The energy crisis that has engulfed the world, especially Europe, has also begun to be strongly felt in the region. One of the first countries seriously affected by this crisis is Albania, whose government has recently started to discuss and approve measures to mitigate the significant negative impact this crisis may have on the well-being of its citizens.
The crisis has also begun to be felt indirectly in Kosovo. For some time now, we have seen rising prices of widely consumed goods, increases that also result from the rise in fuel prices. As is known, most of Kosovo’s consumption comes from imports. In this regard, any movement in energy prices in the countries of origin also affects the Kosovo market. Another significant impact of this crisis in Kosovo has recently become evident in the prices of petroleum derivatives. The increase in fuel prices greatly affects many other sectors of social life, such as transportation, which in turn influences the prices of basic goods.
However, the greatest negative impact is expected to be on electricity tariffs. Despite the low-cost energy production Kosovo can secure during the winter months, our demand for energy increases significantly compared to generating capacities. If we compare just the last three years, we see that imports exceed energy exports by hundreds of GWh during the first and fourth quarters of each year. During the upcoming winter months, we will need to import energy, and this import—priced at five times higher (according to KEDS officials) due to the crisis—will make electricity very expensive when tariffs are revised next April. Global forecasts indicate that the energy crisis will last at least until June of next year.
According to statistics from the Kosovo Agency of Statistics, households account for 60% of energy consumption and consumers for 9%, while the remaining consumption is made up of commercial entities, industry, and public enterprises. Naturally, crises of any kind, especially the energy crisis, affect low-income families the most. According to data obtained from the Tax Administration of Kosovo (TAK), approximately 11,000 people in Kosovo have a monthly income of no more than 80 euros, while around 100,000 others have a monthly income between 80 and 250 euros. Such wages are nowhere near sufficient to cover the cost of living even without this energy crisis and the increase in consumer prices. They will be absolutely insufficient to cope with the new, higher cost.
The Government of the Republic of Kosovo must take this crisis seriously and act promptly to mitigate its costs. The government’s request to stop using electric heating would make sense only if better alternatives were available. Currently, in Kosovo, the only alternatives to electric heating are coal and firewood. Their prices will rise with increased demand. Furthermore, coal heating during the winter months becomes one of the largest sources of air pollution in Kosovo’s settlements, especially in Prishtina. The use of firewood remains one of the biggest destroyers of Kosovo’s forests.
While countries like Albania and also EU countries have already begun taking measures in this regard, there is no public discussion in Kosovo about addressing the crisis.
EU countries have allocated hundreds of millions to absorb the impact of the energy crisis. The United Kingdom has allocated 680 million euros; France, 580 million euros; Greece, 500 million euros, and so on. Meanwhile, the Government of Albania has issued a Counteraction Plan with these three points:
1. Ensuring uninterrupted electricity supply for everyone.
2. Protecting families and small businesses from the increase in electricity prices.
3. Ensuring the necessary liquidity fund for interaction with the electricity market, including sovereign guarantees from the state and funds of 100 million euros for OSHEE by the end of this year and 100 million at the beginning of next year.
It is urgent that the Government of the Republic of Kosovo approve a crisis plan to address the energy crisis. We must as soon as possible secure uninterrupted electricity supply for households and our economy, maintain affordable prices—especially for families in need—and ensure that the energy crisis does not irreversibly damage the liquidity and business operations of our enterprises, thereby preserving jobs.
Prishtina, October 21, 2021