purchase contract, under which Kosovo will pay 80 euros a megawatt-hour (MWh) for 20 years, nearly triple the current cost.

The government declined to comment on the contract.

The Word Bank said in June it has not yet decided whether to back the project. Kosovo's government had asked it for partial risk guarantees that would help unlock cheaper loans.

"Kosovo is not on the right path to reach this (EU) target," Dardan Abazi of the Institute for Development Policy (INDEP) think-tank said.

"We have more sun than Germany, so we are talking about a lack of priority rather than lack of renewable energy capacity."

Meanwhile, standing beneath one of its huge new turbines, Guris' Baltaci said that Kosovo should increase its wind power quota from a planned 150 MW. Another firm from Israel is planning to build a 105 MW wind farm in northern Kosovo.

"The government needs to give us a new quota and then we can invest in the second project to increase the capacity. Because here is a very good wind, very good resource and Kosovo needs this," he said. ($1 = 0.8643 euros) (Reporting by Fatos Bytyci; Editing by Maja Zuvela and Alexander Smith)