News & Analysis

/28^th January 2019, RENEWABLE MARKET WATCH^TM/ All the Western Balkan countries have committed to increasing their share of renewable energy by 2020 to reach between 25 and 40 percent of their energy mix, as part of their obligations under the Energy Community Treaty. Western Balkan countries are planning to build nearly 3,000 MW of new coal power plants. The construction cost of these power plants could exceed EUR 5 billion. This conflicts with the Paris Agreement’s aim of limiting the average global temperature increase to 1.5 degrees Celsius, and in contrast with the situation in the EU, where most countries are giving up building new coal plants and seven EU states are already coal-free. At the end of this month, Germany announced plans to end its reliance on coal power plants by 2038.

What is the Current Power Market Situation in Western Balkans

The total installed power generation capacity in the Western Balkans region at the end of 2018 is 17,867 MW. According to energy experts of Renewable Market Watch™, many of the power generation facilities in this region are outdated and too centralized to be efficient. The Western Balkans constitute one-quarter of total energy consumption in the European Union, according to Eurostat data. Final energy consumption may grow by about 25% over the period up to 2030. Western Balkan countries have CO2 emissions three times the European Union average.

Despite serious political support from the governments of the most Western Balkan countries to coal power, we have observed since 2016 delay in investment intentions for some of the announced coal power plant projects. However, solar and wind power projects need less realization, building time, and investment cost than new coal power facilities. Their electricity generation cost is very close to those of coal power ones. Furthermore, Western Balkan countries, which plan to join the European Union (EU), will have to pay CO2 emissions from coal power plants. Western Balkan countries’ political leaders already think about increasing energy efficiency and installing more renewable energy capacity to diminish their coal dependency.

 Solar Photovoltaic (PV) Power in Western Balkans

Geographically, all Western Balkan countries are suitable for the production of photovoltaic energy throughout the whole year. The solar irradiation potential of the Western Balkan countries’ territory varies by the differences in the sunlight intensity between the countries. The average annual sunshine duration is roughly 2,130 hours. Also, high irradiation can sometimes be found on altitudes and terrains unsuitable for agriculture. In such cases, owners and municipalities would be motivated to sell or lease land that would otherwise generate little or no income.

Due to the lack of proper government support for solar photovoltaic (PV) energy in Western Balkan countries, the region trails far behind Western Europe and Central Europe in terms of cumulative installed solar PV capacity. However, this situation has started to change since 2015. Many new solar PV projects have been planned and commissioned in Western Balkan countries, reveals Western Balkans Solar Photovoltaic (PV) Power Market Outlook 2018÷2027.

Albania’s government targets to have 120 MW of solar PV capacity by 2020. HEP Group will build Croatia’s biggest solar PV power plant on the island of Cres with a 6.5 MW power capacity. Orlec Trinket East Solar Power Plant will be built on 17 hectares, about 2 km north from Orlec settlement on the island of Cres. The Ministry of Industry, Energy and Mining of the Republika Srpska has launched a tender for constructing a 65 MW solar PV power plant in the middle of 2018, intending to attract domestic and international investors. Macedonia’s first solar module factory started commercial operation in 2018. The factory is owned by the PikCELL Group in partnership with Solar ET and is a 100 % private investment. It has a production capacity of 20 MW of solar PV modules per year.

Wind Power in Western Balkans

Wind power plant developments in the Western Balkan countries are still limited and in the early development phase. A huge untapped wind generation potential characterizes the whole region. Although the wind speed is not as fast as northern Europe, the Western Balkans offers many very feasible wind generation sites. Particularly in the many higher mountainous regions that have higher altitudes and faster and more consistent wind speeds.

According to the Western Balkans Wind Power Market Outlook 2018÷2027, the number of wind power plant projects is quickly increasing. Albania’s government targets to have 70 MW of wind power capacity by 2020. Čibuk 1 Wind farm is a utility-scale onshore wind farm under development in Serbia. Due for completion in 2019, the 158 MW capacity Čibuk 1 wind farm will be the largest utility-scale commercial wind project in Serbia and the Western Balkans. Construction of one large scale wind project in Croatia has been started in the second half of 2018. The 156-MW wind farm, consisting of 39 wind turbines with 4 MW capacity each, shall be built by the Chinese company Norinco International and spread over 45 sq. km. territory. The project was supported by both the Croatian and the Chinese government.

Conclusions

Our observations have shown that the Western Balkans region has a vast potential for solar and wind energy project development while currently only a small share of that potential has been deployed. The region has a significant transformation potential towards a low carbon energy system. To overcome the future gap between energy supply and demand and consider the risks from global climate change, a lot of attention should orient to renewable energy sources (RES) in the Western Balkans countries.

Western Balkan countries are the newfound hotspot for solar and wind energy investments amongst European countries. The maturing Western European and Central European markets allowed investors to look for new opportunities in the Western Balkans region.

More information about deals, activities, projects under development, and legal regulations on Western Balkans solar and wind energy markets you may read here: Western Balkans Solar Photovoltaic (PV) Power Market Outlook 2018÷2027 and Western Balkans Wind Power Market Outlook 2018÷2027

For a better understanding of benefits from using our reports, you may read here: Benefit List – Reports of Renewable Market Watch – 2019

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