Role of Hydropower

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Role of Hydropower Code: WBEC-REG-ENE-01 REGIONAL STRATEGY FOR SUSTAINABLE HYDROPOWER IN THE WESTERN BALKANS Background Report No. 1 Past, present and future role of hydropower Final Draft 3 November 2017 IPA 2011-WBIF-Infrastructure Project Facility- Technical Assistance 3 EuropeAid/131160/C/SER/MULTI/3C This project is funded by the European Union Information Class: EU Standard The contents of this document are the sole responsibility of the Mott MacDonald IPF Consortium and can in no way be taken to reflect the views of the European Union. This document is issued for the party which commissioned it and for specific purposes connected with the above-captioned project only. It should not be relied upon by any other party or used for any other purpose. We accept no responsibility for the consequences of this document being relied upon by any other party, or being used for any other purpose, or containing any error or omission which is due to an error or omission in data supplied to us by other parties. This document contains confidential information and proprietary intellectual property. It should not be shown to other parties without consent from us and from the party which commissioned it. d t o develop t he forecasts will not be realised and unanticipat ed events and circumstances may occur . Consequently Mott MacDonald does not guarantee or warrant the conclusions contained in t he report as there are likely t o be dif f erences between the forecasts and the actual re s u lt s and t hose dif ferences m ay be m aterial. While we consider t hat the inf ormation and opinions given in this r eport are sound all parties must rely on their own skill and judgement when making use of it . REGIONAL STRATEGY FOR SUSTAINABLE HYDROPOWER IN THE WESTERN BALKANS Background Report No 1: Past, present and future role of hydropower Final Draft 3 Page 2 Contents List of abbreviations and symbols ................................................................................................... 5 List of Tables.................................................................................................................................... 7 List of Figures .................................................................................................................................. 8 0 Preamble .................................................................................................................................. 10 1 Introduction .............................................................................................................................. 15 1.1 Background.................................................................................................................. 15 1.2 Objectives of this background report .............................................................................. 16 1.3 Activities undertaken and methodology adopted ............................................................. 16 1.4 Links with other tasks / background reports of the Study ................................................. 19 2 Classification of hydro power plants ........................................................................................ 20 3 Database of existing HPPs ....................................................................................................... 23 3.1 Structure of DB............................................................................................................. 23 3.1.1 Assessment of coverage / completeness of provided data ........................................... 27 3.2 Past and present status of HPPs in WB6........................................................................ 28 3.2.1 Number and structure of existing HPPs ...................................................................... 28 3.2.2 Installed capacities in existing HPPs .......................................................................... 29 3.2.3 Dynamics of construction / commissioning of HPPs .................................................... 30 3.2.4 Development of hydropower generation over time....................................................... 33 3.3 Summary of key observations........................................................................................ 40 4 Hydropower potential in Western Balkans ............................................................................... 41 4.1 Classification of hydropower potential ............................................................................ 41 4.2 Utilised, additional (remaining) and total technical hydropower potential in WB6...... 43 5 Prospects for hydropower development in WB6 in the context of regional electricity markets .......................................................................................................................................... 44 5.1 SWOT ......................................................................................................................... 44 5.2 General notes on electricity markets .............................................................................. 45 5.3 Hydropower on the regional market ............................................................................... 46 6 Energy / power sector development policies and strategies and action plans in the region .... 51 6.1.1 Energy Strategy ........................................................................................................ 51 6.1.2 Renewable Energy ................................................................................................... 52 6.2 National Renewable Energy Action Plans (2011-2020) – plans vs. expected achievements......................................................................................................................... 55 6.2.1 Albania .................................................................................................................... 55 6.2.2 Bosnia and Herzegovina ........................................................................................... 57 6.2.3 The former Yugoslav Republic of Macedonia .............................................................. 59 6.2.4 Kosovo .................................................................................................................... 62 6.2.5 Montenegro .............................................................................................................. 64 6.2.6 Serbia ...................................................................................................................... 65 6.2.7 WB6 region .............................................................................................................. 67 7 Hydropower in the context of future power sector development beyond 2020 with an outlook to 2050............................................................................................................................... 71 8 Proposals for follow-up actions ............................................................................................... 74 REGIONAL STRATEGY FOR SUSTAINABLE HYDROPOWER IN THE WESTERN BALKANS Background Report No 1: Past, present and future role of hydropower Final Draft 3 Page 3 8.1 Regional level .............................................................................................................. 74 8.2 WB6 country level......................................................................................................... 75 9 Summary of main findings, conclusions and final remarks...................................................... 76 Annex 1: Selected data for existing small HPPs in WB6 region ..................................................... 78 Annex 2: Financing options for large hydropower project implementation in the Western Balkans .......................................................................................................................................... 95 List of abbreviations and symbols ................................................................................................. 97 1. Introduction – Background and Objectives .............................................................................. 98 2. Financial mechanisms for financing HPP projects ................................................................... 98 2.1 Use of in-house (own) funds ............................................................................................ 98 2.2 Ordinary bank loans (on balance sheet financing) ........................................................... 98 2.3 Co-development with a financially strong partner............................................................ 99 2.4 Limited recourse project financing – Project Financing ................................................... 99 2.5 Build Own Operate (BOO) and Build Own Transfer (BOT) schemes .............................. 100 2.6 Suppliers’ credit ............................................................................................................. 100 2.7 Factors which affect the financing strategy ................................................................... 100 3. Current situation with financing of HPP projects in Western Balkans.....................................101 3.1 Multilateral Development Banks..................................................................................... 101 3.2 Commercial Banks ......................................................................................................... 103 3.3 Private and institutional investors.................................................................................
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