Balkan States Squandering Hydroelectric Energy Potential

Posted on 25. Mar, 2009 by Ross in Energy Shortages, Europe

At a time when renewable energy sources such as wind, wave and solar are making headlines around the world as nations rush to stabilise their economies, create jobs and meet carbon emission reduction targets, the most established form of renewable energy is remaining under the radar. Hydroelectric power already has a wide installation base in developed countries, but some regions are failing to capitalise on their hydroelectric resources effectively, leading to unnecessary energy shortages and higher energy prices.

The Balkan countries are the epitome of this scenario. The broad mountain ranges of south-east Europe see some of the continent’s highest annual rainfall, which has been harnessed for decades behind hydroelectric dams built during the Soviet era. Some countries such as Montenegro and Albania rely on hydroelectric plants for up to 75% of their energy needs, but others use it only to supply winter spikes in demand or to help cover energy production shortages due to failures with old, faulty reactors. As a result, dams habitually overflow in some areas, squandering the water as an energy resource.

What exacerbates the problem is the lack of a regional power market. Suppliers are restricted to national markets due to political attempts to maintain low domestic prices, but that prevents surplus energy from being exported to neighbouring countries such as Italy or Greece. This practice leads to a bizarre scenario where reservoirs in Bosnia can lie unused and overflowing whilst neighbouring hydroelectric stations in Croatia become over-exploited and dry. Such restrictions means that power generation in the Balkans is a largely unprofitable business, which in turn leads to under-investment in the energy infrastructure.

Much of that infrastructure is a legacy of the region’s Communist past, and the technologies involved are now outdated and inefficient. Simply replacing the hydroelectric turbines in many of the dams would lead to efficiency gains of around 15%, but the investment required cannot be raised whilst the energy companies remained locked into local markets. With most of the region’s coal-fire plants in a similar state, the Balkan countries face huge energy shortages unless the capital can be found for new plants: the World Bank estimate around £21 billion is required for the upgrades over the next 10 years.

New hydroelectric power stations are also unlikely. Due to the complex international disputes that have plagued the region since the end of the Cold War, not only is border politics a cause for tension but national land rights in a particular location do not necessarily coincide with national water rights. The convoluted situation this creates is another factor stifling further investments to stave off energy shortages.

With Russia recently turning off the gas taps to much of eastern Europe, few countries are unaware of the benefits of energy self-sufficiency. But with looming capacity shortfalls likely to result in energy shortages and price rises and with little international funds available during the global recession, the Balkans countries must soon learn to use their existing infrastructure more effectively.