Ambassador Delawie’s Remarks at the 2nd High-Level Energy Forum

Ambassador Delawie’s Remarks at Ministry of Economic Development’s 2nd High-Level Energy Forum, April 18, 2017

Good morning everyone, it’s a pleasure to be here today.  Thank you Prime Minister Mustafa and Minister Stavileci, and all of you for participating today.

I really can’t overstate the importance of today’s discussions on the Energy Strategy and on Market Liberalization.  We all know that 2017 is a pivotal year for Kosovo’s energy sector.  And that it’s critically important for Kosovo to keep working towards European Union standards, ultimately making Kosovo’s energy sector more modern, secure and competitive.

When we talk about the Kosovo energy sector, too often we focus on what has yet to be achieved.  But it’s important to recognize just how much time and effort have been invested in the energy sector and what incredible progress has taken place to keep the lights on.

I’m sure many of you can vividly remember that terrible winter just six years ago when the security of the energy supply was a much more precarious endeavor. Planned black-outs were a common occurrence, affecting many households and businesses in Kosovo.

The noise of generators and the smell of diesel were constant reminders of the serious predicament in which the Kosovo energy sector had found itself.

Today, though, life in the city center is dramatically different.  I really enjoyed seeing Mother Theresa Square lit up like Times Square during the holiday season, with people out enjoying the market under all the lights. This is notable progress from fifteen, ten, or even just six years ago.

Despite these achievements, the situation today remains fragile, especially with an energy grid powered by two aging power plants.  Should either of them fail, the situation for Kosovo could be dire.

So we commend the Kosovo Government for addressing the urgent need for new electricity generation, and for making real progress towards concluding an agreement for Kosovo C.  The government also recognizes that major investment is needed to rehabilitate Kosovo B in compliance with EU emission directives, and we encourage further action on this initiative.

There are three other critical issues I would like to highlight today.  First, we need to see greater government commitment to resettling the people residing near the KEK mining area.  Further delays place coal excavation, and therefore power generation, at risk.  There’s no magic wand on the resettlement issue, but it’s vital to resolve it – in accordance with international standards – before it becomes a crisis.

Second, true market liberalization will require a move towards cost-reflective tariffs for all customer tariff categories. I’m pleased that the ERO recently took the formal step of opening the electricity retail market, and we also recognize the desire to phase in fully cost-reflective tariffs, to avoid price shocks for customers.  The reality is that much-needed capital investments in the energy sector will not come for free – they will have to be covered either by government subsidies or by customer tariffs.  A thoughtful, long-term strategy to implement those measures will be essential.

And finally, we fully support KOSTT’s efforts to achieve a new connection agreement with the European Network of Transmission System Operators for Electricity (ENTSO-E), and we are sensitive to the implications that this process has for the political-dialogue.

None of these challenges I’ve touched on are easily addressed, and the U.S. will continue to be your partners as you make tough decisions on all of these issues.

Since 1999 we’ve been committed to providing technical assistance to the energy sector, including our current partnership with the Ministry of Economic Development and to the energy regulator to support clean energy project development and facilitate private sector investment. We’re also supporting KEK in the last stages of its unbundling, and KOSTT in its regional integration efforts through participation in the Albania Power Exchange.

I’m particularly proud that we support Kosovo in meeting its Renewable Energy targets, by updating the regulatory framework with the new energy laws adopted last summer, as well as by streamlining the permitting and licensing procedures for development of renewable energy projects.

All of this is about Kosovo’s economic development, but it’s also about basic quality of life for your citizens, and about helping Kosovo achieve its Euro-Atlantic goals.

That’s why the adoption of the new energy laws this past summer, and the recently revised Energy Strategy are such significant milestones in creating a foundation for all developments in the energy sector. This is no easy task, as Kosovo’s energy needs demand equal measures of pragmatism and idealism in order to stabilize, modernize and diversify all at once.

Again, this is all a deeply ambitious undertaking, and we are of course not alone in supporting Kosovo’s power sector.  And so I’m delighted to see so many participants here today, not only from across Kosovo’s power sector, but also from our international partners as well.

There’s a lot more to be done, but I commend you for the efforts you have taken to date and I thank you again for hosting this important event, and for your partnership.