Energy Crisis in the Western Balkans: Measures undertaken amid energy price shocks

30 September 2022

Balkan Green Foundation (BGF) with the support of Heinrich Böll Stiftung (HBS), today published the research "Energy crisis in the Western Balkans: Measures undertaken amid energy price shocks”. This research analyses the factors that influenced the creation of the energy crisis, the impact on the countries of the Western Balkans, the measures taken by the BP governments against the crisis, and the main recommendations for overcoming the crisis.

An interweaving of interrelated factors has created an unprecedented and multifaceted global energy crisis. The post-pandemic recovery led to a sharp increase in energy demand and slowed progress in renewable energy. The decline in fossil fuel production capacity in Europe and the delay in the energy transition added further to this equation. In addition, extreme weather conditions, characterized by a hot summer and a cold winter, further increased energy consumption, and finally, the Russian occupation of Ukraine led to shortages of energy commodities, further exacerbating further the crisis.

The research finds that: The Western Balkan region is one of the most affected when it comes to sensitivity to the energy crisis. This sensitivity results from the lack of diversification of energy sources, heavy dependence on polluting and outdated coal-fired power plants and as a result of high energy imports which, due to the energy crisis, have reached record levels. The "Day Ahead" energy price on the Hungarian Stock Exchange - HUPX reached over 1047.1 EUR/MWh in August. Taking into account these trends, prices may increase even more this winter, making the economic and social situation of the citizens of the Western Balkans even more difficult and raising inflation further.

Based on the research, Kosovo and North Macedonia, have turned out to be among the countries most affected by the energy crisis. Besfort Kosova, Researcher from the Balkan Green Foundation emphasized that: "The number of measures reflects the depth of the energy crisis affecting a country, and not necessarily how proactive a country is in adopting new measures to improve the situation. There is a clear correlation between the measures taken by the countries of the Western Balkans and the import".

Some of the recommendations that emerge from this publication include: the advancement of schemes of a social nature to support poor energy consumers and prevent further economic damage to certain businesses and industries; strengthening regional cooperation between the six countries of the Western Balkans regarding the energy crisis and creating a better interconnectivity system; increasing the transparency and quality of information related to the energy crisis; as well as the institutional commitment to the Green Agenda and the just energy transition and the removal of bureaucracy for investments in renewable energy sources, as the most sustainable form of decarbonization.

Click here to read the full publication of "Energy Crisis in the Western Balkans".