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January 31, 2012

Why Is the State Department Pushing Coal on a Tiny Eastern European Country?

Smokestacks1That’s the question we have been asking the U.S. Government over and over, after discovering their steadfast support for plans to build an extremely expensive, extremely dirty coal plant in Kosovo. We first sounded the alarm over this project months ago and despite essentially admitting that our concerns are valid, the State Department and the World Bank are recklessly pushing forward a plan to leave the tiny country saddled with a heavily polluting new coal plant along with unsustainable levels of debt at a time when the EU’s debt crisis threatens the global economy.

So how do we know the project is so bad? We commissioned expert analysis from a former chief Environmental Protection Agency (EPA) enforcement officer who found glaring flaws (check out our initial analysis here) in the project design.

First and foremost he found that the plant will likely cost 2-3 times what project proponents claim. These costs would be borne by a country struggling to rebuild after years of war and would take the form of foreign debt that will have to be repaid by raising rates on average citizens. This is eerily similar to what happened with the World Bank’s last coal loan to Eskom and has led the nations leading nightly news program to ask probing questions about a “European Eskom.”

Even worse, he found that Kosovo doesn’t even need the power– they simply don’t have enough base load demand to justify such a large power project. In fact the project would lead to a generating capacity that is three times higher than existing demand and four times higher when corrected for avoidable losses.

This means Kosovo consumers (or the government) would have to service over a billion euro in debt at a time instead of investing in what Kosovo does need – an upgrade of its leaky electricity grid (an ancient relic left over from the soviet era that loses up to 40% of its supplies) and new forms of peak power (juice to power the lights when people wake up and when they come home from work). Reducing the losses from this leaky bucket, combined with job creating energy efficiency programs, completely eliminates the need for a dirty, expensive new coal plant.  

So how did State Department and the World Bank respond? Just months after we sent them our findings, the World Bank released a new report that supported our conclusions: a new coal plant will cost twice as much as they first estimated, and the country does indeed have significant clean energy potential. But, their central conclusion remained unchanged: Kosovo simply must have an expensive, un-needed, dirty new coal plant (you can see our rebuttal reaffirming that Kosovo doesn’t need a new coal plant here).

Given this response, it is clear that exploring alternative energy options that don’t threaten people’s health, raise their rates, or threaten unsustainable levels of debt are simply not in the cards at the State Department or the World Bank. As a result the country has become an epicenter of a struggle between local communities and powerful international players over the future direction of their young country.

Our members are standing firm with the citizens of Kosovo demanding the State Department relinquish support for this dirty new coal plant.

This project would rob a young generation of Kosovo citizens of the clean, healthy future they deserve. Join us in telling the State Department No Coal in Kosovo.

-- Co-written by Justin Guay of the Sierra Club International Campaign and Mary Anne Hitt, Director of the Sierra Club Beyond Coal Campaign.

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