SOLAR PV PARK IN KOSOVO KOSOVO ENERGY SECURITY OF SUPPLY JO 27: ASSESSMENT OF PV GENERATORS IN KOSOVO SUMMARY REPORT January 2021 This publication was produced for review by the United States Agency for International Development. It was prepared by DT Global. KOSOVO ENERGY SECURITY OF SUPPLY (KESS) JOB ORDER KESS – 027 ASSESSMENT OF PV GENERATORS IN KOSOVO SUMMARY REPORT Contract No: AID-167-C-17-00004 Submitted to: USAID Kosovo Prepared by: DT Global Photo Caption: Solar PV park in Kamenica Photo by KESS DISCLAIMER: The authors’ views expressed in this document do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Status of PV Deployment in Kosovo | Kosovo Energy Security of Supply (KESS) ii CONTENTS Executive Summary ................................................................................................................. 1 Introduction .............................................................................................................................. 2 Solar potential in Kosovo ........................................................................................................ 4 Policy, Legal and Regulatory Framework .............................................................................. 5 Types of PV generators ........................................................................................................... 6 Large solar PV generators ......................................................................................................................... 6 Prosumers (Self-consumption Generators)........................................................................................... 6 Behind-the-meter PV installations ........................................................................................................... 7 Off-grid solar PV .......................................................................................................................................... 8 Status of PV deployment in Kosovo ....................................................................................... 9 PV Sector perceptions and experiences .............................................................................. 11 Future projects pipeline......................................................................................................... 12 Grid Integration ..................................................................................................................... 14 Financing Solar PV in Kosovo ............................................................................................... 15 Present Status of Solar PV Projects ...................................................................................................... 15 Financial Analysis of Solar PV Projects ................................................................................................. 15 financing Solar PV Projects ...................................................................................................................... 17 Challenges to Financing Solar PV Projects ........................................................................................... 18 Suggestions for Improving Financing Options for Solar PV Projects ............................................. 19 Next Step..................................................................................................................................................... 20 Barriers and recommendations ........................................................................................... 21 Integration of renewable self-consumers ............................................................................................. 21 Large solar PV generators based on unsolicited procedures .......................................................... 23 Large solar PV generators based on solicited procedures (tender or auction) ......................... 24 Other barriers ............................................................................................................................................ 25 Gender inclusion, Education and Job opportunities in RES/ PV Solar sector in Kosovo . 27 Job opportunities ....................................................................................................................................... 27 Education ..................................................................................................................................................... 27 Gender Inclusion ........................................................................................................................................ 28 Status of PV Deployment in Kosovo | Kosovo Energy Security of Supply (KESS) iii FIGURES Figure 1 Long-term average photovoltaic power potential (PVOUT). .......................................................... 4 Figure 2 Large solar PV generator .......................................................................................................................... 6 Figure 3 Business with status of a Prosumer and solar PV installation .......................................................... 6 Figure 4 Household with a status of a Prosumer and solar PV installation .................................................. 7 Figure 5 Business customer with Behind-the-meter solar PV installation .................................................... 7 Figure 6 Behind-the-meter generator .................................................................................................................... 8 Figure 7 Off-grid solar PV generator in agriculture ............................................................................................ 8 Figure 8 Installed PV capacity in Kosovo during period 2013 – 2020 ............................................................ 9 Figure 9 Total installed solar PV capacity by end of 2020 .............................................................................. 10 Figure 10 Distribution of major solar PV installations in Kosovo ................................................................. 10 Figure 11 Possible pipeline of future solar PV projects in Kosovo ............................................................... 12 TABLES Table 1 Matrix of potential pipeline of future solar PV projects ................................................................... 13 Status of PV Deployment in Kosovo | Kosovo Energy Security of Supply (KESS) iv Abbreviations AI Administrative Instruction CEFTA Central European Free Trade Agreement CEP Clean Energy for all Europeans Package CP Contracting Party of the Energy Community Treaty DFC U.S. International Development Finance Corporation DFI Development Finance Institutions DSO Distribution System Operator EBRD European Bank for Reconstruction and Development EC European Council EnC Energy Community EnCT Energy Community Treaty EPC Engineering-Procurement-Construction ERO Energy Regulatory Office EU European Union FiT Feed-in Tariff GoK Government of Kosovo IFC International Finance Corporation IPA Instrument for Pre-Accession Assistance KEDS Kosovo Energy Distribution Services KESCO Kosovo Company for Supply of Energy KESS Kosovo Energy Security of Supply (A USAID project implemented by DT Global) KIESA Kosovo Investments and Enterprise Support Agency KOSTT Transmission, System and Market Operator of the Republic of Kosovo Ktoe Kiloton of oil equivalent kW Kilowatts (capacity) kWh Kilowatthours (energy) MAFRD Ministry of Agriculture, Forestry and Rural Development MED Ministry of Economic Development (now part of MEE) MEE Ministry of Economy and Environment MESP Ministry of Environment and Spatial Planning (now part of MEE) MF Ministry of Finance MO Market Operator, electricity MTI Ministry of Trade and Industry NECP National Energy and Climate Plan(s) NREAP National Renewable Energy Action Plan PPA Power Purchase Agreement PPP Public Private Partnership PV Photovoltaics RES Renewable Energy Source(s) TSO Transmission System Operator USAID United States Agency for International Development VAT Value Added Tax Status of PV Deployment in Kosovo | Kosovo Energy Security of Supply (KESS) v EXECUTIVE SUMMARY Kosovo is a Contracting Party (CP) to the Energy Community Treaty (EnCT), established between the European Union (EU) and countries of Southeast Europe to extend the EU internal energy market to Southeast Europe and beyond. As a CP, Kosovo has taken on a number of obligations deriving from the EnCT, including mandatory targets for renewable energy (RE) share in the final energy consumption. To achieve the 2020 mandatory RE targets set by the EnCT, Kosovo has introduced policies, legal and regulatory framework and determined installed capacity for different types of renewable energy sources (RES) to be supported by an incentive scheme known as Feed-in Tariff (FiT). The FiT incentive scheme, along with the Authorization Procedure based on first-come-first-served principle has proven to be successful, as it has attracted both local and foreign private investment for construction of new RES based generation capacities and has helped Kosovo fulfill the 2020 RES targets. Local investors and lenders have invested in solar photovoltaics (PV) and small hydropower, while foreign investors, supported by international financing institutions including the European Bank for Reconstruction and Development (EBRD), have successfully implemented large wind projects. In going forward, the European Commission (EC)