Power supply gap in Kosovo: implications and solutions

Electricity’s role in sectoral energy consumption

Electricity is essential for households and economic activity in Kosovo. In 2023, it accounted for 31% of final energy consumption, with an even higher share in households. As the largest consumers, households rely primarily on electricity (51%) and renewables (43%). The high share of renewables reflects the widespread use of firewood for heating. All other household energy needs, such as cooling, water heating, cooking, lighting, and appliances, depend entirely on electricity. Electricity also represents more than a quarter of total industrial energy use.

Electricity demand

Electricity consumption has continued to rise. Over the past decade, peak demand has risen by 34%, reaching 1472 MW in 2024. Peak demand is defined as the highest simultaneous demand within a given year and indicates the generation or import capacity that is needed to ensure system stability. The most recent Transmission Development Plan projects peak demand through to 2032, with forecasts ranging from 1453 MW to 1597 MW, depending on the scenario. Alongside peak demand, overall annual consumption has risen by 22% since 2014, reaching 6.6 TWh in 2024.

Electricity generation capacities

With an operational capacity of 1243 MW, Kosovo faces a persistent shortfall in meeting peak demand, relying on imports to cover demand during peak hours. Additionally, in recent years, the country’s annual power generation has consistently fallen short of meeting overall demand. This is reflected in the gap between the 6.1 TWh generated and the 6.6 TWh consumed in 2024. As demand continues to rise, this gap is expected to widen further.

Implications of the supply-demand gap

This structural gap between domestic demand and supply has several important consequences. Firstly, covering peak hours with imports is typically more expensive than relying on domestic generation. As imports make up a larger share of supply, overall procurement costs increase and are likely to put upward pressure on endconsumer electricity prices, including regulated tariffs.

Secondly, during periods of particularly high demand, additional measures are often required to maintain stability. For example, in December 2025 and January 2026, elevated heating demand combined with a higher number of consumers – linked to the seasonal return of the diaspora – contributed to peak pressures on the grid. In response, all available power plants were operated at full capacity, including units that would typically be held in reserve. However, unplanned outages reduced the available generation capacity again soon after. To manage the imbalance, the transmission system operator, KOSTT, took actions that are generally reserved for emergency conditions in interconnected grids. These included drawing power from neighbouring systems, which carries a risk for regional grid stability and is therefore penalised under Kosovo’s Connection Agreement with the European Network of Transmission System Operators for Electricity (ENTSO-E). Finally, scheduled reductions in consumption needed to be implemented at certain times to bring overall demand in line with available supply, i.e., leaving some consumers temporarily without electricity.

Measures to close the gap

To address the growing supply-demand gap, both demand-side and supply-side measures can be implemented. On the demand side, energy efficiency improvements in both residential and industrial energy use are crucial for reducing unnecessarily high consumption. Additionally, reducing grid losses plays a significant role in reducing overall demand, helping to ease the strain on the energy system. On the supply side, expanding generation capacity is essential. Kosovo remains heavily reliant on lignite, which accounted for 90% of generation and 76% of operational capacity in 2024. Due to their age, the Kosovo A and Kosovo B plants operate below installed capacity. While rehabilitation is underway, these measures alone will not meet rising demand. Further, given the environmental, health and climate impacts of lignite, future capacity expansion should prioritise renewable generation.

Planned expansion of renewable power generation

In this context, expanding the currently low generation capacity from renewable sources is crucial for strengthening long-term supply security. Kosovo has set ambitious targets, aiming for 1600 MW of renewable capacity and at least 35% of total generation from sustainable sources by 2031. Planned measures include public investments, such as the 100 MW flagship solar PV project, and policies designed to incentivise private investments, such as the solar PV and wind capacity auctions.

Outlook

Without decisive action, Kosovo’s structural supply-demand power gap is likely to widen, increasing import dependence. Difficulty in maintaining real-time system balance poses risks to supply reliability, as well as to Kosovo’s compliance with its ENTSO-E Connection Agreement. Addressing this challenge requires simultaneous progress on demand-side efficiency and supply-side expansion of renewable generation. Important steps are being taken, particularly through investments into the energy efficiency of buildings, supported by the Kosovo Energy Efficiency Fund. However, progress in renewable deployment – both flagship public projects and competitive solar and wind auctions – has been slower than planned, making the achievement of renewable targets within the next five years uncertain. Maintaining clear strategic direction, credible implementation pathways, and stable policy signals will therefore be critical to strengthening Kosovo’s long-term energy security.

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Sources

• KOSTT (2022). Transmission Development Plan 2022-2032. https://www.ero-ks.org/zrre/sites/default/files/Lajmet/njoftimet/221118_KOSTT_Transmission Development Plan 2023-2032_ver.0.1.pdf
• Energy Regulatory Office (ERO) (2024). Annual Report 2024. https://www.ero-ks.org/zrre/en/publikimet/raportet-vjetore