Outdated energy infrastructure, increasing fossil-fuel capacity and massive electricity losses through distribution and transmission are some of the key challenges faced by Energy Community countries, according to a Change Partnership analysis released on Tuesday.

Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine have to revise their investment strategies to account for water stress, environmental and climate change impacts which will have a dramatic impact on their future development. A carbon price signal, introduced either through an emissions trading system, as is the case in the EU, regulation or taxation is vital first step to avoiding investments in what will soon become costly stranded assets and financing investments in energy savings and clean electricity production.

Main findings of the report:

  • Meeting requirements to manage local pollutants for the existing fossil-fuel capacity requires over €7.5 billion investment across the Energy Community in the following years.
  • In a carbon-price scenario (€5/tonne CO2), existing fossil-fuel capacity would cost these countries €575 million each year
  • The nearly 15 GW of planned coal power capacity would add-up between €270 million (€5/tonne CO2) and 1.6 billion (€30/tonne CO2) every year until 2030.
  • Electricity losses through distribution and transmission mount to approximately €1.7 billion annually.

The full report and countries’ profiles is available here.

The study was commissioned by the CEE Bankwatch Network.