Price Panic Risks Derailing Western Balkans’ Energy Transition

While fossil-generated gas accounts for only 20 percent of Europe's electricity, gas-fired power plants are increasing the price of electricity, thanks to higher demand, low renewable energy supplies and the global increase in coal prices.

But, power generation from zero-carbon sources has cut the costs of this crisis and has limited the overall gas bill in the EU to 7 billion euros, instead of a potential 33 billion euros.

This should send a clear warning to countries considering relying on gas as the energy transition fuel, or prolonging their use of coal.

Electricity's true cost is hidden

A general view of the dust covered city of Zenica, some 75km from Sarajevo. Photo: EPA-EFE/FEHIM DEMIR

In the first half of 2021, household electricity prices in Western Balkans were relatively low, ranging from 0.0605 euros in Kosovo to 0.0980 per kWh in Serbia, well below the EU average of 0.2192 euro per kWh.

Electricity production in the Western Balkans relies mainly on coal-fired power plants. This outdated and inefficient fleet of plants is responsible for most greenhouse gas emissions in the energy sector, accounting for 75 per cent of the overall greenhouse gas emissions of the region.

Moreover, these power plants do not even comply with their own national pollution limits, emitting deadly amounts of poisonous pollutants, such as SO2, up to six times more than national limits,.

Policymakers in the region are using the soaring energy prices hitting the EU to justify their continued commitment to fossil fuel use in the region, claiming that domestically produced electricity from coal plants is the main reason why the energy crisis has not - yet - affected domestic prices.

While this may be true, to...