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Obama admin doubles down on lignite coal plant in Kosovo (Monday, October 21, 2013)
Lisa Friedman, E&E reporter
The United States will continue to support $58 million in World Bank financing for a lignite coal plant in Kosovo despite President Obama’s pledge to stop funding for overseas coal, according to a report obtained by ClimateWire.
The 40-page U.S. Agency for International Development report, finalized late last month, argues that coal is the only short-term option for Europe’s poorest, energy-starved country. That, it notes, makes the 600-megawatt plant still eligible for U.S. backing under Obama’s Climate Action Plan.
“Kosovo has limited potential for economically-sound, near-term electric generation investments that would significantly deal with the energy shortfall,” USAID Assistant Administrators Paige Alexander and Eric Postel wrote. “We believe that the project has strong merit and that the World Bank’s engagement in Kosovo’s energy sector would be beneficial.”
Environmental groups, which have submitted reams of independent analyses highlighting the capacity for energy efficiency as well as wind power development in Kosovo, lashed out against the findings. One activist called Obama’s climate plan “a joke.”
“The Kosovo coal project should not go ahead. If it does, it just goes to show they [the Obama administration] are not even taking seriously the strategies and the action plan they’ve put in place,” said Nezir Sinani, a Kosovarian critic of the coal plant and now the climate change coordinator for the nonprofit Bank Information Center.
“It’s completely wrong, and it shows that whatever policies that have been put in place on the coal front are just a joke,” he said.
The Kosovo coal plant has been at the heart of a long-standing battle between climate change activists and development agencies. Groups fought for years to convince the World Bank — the world’s largest and most powerful development institution — to stop financing fossil fuel projects, and claimed a partial victory when the institution this year issued a new policy ending support for most coal lending. That decision came on the heels of and hewed closely to President Obama’s Climate Action Plan, which surprised many by calling to cease U.S. support for most new coal plants overseas.
A notable exception: The administration said it could continue to back plants that use carbon-capture technologies or “the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists.”
Battle not lost, but uphill
Sometimes called “brown coal,” lignite is the dirtiest of all fossil fuels. And the proposed plant does not use supercritical or ultra-supercritical efficiency technologies. It will, however, replace two outdated and even dirtier plants that are currently Europe’s largest point source of air pollution.
That in part is why, USAID argues, the project is not inconsistent with Obama’s climate plan. The report, developed in response to a query earlier this year from Sen. Patrick Leahy (D-Vt.), largely dismisses other options for the country. Both natural gas and hydropower, they write, are longer-term options — requiring dealing with “transboundary and environmental flow issues” that will take time to resolve in the case of hydro.
While efficiency measures and other renewable energy, meanwhile, “will help bring electricity supply and demand into equilibrium, these options will not be sufficient for Kosovo in the immediate future, and neither large-scale hydropower nor natural gas-fired plants are expected to be feasible in the near term. The existing 49 percent unemployment rate in Kosovo and lack of evidence that lack of energy is holding back economic growth makes it quite clear that significant energy supply needs to be economically developed now,” the report says.
An independent analysis by former World Bank clean energy specialist Dan Kammen found that not only is coal no longer the cheapest option for Kosovo, but also 40 percent of the country’s generated electricity is lost in the grid. Kammen and others argue that energy efficiency projects combined with modest amounts of renewable energy would eliminate the need for the new coal plant.
The U.S. Treasury Department, which has taken the lead in promoting the Kosovo plant, declined in the days after Obama’s call to end coal financing to discuss what direction the agency might take on the project. Officials also did not respond to a Friday request to expand on the new report. Meanwhile, the World Bank, which is preparing to conduct an environmental impact assessment before it brings the “partial risk guarantee” before its board, also did not respond.
Sinani said he believes the coal project is feeding off its own bureaucracy. Developed more than 10 years ago, a number of agencies in the United States and abroad are already invested in its creation and, he argued, many are uninterested in seriously exploring new energy options. He said activists will continue to fight the plant, though he acknowledged that options are running out.
“It’s not a lost battle,” he said.