INDEP, Sierra Club, and RAEL’s Reply to the World Bank Group’s Kosovo’s Energy Options: Response to the Sierra Club/INDEP Report: Re- evaluating Kosovo’s Least Cost Electricity Option

In January 2012, the Sierra Club and the Kosovo Institute for Development Policy (INDEP) issued a report entitled Re-evaluating Kosovo’s Least Cost Electricity Option (Sierra Club/INDEP Report). 1 This report evaluated the World Bank’s proposed Kosovo Power Project, as described in the Bank’s December 2011 study, Development and Evaluation of Power Supply Options for Kosovo: A Background Paper (Background Paper). We pointed out a number of faulty assumptions and methodological limitations in the Background Paper that, taken together, substantially undermine the Background Paper’s claim that Kosovo needs a new coal-fired power plant to meet its demand for energy services. Indeed, the Sierra Club/INDEP Report concluded that the proposal to build a new 600 MW lignite fired power plant and rehabilitate Kosovo B would produce significant excess base load capacity that ratepayers would need to pay for, and therefore would likely necessitate a sharp rise in electricity tariffs.