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Think Tank Report Warns of Impending Energy Crisis in Western Balkans


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The power sector in the Western Balkans is facing a critical juncture, characterized by outdated infrastructure, environmental non-compliance, and geopolitical tensions. This research, conducted in collaboration with the Centre for European Policy Studies (CEPS), examines the multifaceted challenges confronting the region’s energy landscape and proposes strategic solutions to mitigate the looming crisis. Through a comprehensive analysis of policy briefs, expert insights, and empirical data, this study sheds light on the urgent need for intervention to prevent a catastrophic meltdown of the power sector. Key findings underscore the pressing issues of environmental degradation, energy security risks, and geopolitical rivalries, while offering actionable recommendations to pave the way for sustainable development and regional stability.


The Western Balkans region is confronting a series of interconnected challenges in its power sector, ranging from technical deficiencies to geopolitical struggles for influence. As the demand for electricity continues to rise and infrastructure ages, the region is on the brink of a crisis that threatens to undermine energy security, environmental sustainability, and economic stability. Against this backdrop, this research aims to provide a comprehensive analysis of the factors contributing to the crisis and explore potential pathways for resolution.


Challenges Facing the Power Sector:

Outdated Infrastructure: The power infrastructure in the Western Balkans, particularly in relation to lignite power plants, is antiquated and in dire need of modernization. Many plants are non-compliant with EU environmental regulations, posing significant risks to both the environment and public health.

Environmental Non-Compliance: Depletion and flooding of lignite mines have led to a decline in fuel quality, exacerbating environmental concerns. Non-compliance with EU emissions standards further compounds the problem, resulting in elevated levels of pollution and carbon intensity.

Energy Security Risks: Technical malfunctions, blackouts, and political tensions over energy transit pose risks to energy security and economic stability in the region. Reliance on lignite for electricity generation leaves the region vulnerable to supply disruptions and price fluctuations.

Geopolitical Rivalries: The Western Balkans has become a battleground for geopolitical influence, with powers such as China, Russia, Turkey, and the UAE vying for control through investments in energy infrastructure. Corrosive capital investments from non-EU nations threaten to undermine the rule of law and democratic development in the region.

Proposed Solutions:

Integration into EU Emissions Trading System (ETS): Full integration into the EU ETS, with temporary free allocation, could facilitate the phase-out of coal and incentivize investment in low-carbon technologies. This would align with efforts to modernize the power sector and transition towards renewable energy sources.

Regional Cooperation and Investment: Enhanced regional cooperation and investment in sustainable energy projects can help diversify energy sources and reduce dependency on lignite. Collaboration with EU and Western partners can provide access to technology, expertise, and funding necessary for modernization efforts.

Strengthening Regulatory Frameworks: Strengthening regulatory frameworks and enforcement mechanisms is essential to ensure compliance with environmental standards and promote responsible energy governance. Transparent and accountable decision-making processes can foster investor confidence and support sustainable development goals.


The power sector in the Western Balkans is at a crossroads, with significant challenges threatening to undermine progress and stability in the region. By addressing the root causes of the crisis and implementing strategic solutions, stakeholders can chart a path towards a more sustainable, resilient, and prosperous energy future. Collaboration between governments, international organizations, and civil society is essential to overcome the challenges ahead and build a brighter tomorrow for the Western Balkans.

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