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Navigating the Western Balkans Energy Transition

The Western Balkans energy transition is at a critical juncture. Historically reliant on coal, countries in this region face substantial challenges as they navigate towards a sustainable energy future. As the world moves steadfastly toward cleaner energy sources, the Western Balkans grapple with the socio-political, economic, and environmental implications of this shift. This article delves deep into the intricacies of this transition, highlighting both the hurdles and the immense potential that lies ahead.

Coal Reserves and Their Implications

There are abundant coal deposits scattered around the region, with Kosovo claiming to have the fifth-largest stock in the world. In 2018, sixty-five mines produced 93 million metric tons of hard coal and lignite, constituting one-fifth of all coal produced in the EU.

Serbia’s reserves equal 192 times its annual consumption, whereas Bosnia and Herzegovina has enough for 264 years. Albania stands out with a staggering 6,000 years’ worth. Coal, therefore, is not just an energy source but also a significant employer. According to the European Commission, coal-based jobs total 138,000 across the Western Balkans and Ukraine. The dilemma arises from the fact that while coal remains a major employer, the harmful emissions it releases cannot be ignored. Although the region’s carbon dioxide emissions per capita align with the EU, its emissions of sulfur dioxide, nitrogen oxides, and dust pollution far surpass those of the EU.

Environmental and Health Implications

The 18 coal power plants in the Western Balkans emitted double the sulphur dioxide in 2019 compared to the 221 plants in all EU states combined. The following year saw an increase in regulated pollutants. The health consequences of this pollution are grim: thousands of premature deaths annually across the region, primarily due to cardiovascular diseases. Despite these clear costs, there hasn’t been enough political motivation to take decisive action.

One major challenge is the outdated energy sector structure, which is ripe for state capture. Massive state-owned entities control both the Thermal Power Plants (TPPs) and mines. These entities, while providing rent opportunities for political parties, also enable the government to manipulate electricity prices, often leading to significant losses. The resilience of this structure is maintained partly because, unlike their EU counterparts, Western Balkan energy producers are not subject to carbon pricing, making their coal-generated electricity competitive even for export to the EU.

Further complicating matters is the involvement of external players like China and Russia. Both countries, through their various initiatives and commercial deals, have agendas that conflict with the EU’s vision for the region. These relationships allow the region’s political elites to entrench their positions further.

The recent war in Ukraine and its resultant energy price spikes only added to the Western Balkans’ energy woes. Instead of being a catalyst for change, the crisis intensified the reliance on coal, reopening previously closed power plants or diverting them from coal to biomass.

A Glimmer of Hope: Renewable Energy

Despite these challenges, the Western Balkans holds immense potential for renewable energy. The region has experienced a surge in hydropower ventures since the 2010s, largely due to preferential tariffs and support schemes. But while hydropower can have adverse environmental impacts, focus is now shifting to more environmentally-friendly solar and wind projects. Serbia, for instance, has already awarded contracts for substantial wind and solar capacities.

Countries like North Macedonia and Kosovo are also setting ambitious renewable energy targets. However, the transition to renewables has inadvertently bolstered arguments for extending the life of coal-powered facilities.

For a successful green transition, EU support is crucial. A considerable financial gap exists between what EU member states receive and what the Western Balkans gets for climate objectives. Bridging this gap will require the region to tap into private investments, especially in solar and wind energy.

Come 2026, the EU’s Carbon Border Adjustment Mechanism could further stress the region’s energy sector, potentially costing over €500 million annually. To navigate these impending challenges, the Western Balkans must negotiate with the EU for a transition period to implement EU environmental rules. This period could then lead to an emissions trading scheme by 2030, potentially generating significant revenue for green energy projects.

Yet, challenges abound. Populist and anti-EU sentiments could gain traction, and subsidies for green energy could end up in the hands of the same entities that have historically benefited from state capture.


The energy crisis in the Western Balkans is multi-faceted, influenced by historical structures, political interests, environmental concerns, and external actors. However, the potential for a green transition exists, driven by the region’s renewable energy capabilities. To realize this potential, concerted efforts, both from within the region and support from the EU, are imperative. The path forward is tough, but the long-term benefits promise a brighter, sustainable future.

Feel free to contact the Energy Transition Centre today with questions. 

·  Julius Moerder, Head of Energy Transition Centre [email protected]

·  Oneyka Ojogbo, Head of Energy Transition Centre, Nigeria & West Africa [email protected]

·  Leon van Der Merwe, Head of Energy Transition Centre, South Africa [email protected]

Author: Memoona Tawfiq