ERO - Annual Report For 2017

ANNUAL REPORT 2017
Prishtina, March 2018
Address: St. Dervish Rozhaja no. 12, 10000 Prishtina, Kosovo

Tel: 038 247 615 lok. 101, Fax: 038 247 620, E-mail: info@ero-ks.org, web: www.ero-ks.org
ANNUAL REPORT 2017
TABLE OF CONTENT
1 ENERGY REGULATORY OFFICE .................................................................................. 9

1.1 Description of the Energy Regulatory Office .............. Error! Bookmark not defined.
1.2 Organizational Structure and Human Resources ....... Error! Bookmark not defined.
1.3 ERO’s Board.............................................................................................................. 12
1.4 ERO’s Departments ..................................................... Error! Bookmark not defined.
1.5 Training of ERO’s staff ................................................. Error! Bookmark not defined.
1.6 Technical Assistance Projects ..................................... Error! Bookmark not defined.
1.7 Procurement Activities ............................................... Error! Bookmark not defined.
1.8 ERO funding ................................................................ Error! Bookmark not defined.
2 ACTIVITIES OF THE ENERGY REGULATORY OFFICE ........... Error! Bookmark not defined.
2.1 Completion of legal and regulatory framework ......... Error! Bookmark not defined.
2.2 Licensing of energy activities ...................................... Error! Bookmark not defined.
2.3 Renewable Energy Sources (RES)............................................................................. 19
2.4 Authorization - construction of new capacities ....................................................... 20
2.5 Monitoring the construction of new generating capacities ...... Error! Bookmark not
defined.
2.6 Court cases ............................................................................................................... 29
2.7 Annual balance of electricity and thermal energy .................................................. 30
2.8 ERO's activities in the field of pricing regulation ........ Error! Bookmark not defined.
2.9 Promoting electricity generation from RES ................ Error! Bookmark not defined.
2.10 TSO certification process ............................................ Error! Bookmark not defined.
2.11 Market monitoring...................................................... Error! Bookmark not defined.
2.12 Monitoring the electricity outages ............................. Error! Bookmark not defined.
2.13 ERO activities in the area of customer protection ..... Error! Bookmark not defined.
3 COOPERATION WITH OTHER PARTIES AND TRANSPARENCY ........ Error! Bookmark not
defined.
3.1 Reporting and cooperation with the Assembly of Kosovo ........ Error! Bookmark not
defined.
3.2 Cooperation with other stakeholders and partnership activities ... Error! Bookmark
not defined.
3.3 ERO's participation in international activities ............ Error! Bookmark not defined.
3.4 Transparency and public involvement in regulatory processes Error! Bookmark not
defined.
4 FINANCIAL REPORTING FOR ERO .................................... Error! Bookmark not defined.
2
ANNUAL REPORT 2017
4.1 ERO budget ................................................................. Error! Bookmark not defined.
5 ELECTRICITY SECTOR ...................................................... Error! Bookmark not defined.

5.1 Characteristics of the electricity sector ...................... Error! Bookmark not defined.
5.2 Lignite production and consumption.......................... Error! Bookmark not defined.
5.3 Electricity generation ............................................................................................... 65
5.4 Transmission system ................................................... Error! Bookmark not defined.
5.5 Electricity distribution system ................................................................................. 81
5.6 Electricity Supply ......................................................... Error! Bookmark not defined.
5.7 Import and export of electricity.................................. Error! Bookmark not defined.
5.8 Quality Standards of electricity supply and services .. Error! Bookmark not defined.
6 THERMAL ENERGY SECTOR ............................................. Error! Bookmark not defined.

6.1 Main developments in the thermal energy sector ................................................ 112
6.2 Technical characteristics of thermal energy systems ............................................ 113
6.3 Performance of district heating companies .......................................................... 114
6.4 Overall production, supply and losses of thermal energy ..................................... 118
6.5 Billing, collection and heating surface ........................ Error! Bookmark not defined.
7 NATURAL GAS SECTOR ................................................... Error! Bookmark not defined.

7.1 Development perspective of natural gas sector in Kosovo ................................... 121
3
ANNUAL REPORT 2017
List of abbreviations
CAA Civil Aviation Authority
AERS Serbia Regulator
RES Renewable Energy Sources
CCP Customer Care Programme
CEER Council of European Energy Regulators
TENGD Thermal Energy and Natural Gas Department
LLD Legal and Licensing Department
CPD Consumer Protection Department
TPD Tariffs and Pricing Department
EMD Energy Market Department
EBRD European Bank for Reconstruction and Development
EC European Commission
EMS Serbia Transmission System Operation
ECS Energy Community Secretariat
ECRB Energy Community Regulatory Board
SEE South East Europe
ENS Energy Not Supplied
ENTSO-E European Network of Transmission System Operators for Electricity
GWG Gas Working Group
PHLG Permanent High Level Group
GWh Gig watt hour
HC Hydropower Plant
IAP Ion-Adriatic-Pipeline
ITC Inter TSO Compensation
EC Energy Community
SEEEC South East Europe Energy Community
KEK Kosovo Electricity Corporation
KESH Albanian Energy Corporation
KEDS Kosovo Electricity Distribution and Services
KESCO Kosovo Electricity Supply Company
KfW German Development Bank
CM Council of Ministers
km Kilometre
KOSTT Transmission, System and Market Operators
PSRC Public Services Regulatory Commission
kV Kilovolt
kW Kilowatt
OL Overhead line
MAR Maximum Allowed Revenues
MPA Ministry of Public Administration
EPA Energy Purchase Agreement
MESP Ministry of Environment and Spatial Planning
4
ANNUAL REPORT 2017
MVA Megavoltamper
MW Megawatt
MWTH Thermal Megawatt
MWh Megawatt hour
MED Ministry of Economic Development
NARUC National Association of Regulatory Utility Commissioners
DH District Heating
SS Substation
DSO Distribution System Operator
TSO Transmission System Operator
MO Market Operator
PECI Projects of Energy Community Interest
PG TSO KOSTT Working Group for inclusion of KOSTT in ENTSO-E
RG CE Regional Group of Continental Europe
RoR Rate of Return
RAB Regulated Asset Base
SCADA Supervisory Control and Data Acquisition
SAIDI System Average Interruption Duration Index
SAIFI System Average Interruption Frequency Index
TAP Trans-Adriatic-Pipeline
TPP Thermal Power Plan
TF Taskforce
TKE Energy Community Treaty
TR Transformer
MV Medium Voltage
LV Low Voltage
VAT Value Added Tax
AI Administrative Instruction
USAID United States Agency for International Development
WACC Weighted Average Cost of Capital)
WBIF Western Balkans Investment Framework
ERO Energy Regulatory Office
5
ANNUAL REPORT 2017
EXECUTIVE SUMMARY
Pursuant to the obligations contained in the Law No. 05/L-084 on the Energy Regulator, the Energy
Regulatory Office (hereinafter ERO) presents the Annual Report 2017 for review by the Assembly of
the Republic of Kosovo.
The Annual Report contains information on activities undertaken and results achieved in relation to
the scope of ERO, as well as analysis regarding the energy enterprise activities, according to licensee
data, and present an overview of the energy market development in Kosovo. An integral part of this
report is also ERO's budget financial report for 2017.
During 2017 (in the first five months while the board was operational), ERO has taken numerous
decisions, has adopted rules, methodologies and procedures concerning the energy sector.
Amongst the important issues are: The rule for establishment of the Universal Service Supply
income; the rule on prices, on the basis of which energy prices have been set for 2017; as well as
the harmonization of a part of the secondary legislation in accordance with the new laws on energy
and EU's Third Energy Package.
Three suppliers are equipped with licenses for retail supply of electricity, whereas, on the other
hand, a significant number of enterprises are equipped with licenses for electricity trading and
licenses for generation, transmission and distribution of electricity and thermal heat. In 2017, ERO
reviewed licensing applications submitted by various legal entities.
ERO has received and reviewed a significant number of applications for generation of electricity
from Renewable Energy Sources (RES) of various technologies and in 2017, in addition to the
preliminary authorizations, has issued eight (8) final authorizations. ERO has also monitored the
processes of developing new generating capacities from RESs, whereas one was completed in the
respective year and entered into operation.
ERO has faced several judicial disputes with respect to its activity, whereby the dispute and decision
on the interim measure of the Court of Appeals concerning the treatment of unbilled energy (loss)
in the four northern municipalities of the country had the greatest influence.
During 2017, ERO has carried out the annual adjustments process to Maximum Allowed Revenues
(MAR) and reviewed the applications of new tariffs by the licensees in the energy sector, including
transmission, distribution and supply of electricity for consumers with the right to universal service
and licensees in the thermal energy sector. ERO has changed the retail tariff structure in the
electricity sector since 1st of April 2017. The essential change is the removal of seasonal tariffs
(summer/winter) for all final consumers, as well as the removal of block tariffs for household
customers.
In terms of consumer protection, ERO has received and reviewed consumers’ complaints
throughout the year, and has provided consultations, clarifications and guidance on the actions
necessary to resolve their complaints.
In the course of exercising its activities, ERO has cooperated with local and international institutions
and has reported to the Assembly of Kosovo, and has informed the media about developments in
the energy sector.
6
ANNUAL REPORT 2017
During 2017, preparatory actions were undertaken for certification of the transmission system
operator, selection of the last resort supplier as well as preparation of rules and other procedures
for the functioning of the energy system in harmony with the requirements of the Third Energy
Package.
In carrying out and performing the duties and responsibilities established by law, ERO has been
assisted by USAID – “Repower Kosova” and the Energy Community Secretariat on a continuous
basis.
In addition to the part of the report describing the activities of ERO, the report also contains
activities of licensees in the energy sector, where electricity, thermal energy and natural gas are
separately analysed.
Through the guidelines for liberalization of the electricity market, ERO has decided to open the
wholesale market, starting with the generation and then gradually liberalizing the retail market by
adapting it to the circumstances of the energy sector in Kosovo.
The market has marked its opening with the placing in the market of the 220kV and 110kV voltage
level consumers at unregulated prices of electricity supply, who constitute about 8% of the demand
for energy. The free market also includes the coverage of losses in the transmission and distribution
network (including the energy for four northern municipalities), which accounts for about 28% of
the energy demand.
Customers with the right to universal service are supplied at regular prices set by ERO through cost-
reflective, reasonable, non-discriminatory tariff reviews, taking into account consumer protection,
based on objective criteria, and transparently established.
Electricity production in 2017 was characterized by a decline compared to production in 2016. This
decline in production was due to expropriation problems in the villages of Hade and Shipitulla and
consequently, there was an increase in the import of electricity to cover the consumption.
The overall demand for electricity in the system and the consumption in distribution is increasing
steadily over the years, however, the supply quality is concerning since in some cases it is below the
required standards, which is observed by measuring indexes (SAIDI, SAIFI, ENS, etc.), as well as the
quality of services.
Losses in the transmission network are at an acceptable level, while losses in the distribution
network are quite high. Technical losses amount to 12.28%, while unauthorized consumption of
energy (hereinafter referred to as commercial losses) constitutes 17.03% of the demand for
distribution, out of which unbilled energy in the northern part of Kosovo constitutes 5.31% (265
GWh).
The table below reflects the main data realized during 2017 compared to the balance of 2017 and
realization in 2016.
7
ANNUAL REPORT 2017
Tab. I. Comparison of 2017 data and balances to 2016

Losses
Unit Production Demand Import Eksport
Transmission Distribution
Realization 2017 GWh 5,300 5,686 1,242 880 118 1,464
Balance 2017 GWh 5,827 5,464 724 1,088 113 1,321
Realization 2016 GWh 5,835 5,342 534 1,121 120 1,427
The billed energy has had a steadily increase over the years, particularly collection had a more
prominent increase, thus amounting to 99.09% for customers connected to the transmission and
distribution network.
The situation of thermal energy sector has remained largely unchanged. The cogeneration project in
DH Termokos has provided positive outcomes by increasing the heating quality for customers
connected to the network, while the cogeneration project in DH Gjakova is under implementation.
8
ANNUAL REPORT 2017
1 ENERGY REGULATORY OFFICE
1.1 Description of the Energy Regulatory Office
Energy Regulatory Office (ERO) is an independent agency and separated in legal and functional
terms from any other natural or legal person. ERO duties and functions are defined in the Law 05/L-
084 on Energy Regulator, which includes: the efficient, transparent and non-discriminatory creation
and functioning of the energy market; determining the terms and conditions as well as granting of
licenses for carrying out activities in the field of energy; determining the terms and conditions and
the granting of authorizations for the construction of new capacities; market monitoring and the
care to improve energy supply security; setting tariffs for energy activities in a reasonable manner
and based on tariff methodology; monitoring and preventing the creation of dominant position and
uncompetitive practices by energy enterprises, as well as resolving complaints and disputes in the
energy sector.
ERO is responsible for designing and implementing the regulatory framework for the energy sector
in Kosovo, in order to achieve compliance with the obligations of SEEEC Treaty and alignment with
the “acquis communautaire” on energy, ensure non-discriminatory access to all energy network
users at prices reflecting true economic costs.
1.2 Organizational Structure and Human Resources
ERO’s organizational structure is defined by the Board of the Energy Regulatory Office based on
responsibilities and duties provided for in the Law No. 05/L-084 on Energy Regulator and the Rule
on the Organization and Functioning of the Energy Regulatory Office.
Board of Eneergy
Regulatory Office
Board Assistance
Officer
Public Relation
Managing Director Officer
Energy Market Prices and Tariffs Legal and Customer Thermal Energy General
Department Department Licensing Protection and Natural Gas Administration
Department Department Department Unit
9
ANNUAL REPORT 2017
Fig. 1.1 Organizational Scheme of ERO
ERO’s Board consists of the Chairman and four other members and is in charge of all matters under
the jurisdiction and competence of ERO. The Board takes decisions by majority votes and has the
quorum needed to take a decision if at least three Board members are present.
ERO staff is structured in organizational departments on the basis of specific operational and
administrative activities.
Brief description of organizational structure with job positions in 2017 is shown in the table below.
10
ANNUAL REPORT 2017
Tab. 1.1 Organizational structure with the job positions

Planned
Job positions Employees Vacancies
positions
Chairman and two
ERO Board 5 2 Board members
Managing Director 1 1 0
Public Relations Officer 1 1 0
Board Assistance Officer 1 1 0
Administration Unit
Head of Administration Unit
Chief Financial Officer
Procurement Manager
Administration Officer
Data Manager Officer 9 9 0
Database Development Expert
English Language Translator
Receptionist
Driver/Maintenance
Legal and Licensing Department (LLD)

Head of Legal and Licensing Department
Legal Affairs and Monitoring Expert 3 3 0
License Monitoring Analyst
Pricing and Tariffs Department (PTD)
Head of the Pricing and Tariffs Department
Expert for Regulatory Affairs and Tariffs
4 4 0
Tariffs and Prices Analyst
Tariffs Structure Analyst
Energy Market Department (EMD)
Head of the Energy Market Department
Power Supply and Market Structure Analyst
4 4 0
Power Systems Analyst
Market Monitoring Analyst
Thermal Energy and Natural Gas Department (TENGD)
Head of the Thermal Energy and Natural Gas Department
2 2 0
Thermal Energy Analyst
Costumer Protection Department (CPD)
Head of the Costumer Protection Department
0
Costumer Protection Analyst 3 2
Standards Performance Analyst 1
Total 33 29 4
ERO staff is a team of experts with proven performance in the areas of responsibilities they
cover.
This composition of engineering, economics, law and other experiences strengthens the
confidence of an institution having clear strategies towards success in developing the energy
sector in Kosovo.
11
ANNUAL REPORT 2017
1.3 ERO’s Board
ERO Board consists of 5 members including the chairman, who are appointed as full-time
employees by the Assembly of Kosovo with a term of 5 years. ERO Board is a decision-making body
for all matters under the ERO’s jurisdiction and competence. The Board takes decisions by majority
vote and has the quorum needed to take a decision if at least three Board members are present,
but there should be three (3) votes in favour in order to become a final decision. The Board states
its stances regarding the issues it handles through decisions that are taken at open meetings
announced in advance on ERO’s official website. ERO has been operating with three board
members since September 2016, whereas upon the expiration of another member's term in May
2017, the ERO Board does not have the quorum needed for decision-making. On 31 December
2017, the Energy Regulatory Office Board consisted of the following members:
Arsim Janova, Acting Chairman of Board, and
Besim Sejfijaj, Member of the Board
For decision-making purposes, in accordance with the authority granted under the legislation in
force, the ERO Board has held regular meetings until 15 May 2017, where it discussed about the
functioning of the energy system in Kosovo, and adequate decisions were taken and documents
needed for the sector were approved.
The ERO’s Board has held a total of seven (7) public meetings until May 2017, in which were taken
43 decisions related to:
 Market monitoring and energy sector activities;
 Liberalization of the energy market;
 Price adjustment;
 Licensing of energy activities in Kosovo;
 Authorization of construction of new power generation capacities from renewable
sources;
 Consumer protection;
 Approval of rules, methodologies and other energy sector documents, and
 Other issues within its responsibilities.
Most of the approved and reviewed documents were initially subject to public discussion, as
foreseen by law, to include all parties involved in the decision-making processes and are published
in ERO’s official website.
The Board, for all activities, was supported by: Managing Director, Administration Unit and 5
departments as follows:
 Legal and Licensing Department (LLD)
 Energy Market Department (EMD)
 Tariffs and Pricing Department (TPD)
 Consumer Protection Department (CPD)
 Thermal Energy and Natural Gas Department (TENGS)
12
ANNUAL REPORT 2017
In terms of professional qualifications, the Board has targeted the employees' specialization in the
relevant profiles within their responsibilities, through various training courses organized inside and
outside the country.
1.4 ERO’s Departments
Legal and Licensing Department (LLD)

Legal and Licensing Department is responsible for drafting secondary legislation, reviewing licensing
applications by energy enterprises, reviewing applications on granting authorizations for
construction of new capacities. This department also supervises and monitors licensees’ activities.
Energy Market Department (EMD)

Energy Market Department is responsible for market structure, monitoring the performance of
market participants, evaluation and analysis of data in the energy sector. The Department also
monitors competition and behaviour of market participants in an objective, transparent and non-
discriminatory manner.
Tariffs and Pricing Department (TPD)

Tariffs and Pricing Department is responsible for evaluation of tariff applications of licensed
enterprises and presents them to the Board for approval; monitors the execution of operational and
capital expenses through Tariff Reviews; undertakes all the measures to ensure that the tariffs are
cost-reflective, reasonable, non-discriminatory, based on objective criteria and established in a
transparent manner, taking into consideration customer protection.
Customer Protection Department (CPD)

Customer Protection Department is responsible for reviewing and resolving complaints and
disputes between customers and energy enterprises, system operators and energy enterprises as
well as between two energy enterprises. In the course of exercising its duties and responsibilities,
this Department cooperates with all institutions and organizations which legitimately represent
customers.
Thermal Energy and Natural Gas Department (TENGD)

Thermal Energy and Natural Gas Department is responsible for reviewing and implementing
strategies, performance standards and other operational practices that are related to these sectors.
This Department carries out the monitoring of licensed enterprises through collection, analysis and
evaluation of relevant data and information and also contributes to the development of reporting
systems of district heating enterprises, focusing in technical-technological elements and integration
of incentives and targets for efficiency. It also cooperates with other departments of ERO by
providing support and technical expertise on issues related to thermal energy and natural gas.
Administration Unit (AU)

Administration Unit supports the functioning of ERO, administration of finances, organizes the
efficient recruitment of ERO staff, coordinates trainings of the ERO staff, supply and maintenance of
13
ANNUAL REPORT 2017
office equipment and assists in arranging the office by making it comfortable for work for all the
ERO staff.
1.5 Training of ERO’s staff
ERO considers its staff as one of the resource with significant importance and is constantly
committed to supporting them by providing adequate knowledge, skills and expertise to carry out
duties and responsibilities according to highest standards, with the aim of achieving their full
potential, through:
 on-the-job trainings;
 short-term seminars inside and outside the country;
 long-term trainings and courses inside the country and abroad;

During 2017 were held a series of regional meetings, workshops and trainings, which contributed to
the further improvement of ERO employees' knowledge on regulating the energy sector in line with
EU standards.
ERO staff has participated in training, workshops, professional study visits mainly organized by ECS,
REPOWER-USAID, NARUC, etc.
In 2017, with the support of USAID REPOWER project, students from the University of Prishtina and
the American University of Kosovo (AUK) have held their internship at ERO.
1.6 Technical Assistance Projects
During this year as well ERO has benefited from the USAID-funded “Repower Kosova” technical
assistance project. The project aims to support ERO and other relevant institutions dealing with
energy issues. In 2017, “Repower Kosova” supported ERO in harmonizing secondary legislation,
issues related to market liberalization and other issues related to the energy sector, including study
visits related to capacity building for development of legal infrastructure of RES.
1.7 Procurement Activities
ERO has been facing numerous problems as a result Central Procurement Agency (CPA) failure to
perform the procurement procedures. Due to the amendment of the Law on Public Procurement,
the office’s operation has been hampered by the lengthy procedures pursued by CPA while carrying
out procurement activities. This has led the office to remain without services and supplies required
for its normal functioning. Consequently, the procurement plan for 2017 was implemented only
47%.
1.8 ERO funding
ERO is funded from dedicated revenues collected from fees of licensees pursuant to Article 24 of
the Law on Energy Regulator.
14
ANNUAL REPORT 2017
ERO collects fees for:

- Initial and annual fees for licensing;
- Applications for issuance and modification of licenses;
- Issuance of certificates of origin;
- Reviewing of applications for authorization to build new capacities.
15
ANNUAL REPORT 2017
2 ACTIVITIES OF THE ENERGY REGULATORY OFFICE
2.1 Completion of legal and regulatory framework
In August 2016, the Assembly of the Republic of Kosovo adopted the Law No. 05/L-081 on Energy,
the Law No. 05/L-084 on the Energy Regulator and the Law No. 05/L-085 on Electricity. The
aforementioned Laws have been amended and approved in order to transpose the EU's Third
Energy Package.
The Law on the Energy Regulator has determined a period of nine (9) months within which ERO
should issue and harmonize all sub-legal acts within its competence, including harmonization of the
licenses issued. This process started in the last quarter of 2016, while its finalization and approval
took place mainly in 2017.
The new and harmonized sub-legal acts are as follows:
- Rule on licensing of energy activities
- Rule on authorization procedure for construction of new generation capacities
- Rule on confidential information
- Rule on administrative measures and fines
- Rule on general conditions of electricity supply
- Rule on the resolution of complaints and disputes in energy sector
- Rule on disconnection and reconnection of customers in the energy sector
- Rule on taxes
- Rule on certification of the Electricity Transmission System Operator
- Rule for the establishment of the Universal Service Supply income
- Principles on establishment of tariffs for the use of the transmission and market system
- Principles on establishment of tariffs for the use of the distribution system
- Rule on supplier of last resort
- Rule on establishment of the maximum allowed revenues of Distribution System Operator
- Rule on establishment of the maximum allowed revenues of Transmission System and
Market Operator
- Rule on assessment of capital projects in the transmission and distribution network in the
electricity sector.
Following the approval of above mentioned sub-legal acts, all licenses issued by ERO have been
subject to amendment and harmonization. This process was completed in May 2017, whereby ERO,
within the nine (9) month deadline provided for by the Law on the Energy Regulator, has completed
and approved the entire regulatory framework, which is already in compliance with the
requirements of the EU's Third Energy Package.
16
ANNUAL REPORT 2017
2.2 Licensing of energy activities
Energy activities in Kosovo are performed by energy companies equipped with a license by ERO.
Pursuant to the Law No. 05/L-084 on the Energy Regulator and the Rule on Licensing of Energy
Activities in Kosovo, the Regulator has licensed the following activities: electricity production;
thermal energy production; co-production of electricity and thermal energy; transmission of
electricity, including operation of transmission system; distribution of electricity, including
operation of distribution system; distribution of thermal energy; supply of electricity and thermal
energy, including transit, import or export of electricity; wholesale supply (trading) of electricity
supply; and operation of the electricity market.
In addition of aforementioned licenses, applicable laws allow for some energy activities without
having to apply before the Regulatory for a license, as these activities do not have a stringent
impact on Kosovo’s energy system. Activities that do not require a permit are as follows:
 production of electricity at the energy location, with a capacity not exceeding 5 MW;
 production of thermal energy from DHs for own consumption, or with a capacity not
exceeding 1 MW;
 production of electricity for own consumption, where the production facility or electricity
consumers are not connected to the transmission or distribution system.
During 2017, the regulator has received also applications for licensing the electricity supply
activities, wholesale supply (trading) of electricity, license extension, etc.
2.2.1 Licensing of electricity supply activity
ERO has licensed three customers’ retail suppliers, however all customers in the country are
supplied by KESCO as the other two licensed suppliers, HEP and GSA, were passive in terms of
customer supply throughout the year.
Entities that have applied and are in the process of licensing are: “JAHA COMPANY” L.C.C., Kosovo
Energy Corporation and “SharrCem” L.C.C.
The table below contains the enterprises that have applied at the Regulatory Office for licensing of
the electricity supply activity.
17
ANNUAL REPORT 2017
Tab. 2.1 Enterprises that have applied and are in the process of licensing in 2017
Description of licensed License Address, headquarters of the licensee
License
No. Enterprise name
activity number validity
"Future energy trading and Electricity supply Neighbourhood Kalabria, A1, CII,
1 ZRRE/Li_55/16 in process...
exchange dynamics" L.C.C. No.25, Prishtina, Republic of Kosovo
Electricity supply Neighbourhood Arbëri, Str. Ismail Qemali

2 "Jaha company” L.C.C. ZRRE/Li_59/17 in process...
No.17, Prishtina, Republic of Kosovo
Kosovo Energy Electricity supply Str. Nënë Tereza, No.36, 10000

3 ZRRE/Li_60/17 in process...
Corporation L.C.C. Prishtina, Republic of Kosovo
Electricity supply Str. "Adem Jashari" No.280, Hani i

4 "SharrCem" L.C.C. ZRRE/Li_61/17 in process...
Elezit
The company “Future energy trading and exchange dynamics” L.C.C. and "SharrCem" L.C.C. has
completed all procedures required by the Regulator for licensing, while the other two enterprises
are in the process of completing necessary documentation.
During 2017, the Regulator has licensed two (2) legal entities for wholesale supply (trading) of
electricity; one (1) is in the process of licensing, while two (2) entities are in the process of
extending their license for this activity.
Details of enterprises licensed, in process of licensing and those applying for license extension on
wholesale supply (trading) of electricity are as follows:
Tab. 2.2 Enterprises licensed, in the process of licensing and those applying for extension of license for
wholesale supply (trading) of electricity in 2017
Description of licensed License License
No. Enterprise name Address, headquarters of the licensee
activity number validity
Wholesale supply
"Interenergo d.o.o-Kosova" Sali Çeku gogaj Building, app.14, 27.02.2017-
1 (trading) of electricity ZRRE/Li_56/16
SH.P.K. Decan, Republic of Kosovo 26.02.2022
Wholesale supply
Str. Bedri Pejani No 3, 10000 13.04.2017-
2 "MTSP KOSOVO" L.L.C (trading) of electricity ZRRE/Li_58/17
Prishtina, Republic of Kosovo 12.04.2022
Wholesale supply Str.Luan Haradinaj, B.9 E.17

in the licensing
3 "Energy & Energy" SH.P.K. (trading) of electricity ZRRE/Li_57/17 No.10, 10000 Prishtinë, Republic of
process
Kosovo
Wholesale supply Q.Pejton, Str. Mujo Ulqinaku No.5 Ap in the process
"Danske Commodities
4 (tregti) e energjisë ZRRE/Li_39/17 4, 10000 Prishtinë, Republic of for license
Kosovo" SH.P.K.
Kosovo. extension
Wholesale supply in the process
Nena Tereze, 10000 Prishtina,
5 MCM COMMODITIES SH.P.K (trading) of electricity ZRRE/Li_40/17 for license
Repubic of Kosovo
extension
2.2.2 Licensing of electricity production activity
During 2017, ERO has reviewed the application for extending the license of KEK TPP Kosova A.
Because of ERO’s Board lack of quorum for decision-making, no decision was rendered on extending
the license of KEK TPP Kosova A. The process of issuing a license for the company "Kelkos Energy"
L.L.C. (HPP Decan and HPP Belaje) still remains unfinished due to the environmental permit to be
issued by MESP.
18
ANNUAL REPORT 2017
2.2.3 Modification of licenses
In accordance with amendments made to the primary and secondary legislation, the Board of ERO
during 2017 has modified/harmonized all applicable licenses.
2.3 Renewable Energy Sources (RES)
Directive 2009/28/EC sets out the support for the use of electricity generated from RES, issued by
the Parliament and the European Council of 23 April 2009, applicable and enforceable to the Energy
Community States.
The Decision No. D/2012/04/MC-EnC of the Council of Ministers of the South East European Energy
Community (SEEEC) has set the mandatory target for RES by 2020. Under this obligation, 25% of
final energy consumption should be from RES.
The applicable Law No. 05/L-081 on Energy has established the RES policy, which aims to promote
the economic and sustainable exploitation of the local potentials of RES, in order to meet the needs
for energy, increase the security of supply and environmental protection, which is an integral part
of the Energy Strategy of the Republic of Kosovo.
For the purpose of implementing RES policies, the respective Ministry, according to the legislation in
force, has determined with a special sub-legal act the energy targets of RES in accordance with
requirements of relevant directive of the European Union.
Law No. 05/L-84 on the Energy Regulator has established that the construction of new generation
capacities (RES), new systems for transmission and distribution of natural gas, including
interconnectors, and direct electricity lines and direct pipelines for transmission of natural gas shall
be undertaken in line with authorization procedures as described in this law, and shall be carried
out by the Regulator, in line with objective, transparent and non-discriminatory criteria.
In May 2017, the Ministry of Economic Development reviewed the Administrative Instruction No.
01/2013 on RES Targets and has issued a new sub-legal act for RES targets (MW) to be set up by
2020, and the only changes are: Photovoltaic Energy has increased from 10 MW as it was with AI
No. 01/2013 to 30 MW installed capacity and Biomass from 14 MW to 20 MW.
The Administrative Instruction has determined that the mandatory RES target by 2020 is 25% of the
gross final energy consumption as set out in Article 4 of the Decision No. D/2012/04/MC –EnC of
the Ministerial Council of the Energy Community.
The table below presents the RES targets according to the Administrative Instruction No. 05/2017 of
MED.
19
ANNUAL REPORT 2017
Tab. 2.3 Targets according to the MED Administrative Instruction
Renewable Energy Sources Targets according to

Unit
AI 05/2017
RES target % 29.89
Solar MW 30.00
Natural gas/Biomass MW 20.00
Wind MW 150.00
Existing HPP MW 46.21
New HPP MW 240.00
Total RES MW 486.21
Zhuri MW 305.00
In order to achieve the targets for generation of electricity from RES, as set forth in the above-
mentioned Administrative Instruction, and in accordance with the legal mandate provided by the
Energy Legislation in force, the Rule on Authorization Procedure for Construction of New
Generating Capacities, Rule on Support Scheme and Methodologies for Calculation of Incentive
Tariffs have been implemented.
2.4 Authorization - construction of new capacities
During this year, the ERO continued applying authorization procedures, review the applications for
issuing authorization for construction of new generation capacity based on Renewable Energy
Sources (RES) for companies that applied for authorization.
In the framework of fulfilling the obligations set forth in the legislation in force, ERO has issued Final
Authorizations for the Construction of Generating Capacities, whereby each applicant in order to
obtain the authorization was subject to regularity analysis and correctness of legal, administrative,
technical, financial and environmental documentation, as well as obtaining relevant permits for
water use in case of hydropower plant, land use rights, technical solutions of the connection and
environmental consent, issued by relevant institutions in accordance with the activity that entities
have requested for obtaining a Final Authorization for allowing construction of new generating
capacity from RES.
During 2017, ERO has received 16 applications for authorization to build new RES generation
capacities from different legal entities. 7 requests for conversion of the Preliminary Authorization
into a Final Authorization from different sources of energy have been accepted and reviewed. The
number of applications for generation of solar energy and wind energy has increased. During this
year, there were requests for Modification of Final Authorization. While the requests for extension
of validity time-limits of Preliminary Authorization and the Final Authorization was minor. Other
applications for obtaining the Preliminary Authorization and Final Authorization were also received,
but in the absence of the quorum of the Board for Decisions since 15 May 2017, they could not be
reviewed.
20
ANNUAL REPORT 2017
2.4.1 Issuance of preliminary authorization
During 2017, ERO has issued preliminary authorizations for applications that have met the initial
criteria and which remain to meet certain criteria required for granting the final authorization for
construction of new generation capacities.
The following table shows the number of preliminary authorization issued by the Board of ERO
according to various sources in 2017.
Tab. 2.4 RES preliminary authorizations
RES preliminary authorizations No. of decisions issued
Hydro Power Plant 7

Wind Energy 1
Total 8
ERO has issued preliminary authorizations for hydropower plants to 7 legal entities, one preliminary
authorization for wind turbines, while did not issue any preliminary authorization for the
construction of solar/photovoltaic panels. The total installed capacity is around 44.5 MW, of which:
- 7 preliminary authorizations for hydropower plants with a total capacity of 9.5 MW
- 1 preliminary authorization for wind turbines with a capacity of 35 MW
The table 2.5 below presents enterprises which have been issued with a preliminary authorization.
Tab. 2.5 Enterprises to which was issued the Decision of Preliminary Authorization
Date of issuance
Installed
No. Legal entity Facility Location of the Preliminary
capacity
Authorization
HPP Strazhë Municipality of
1 Hidro Forca L.L.C. Hydro Power Plant 1.08 MW 17 March 2017
Kacanik
Security Team Kabashi e K
2 Hydro Power Plant HPP Erenik. Municipality of Junik 1.86 MW 17 March 2017
L.L.C.
HPP Kaqandollë, Municipality of
3 Hidrocom L.L.C. Hydro Power Plant 2.6 MW 17 March 2017
Vushtria
HPP Llapi 1 Municipality of
4 Monten L.L.C. Hydro Power Plant 0.79 MW 17 March 2017
Podujeva
HPP Llapi 2 Municipality of
5 Monten L.L.C. Hydro Power Plant 0.8 MW 17 March 2017
Podujeva
Wind Park- KOZNICA,
6 Prishtina – Energy L.L.C. Wind Turbine 35. MW 17 March 2017
Municipality of Novoberda
HPP Radesha 1 Municipality of
7 Puna L.L.C. Hydro Power Plant 0.715 MW 10 May 2017
Dragash
HPP Radesha 1 Municipality of
8 Puna L.L.C. Hydro Power Plant 1.7 MW 10 May 2017
Dragast
Compared to 2016, where ERO issued twenty-three (23) preliminary authorizations, in 2017, due to
the lack of the Board's decision-making capacities, only seven (7) decisions for preliminary
authorizations with a total installed capacity of 44.54 MW have been issued. These applications
must be completed within the legal limits in order for ERO to issue final authorizations to
commence the construction of new generation capacity from RES.
21
ANNUAL REPORT 2017
Decisions on the Notice of Preliminary Authorization stipulate that applicants have proved their
eligibility for the construction of new generating establishments nevertheless they have not yet met
the other requirements relevant to the commencement of construction of new generation
establishment before fulfilling all the conditions and requirements set out in the applicable
legislation. Such decisions oblige the applicants that within a period of one (1) year from the
issuance of preliminary authorization, they must meet other legal requirements and make a written
request in order to be granted with final authorization for construction.
Preliminary Authorization issued to the company Prishtina - Energy SH.PK. (Wind Turbines) is
beyond the RES targets defined by Administrative Instruction No. 05.2017 issued by the Ministry,
but such authorization has been included in the Support Scheme as a "pending" application, and as
long as there are no defined targets or until new targets are defined, these shall remain as pending
applications for admission to the Support Scheme, and legal deadlines shall not start to run until
ERO notifies in writing that the legal deadlines have started to run.
It is worth mentioning that upon issuance of a decision for preliminary authorization, such decision
defines the availability of the targets as well as the admission of the applicant to the Support
Scheme and the automatic guarantee of the feed-in tariff as well as the guarantee of the sale of
electricity for the period determined by legislation in force.
2.4.2 Applications under review by ERO
During this year, ERO has received applications for obtaining authorization for construction of new
generating capacities, as such applications are in the phase of being completed. The table 2.6 below
shows the list of applications under review.
Tab. 2.6 Companies under review for obtaining a decision on preliminary authorization
Installed
No. Legal Entity Facility Location Application Date
capacity
Madanja, Kusar, Municipality
1 Alsi & Kosove L.L.C. Solar Panels 3 MW 19 April 2017
of Gjakova
Madanaj, Kusar, Municipality
2 Bulding Construction L.L.C. Solar Panels 3 MW 19 April 2017
of Gjakova
3 Jaha Solar SH.P.K. Solar Panels 3 MW 15 May 2017
of Gjakova
4 Jaha Solar SH.P.K. Solar Panels 3 MW 15 May 2017
of Gjakova
Buroj, Municipality of
5 Jaha Company SH.P.K. Solar Panels Skenderaj 3 MW 15 May 2017
6 Jaha Company SH.P.K. Solar Panels 3 MW 15 May 2017
Skenderaj
7 Jaha Company SH.P.K. Solar Panels 3 MW 15 May 2017
Skenderaj
Wind Wind Park – Zatric, Municipality
8 Ev Wind Park SH.P.K. 32.4 MW 27 October 2017
Turbines of Rahovec
Wind Wind Park – Zatric, Municipality
9 Ev Wind Park SH.P.K. 32.4 MW 27 October 2017
Turbines of Rahovec
22
ANNUAL REPORT 2017
ERO has evaluated applications requesting issuance of authorizations for construction of new
generating capacities, complying with all the legal procedures and criteria for meeting the RES
targets set out in the applicable guidelines, however, in the absence of decision making, it could not
issue Preliminary Authorizations to the above-mentioned applicants.
2.4.3 Termination of preliminary authorization
ERO has also reviewed the decisions for terminating the preliminary authorization. The table below
shows the companies whose preliminary authorizations were terminated according to the legal
power.
Tab. 2.7 Companies the preliminary authorizations of which were terminated
Installed
No. Legal Entity Facility Location Termination Date
capacity
Triangle General HPP Jasiq Erenik, Municipality of
1 Hydro Power Plant 5 MW 28 January 2017
Contractors – INC Branc Junik
Triangle General HPP Mal Erenik, Municipality of
2 Hydro Power Plant 7.5 MW 28 January 2017
Contractors – INC Branc Junik
HPP Radoniqi, Municipality of
3 Fidani Water Energy SH.P.K. Hydro Power Plant 0.43 MW 19 May 2017
Gjakova
The termination of the preliminary authorization resulted from the expiration of the validity period,
whereby the applicant was obliged to submit, within the legal deadline, an application for
conversion of the Preliminary Authorization into a Final Authorization.
2.4.4 Projects in the process of extending the preliminary authorization validity
During this year, ERO has received applications for extension of validity time-limits from the holders
of decisions for preliminary authorization, , in order for them to complete the relevant evidence
mainly of the construction permit issued by the competent authorities and of the connection
agreement depending on the voltage level from the system operators in Kosovo.
The table below shows the legal entities that have submitted to ERO an application for an extension
of validity of the preliminary authorization.
Tab. 2.8 Companies in the process of extending the preliminary authorization validity
Installed Extension
No. Legal Entity Facility Location
capacity Application Date
HPP Prizreni 9,
1 gEnCi SH.P.K. Hydro Power Plant 1.93 MW 02 November 2017
Municipality of Prizren
HPP Prizreni 9,
HPP Prizreni 9,
HPP soponica,
4 Hi droforca SH.P.K. Hydro Power Plant 3 MW 03 November 2017
Municipality of Kaçanik
Hydro Power Plant HPP Vica, Municipality of

5 Matkos Group SH.P.K. 4.6 MW 06 November 2017
Shtërpca
Wind Park, Selac 1,
6 Sowi Kosovo L.L.C. Wind Turbines 35 MW 06 November 2017
Municipality of Mitrovica
Wind Park, Selac 2,
23
ANNUAL REPORT 2017
Wind Park, Selac3,

The applications for extending the validity of the Preliminary Authorization were submitted within
the regular legal time limits, but due to the lack of decision-making capacities ERO has been unable
to review and decide on such applications.
2.4.5 Projects pending of final authorization
During this year, ERO has received applications for conversion of the preliminary authorization into
a final authorization for the construction of new RES generating capacities. Such applications have
been assessed as completed with relevant evidence issued by relevant institutions in the Republic
of Kosovo, in accordance with the legal provisions of the Rule on Authorization Procedure.
The following table shows the legal entities that have submitted an application for the conversion of
the preliminary authorization into a final authorization for construction.
Tab. 2.9 Companies pending final authorization
Final Authorization
Installed
No. Legal Entity Facility Location Application Date
capacity
N.P.N. Renelual Tahiri HPP Dragash, Municipality

1 Hydro Power Plant 3.4 MW 19 July 2017
SH.P.K. of Dragash
HPP Katlina 1, Municipality
2 Afa Energy SH.P.K. Hydro Power Plant 2.4 MW 24 July 2017
of Kaçanik
HPP Katlina 2, Municipality
3 Afa Energy SH.P.K. Hydro Power Plant 2.7 MW 24 July 2017
of Kaçanik
Applications for conversion of Preliminary Authorization into Final Authorization were submitted
within the regular legal time limits, but due to the lack of decision-making capacities ERO has been
unable to issue the Final Authorization for constructions.
2.4.6 Issuance of final authorization
During 2017, ERO has reviewed applications for issuance of Final Authorization, together with the
complete documentation for conversion of decision on the preliminary authorization into a Final
Authorization for construction.
The table below shows the number of final authorizations issued by the Board of ERO according to
different RES sources during 2017.
Tab. 2.10 Final authorizations of RES
No. of issued
Final Authorizations from RES
decisions
Hydro Power Plants 6
Energy from Solar Panels (Photovoltaic) 1
Total 7
24
ANNUAL REPORT 2017
6 final authorizations were issued for the construction of new generating capacities from
hydropower plants while one (1) final authorization was issued for construction of
solar/photovoltaic panels with a total installed capacity of 11.3 MW, out of which:
- 6 authorizations for hydropower plants with a total capacity of 10.9 MW
- 1 authorization for solar panels with a capacity of 0.4 MW
The table below shows the legal entities that were issued the Final Authorization for Construction of
New Generating Capacities.
Tab. 2.11 Companies that were issued a final authorization for construction
Final
Installed
No. Legal Entity Facility Location Authorization
capacity
Issuance Date
HPP Soponica,
1 2 KORRIKU SH.P.K. Hydro Power Plant 1.3 MW 18 January 2017
HPP Brodi I.
2 EUROKOS JH SH.P.K. Hydro Power Plant 1.06 MW 09 February 2017
Municipality of Dragash
HPP Restelica 3,
3 EUROKOS JH SH.P.K. Hydro Power Plant 1.49 MW 09 February 2017
HPP Albaniku 1,
4 Hidro Line SH.P.K. Hydro Power Plant 1.86 MW 27 February 2017
HPP Albaniku 4,
5 Hidro Line SH.P.K. Hydro Power Plant 1.11 MW 27 February 2017
HPP Orqusha,
6 RENELUAL TAHIRI SH.P.K. Hydro Power Plant 4 MW 27 February 2017
7 N.T.SH. ELEING Solar Panels Llabjan, Municipality of Peja 0.4 MW 31 March 2017
The aforementioned projects are expected to be implemented within a period of two (2) years
under the terms of the Authorization.
2.4.7 Modification of the Final Authorization
ERO during this year has received numerous requests for modification of Final Authorization for the
construction of new generation capacities from RES. Such applications after being completed with
relevant evidence issued by relevant institutions in the Republic of Kosovo are assessed and
reviewed by the Board of ERO, in accordance to the provisions of the Rule on Authorization
Procedure.
The table below shows the legal entities that were allowed to modify the final authorization for the
installed capacities for generation of electricity from RESs.
Tab. 2.12 Companies the final authorization of which has been modified
Final
Installed
No. Legal Entity Facility Location Authorization
capacity
Modification Date
1 EkoEnergji SH.P.K. Hydro Power Plant HPP Binca, Municipality of Viti 1 MW 27 February 2017
25
ANNUAL REPORT 2017
HPP Lepenci 3,
2 Hidroenergji SH.P.K. Hydro Power Plant 9.98 MW 10 May 2017
Modification of the Final Authorization of the company EkoEnergji L.L.C is required for Binqa Hydro
Power Plant for the installed capacity of 0.6 MW, authorized by the Decision V-737-2015 dated 15
June 2015 and modified by the Decision V-892-2017 dated 27.02.2017 of the installed capacity of 1
MW in Morava e Binqes River, municipality of Vitia, by meeting the environmental and water
requirements. Whereas, the modification of the final authorization V-755-2016 dated 28 January
2016 issued to Hidroenergji L.L.C from the initial installed capacity of 8.5 MW in the installed
capacity of 9.98 MW was allowed in accordance with the Water Permit issued by MESP. These
modifications have been allowed in accordance with the criteria and legal requirements of the
applicable legislation.
2.4.8 Entry into operation of generators from RES
During this year, after the finalization of the project authorized by the ERO Board, only one
Hydropower Plant has become operational, with a total installed capacity of 2.01 MW.
The table below shows the legal entity that has started operation for generation of electricity from
RES.
Tab. 2.13 The company that has become operational
Installed Date of becoming
No. Legal Entity Facility Location
capacity operational
HPP Brezovicaja,
1 Matkos Group SH.P.K. Hydro Power Plant 2.01 MW 19 April 2017
Municipality of Shtërpca
Fig. 2.1 Images from the HPP Brezovica facility
The HPP Brezovica Project is in commercial operation, and since 19 April 2017, has finalized the
Agreement for the Purchase of Energy for the Generation of Electricity from RES. The agreement
was signed for a period of ten (10) years.
26
ANNUAL REPORT 2017
2.5 Monitoring the construction of new generating capacities
During this year, ERO has monitored the legal entities that are equipped with a Final Authorization
for construction of generating capacities for generation of electricity from RES.
ERO has monitored the works that are being carried out by the Air Energy L.L.C which is authorized
by Decision V-824-2016 for construction of new generating capacities for generation of electricity
from wind turbines at the place called “Wind park - KITKA”, for the installation of 9 wind turbines
with a total installed capacity of 32.4 MW, CZ, Hogosht, Poliçka and Velegllava, Municipality of
Kamenica.
Below you can find pictures from the field showing the installation of wind turbines and the
construction of the substation, which are in different installation/construction stages.
Fig. 2.2 Images of the wind turbine base and of the 110 kV substation "Wind park - KITKA"
ERO has monitored the works that are being carried out by Matkos Group L.L.C for HPP Vica, HPP
Shterpca and HPP Sharri, authorized by Decisions V-640-2014, V-759-2016 and V-760-2016, for the
construction of new generating capacities from Hydro Power Plants, with total installed capacity of
16 MW for the three (3) projects, CZ Shterpca, Municipality of Shterpca.
Below you can find pictures from the field showing the hydro power plants that are in different
construction stages.
27
ANNUAL REPORT 2017
Fig. 2.3 Images of the construction of HPP Vica, HPP Shterpca and HPP Sharri
ERO has monitored the works being carried out by HIDROENERGJI SH.P.K. for HPP Lepenci 1 Project,
authorized by Decision V-755-2016, for the construction of new generating capacities from the
Hydro Power Plant, with an installed capacity of 9.98 MW, CZ, Municipality of Kaçanik.
Below you can find pictures from the field showing the hydro power plant which is in the
construction phase.
Fig. 2.4 Images of the construction of HPP Lepenci 3
ERO has monitored the works that are being carried out by EUROKOS JH L.L.C for HPP Brodi 3
Project, authorized by Decision V-870-2016, for the construction of new generating capacities from
the Hydro Power Plant, with an installed capacity of 4.7 MW, CZ Kukalana, Municipality of Dragash.
Below you can find pictures from the field showing the hydro power plant which is in the
construction phase.
Fig. 2.5 Images of the construction of HPP Brodi 3
ERO has monitored the works that are being carried out by N.T.N. RENELUAL TAHIRI L.L.C for the
HPP Orqusha Project, authorized by Decision V-891-2017, for the construction of new generating
capacities from the Hydro Power Plant, with an installed capacity of 4 MW, CZ Orqusha, and
28
ANNUAL REPORT 2017
Municipality of Dragash. Also, ERO has monitored the works that are being carried out by 2 Korriku
L.L.C for the HPP Soponica Project, authorized by Decision V-880-2017, for the construction of new
generating capacities from the Hydro Power Plant, with an installed capacity of 1.3 MW, CZ
Doganaj, Municipality of Kaçanik.
ERO will continue to monitor the construction of new generating capacities from Renewable Energy
Sources, while complying with all legal procedures and criteria established by the applicable
legislation.
2.6 Court cases
Lawsuit filed by KEK

On 22 May 2017, ERO was sued by the Kosovo Energy Corporation (KEK JSC) for annulment of
Decision V-909-2017 dated 13.04.2017. The lawsuit was filed with the Basic Court in Prishtina,
Department for Administrative Matters, with a proposal to postpone the execution of the
challenged decision until the case is ruled according to the lawsuit filed by the plaintiff. Decision V-
909-2017 deals with the adjustments for capital investments of the regulatory period 2013-2016 for
KEK JSC.
On 28.05.2017, ERO received from the Basic Court in Prishtina, Department for Administrative
Affairs, the Decision A. No. 861/17 dated 23.05.2017 which rejected the lawsuit of the plaintiff, KEK
JSC, for postponement of the execution of the decision of the respondent, namely ERO, i.e. the
Decision V_909-2017 dated 13 April 2017, until the case is ruled according to the lawsuit. After KEK
JSC filed a complaint with the Appellate Court of Kosovo and after ERO's response to the complaint,
the Appellate Court of Kosovo rendered the Decision AA No. 269/17, which confirmed the decision
of the Basic Court in Prishtina.
Lawsuit filed by KESCO
Matters, the Decision A. No. 1780/16, dated 09.08.2017, which obliged ERO to file a response to the
lawsuit regarding the initiation of the Administrative Conflict by KESCO JSC for the abrogation of the
ERO Board's Decision V_860-2016, dated 14.10.2016, for licensing HEP-KS LLC to carry out activities
of electricity supply.
On 11.09.2017, ERO filed with the Basic Court in Prishtina a response to the lawsuit requesting to
fully reject the lawsuit of the plaintiff, KESCO JSC, by presenting the necessary facts as well as
requesting that the abovementioned decision of the ERO Board remains in force as grounded.
The lawsuit filed by the Ombudsperson
ERO was sued at the Basic Court in Prishtina, Department for Administrative Matters, by the
Ombudsperson of the Republic of Kosovo for annulment of the Decision V-399-2012 dated
06.02.2012, with a proposal to postpone the execution of the challenged decision until the case is
ruled according to the plaintiff's lawsuit. ERO's Decision V_399_2012 relates to the regulatory
parameters which, among other things, stipulate that "... the loss reduction curb in distribution shall
start at values realised during 2011 and shall be reduced by 3% (percentage points) in the first 3
years and by 2.5% (percentage points) in 3 subsequent years ... ".
29
ANNUAL REPORT 2017
Matters, the Decision A. No. 1373/17, dated 11.09.2017, which "Approves the request of the
claimant, namely the Ombudsperson of the Republic of Kosovo, and postpones the execution of the
decision of the respondent, Energy Regulatory Office in Pristina, Decision V_399_2012 dated
06.02.2012, until a judgement is rendered regarding the claimants lawsuit". Upon receipt of the
aforementioned decision, on 29.09.2017, ERO filed a complaint with the Appellate Court of Kosovo,
challenging the Decision of the First Instance Court in its entirety and proposing to approve ERO's
Complaint as grounded and annul the Decision of the Basic Court in Prishtina.
On 30.10.2017, ERO received from the Appellate Court of Kosovo, Department for Administrative
Matters, the Decision AA. No. 451/17, dated 20.10.2017, with rejects ERO's Complaint as
ungrounded and confirms the Decision A. No. 1373/17, dated 11.09.2017, of the Basic Court in
Prishtina, Department for Administrative Matters.
On 29.11.2017, ERO submitted a request to the Supreme Court of Kosovo for extraordinary review
of the court decision, whereby challenged the Decision A. No. 1373/17, dated 11.09.2017, of the
Basic Court in Prishtina, Department for Administrative Matters, and the Decision AA. No. 451/17,
dated 20.10.2017, of the Appellate Court of Kosovo, with a proposal to annul the challenged
decisions and return the case to the first instance court for review and retrial, or to amend the
Decision of the Basic Court in Pristina and approve ERO's Complaint as grounded.
2.7 Annual balance of electricity and thermal energy
According to the Law on Energy (No. 05/L-081), ERO is responsible for balances, including annual
and long-term (10 years) balances of electricity, thermal energy and natural gas. The law also
defines the obligations of system operators for preparation of these balances. The annual balances
should be approved by ERO separately and then summarized as a whole for electricity, thermal
energy and natural gas and published on the website. Since Kosovo does not have a natural gas
system, no annual natural gas balance has been prepared.
In 2017, the following balances were prepared and finalized:
 Annual Electricity Balance for 2018; and
 Annual Thermal Energy Balance (for DH Termokos and DH Gjakova) for 2018;
The Annual Energy Balance summarized for 2017 is published on ERO's website www.ero-ks.org,
while the Annual Energy Balance for 2018 will be published after its approval.
The balances have so far been prepared based on the Methodology for Preparation of Energy
Balance and based on the Administrative Instruction No. 07/ 2011 on Rules for Energy Balance.
During 2017, ERO has prepared the Rule on Preparation of Electricity and Thermal Energy Balances,
which also contains methodologies for drafting and procedures for preparing, delivering, reviewing
and approving the annual and multi-annual electricity and thermal balances. ERO is currently
finalizing this Rule which is then to be approved by ERO's Board.
30
ANNUAL REPORT 2017
2.8 ERO's activities in the field of pricing regulation
Based on the Law on Energy Regulator and based on the Rules for Determination of Maximum
Allowed Revenues (MAR), taking into account the powers being conferred with, ERO is the sole
responsible authority for setting tariffs for regulated activities in the energy sector.
In order to fulfil this legal obligation, one of ERO's main activities during 2017 was the process of
annual adjustments to MAR and the review of applications for new tariffs by licensees in the energy
sector, including transmission, distribution and the public supply of electricity for tariff customers
and licensees in the thermal energy sector.
ERO throughout the whole review process has given a special emphasis on public consultation. It
also includes the publication of documents on the website as follows:
 KEK JSC Capital Investments Adjustments Report;

 Final Report on DSO Maximum Allowed Revenues;
 Final Report on TSO/MO Maximum Allowed Revenues;
 Notification on the execution of the Decision AA. No. 451/2017, dated 20 October
2017, of the Appellate Court of Kosovo.
2.8.1 Energy tariffs in the liberalized market
In January 2017, ERO issued the document entitled "Guideline on Liberalization of Electricity Market
in Kosovo", which defines the manner, criteria and timing of electricity market liberalization in
Kosovo, at electricity generation and supply level. This Guideline sets the preconditions for market
liberalization, development of effective competition in the electricity market, deregulation of
electricity generation prices for KEK JSC starting from March 2017, purchase of electricity losses by
Transmission System Operator and Distribution System Operator in a competitive market.
Also, in the light of reforms to be undertaken during the year is the establishment of a fund for
renewable energy sources (RES), where the difference between the market prices and the feed-in
tariffs will be covered by the RES Fund.
In addition to the above-described reforms related to the wholesale market, ERO has created the
necessary legal framework to enable opening of the retail market, namely providing the final
customers with the opportunity to freely choose their supplier. The process of market liberalization
at retail level is guaranteed by the following rules: Rule on Determination of Revenues for Universal
Service Supplier, Rule on Supplier of Last Resort, and the Supplier Switching Rule.
Given the complexity of the market liberalization process, ERO has planned to continue with this
process gradually and in cooperation with all parties responsible in the energy sector. In this regard,
in accordance with the Guideline on Liberalization of Electricity Market in Kosovo, the retail market
will be opened in several phases, depending on the type of customer and the voltage they are
connected to. Customers connected to the 220 kV and 110 kV transmission level are subject to
market conditions and prices applicable from 31 March 2017, while commercial customers
31
ANNUAL REPORT 2017
connected to 35 kV and 10 kV voltage levels are expected to be subject to electricity market

conditions and prices applicable from 31 March 2018.
2.8.2 Adjustments to the electricity supply costs for KEK
During the 4-year Periodic Review (1 April 2013 until 31 March 2017), ERO has defined the
maximum allowed revenues that enabled a normal operation and enabled the carrying out of
capital investments necessary for this period. The total value of investments allowed in KEK JSC for
a period of four (4) years was EUR 208.4 million, including investments in: TPP Kosova A, EUR 58.4
million, TPP Kosova B, EUR 44.1 million, and the Mining Division, EUR 105.9 million.
Based on the Rule on Regulated Generator Pricing, the multi-year review period ended on 31 March
2017, and from that date, ERO does not adjust the prices for KEK JSC. Based on this Rule, ERO
should make adjustments to capital investments allowed and carried out by KEK. During this
process, ERO adjusts KEK's revenues in case there is a difference between the capital investments
allowed and carried out, compensating customers for depreciation and return on these
investments. This compensation is adjusted to the interest rate designated as the entry value during
the regulatory period.
The data submitted by KEK showed an unsatisfactory state of investments carried out over the four
year period. From the total allowed investment value for KEK in all divisions, around EUR 101.4
million have been spent, or 48.7% of the total value, if expressed in percentage.
The following table shows the capital investments allowed and carried out in KEK JSC for the period
from 1 April 2013 until 31 March 2017.
Tab. 2.14 Investments in KEK during the four-year period
INVESTMENTS IN KEK
Mining TPP KOSOVA A TPP KOSOVA B Total
Allowed Carried out Allowed Carried out Allowed Carried out Allowed Carried out
Year
(€ mil) (€ mil) (€ mil) (€ mil) (€ mil) (€ mil) (€ mil) (€ mil)
2013 14.51 8.44 23.02 30.46 9.07 1.87 46.60 40.77

2014 39.96 10.44 17.71 9.81 5.50 9.19 63.17 29.44
2015 41.45 6.19 10.21 8.87 16.50 6.04 68.16 21.10
2016 9.95 5.92 7.50 2.60 13.00 1.61 30.45 10.13
Total 105.87 30.99 58.44 51.74 44.07 18.71 208.38 101.43
After making calculations for adjustments due to investments not being carried out, it turns out that
consumers should be compensated in the amount of EUR 21,534,381.
ERO has analysed several ways to adjust KEK's capital costs in order to compensate all customers
who have paid these costs during the period 2013-2016 through electricity bills. ERO has estimated
that the fairest way to compensate the customers is through the transmission system, where all
customers would benefit regardless of the voltage and regulation level. As noted above,
deregulation of retail prices for customers connected to 220kV and 110kV level and to other
32
ANNUAL REPORT 2017
customers has already commenced and therefore compensation through suppliers will be very
difficult to be done.
It should be noted that KEK should return revenues for the portion of depreciation and return
received for investments not carried out, adjusted to the interest rate, within a period of two (2)
years.
KEK will supply KOSTT with energy for transmission system needs for free, as a form of
compensation to consumers. The estimated amount of transmission system energy needs (for
covering the losses) during the regulatory year 2017/2018 is foreseen to be 360 GWh. KEK must
supply KOSTT with at least 302 GWh in order to compensate EUR 10.7 million in the first year (April
2017 - March 2018) from the total amount to be returned. The remaining amount of EUR 21.5
million will be returned in the second year, taking into account the energy quantity and market
prices for energy purchasing in the wholesale market.
Starting from 1st of April 2017, KEK has had several options for selling electricity to local market.
Sales of electricity generated by KEK were made with these market prices:
 sales of electricity for supplying the customers with universal service at the price of EUR
28.6/MWh;
 sales of electricity to customers connected to the 110 kV voltage level at the price of EUR
35.4/MWh;
 sales of electricity to KOSTT and KEDS to cover losses in their networks at the price of EUR
35.4/MWh; and;
 sales as electricity export at the price of EUR 37.8/MWh.
2.8.3 Electricity tariffs for final customers
The block tariff structure, applicable until March 2017 for household consumers, although it is
based on the basic principles of covering costs and reflects the current economic situation of the
country, it is, however, a bit complex and sometimes not well-understood by consumer. After
energy market liberalization, it was necessary to simplify this tariff structure, so that consumers can
easily estimate the cost of supply from different suppliers. This tariff structure is based on relevant
rules and methodologies that reflect the principle of the real cost of service for each customer
group at different voltage levels.
As of 1 April 2017, ERO has changed the retail tariff structure in the electricity sector, whereby it
resulted that this structure is simple and understandable, cost-reflective, encourages efficient
energy consumption and is easily administered by the supplier. The tariff structure was changed for
the final customers. One of the essential changes is the elimination of seasonal tariffs, and now the
tariffs will be the same regardless of consumption season (summer or winter) and will include all
final customers. This proposal resulted because of the minimal changes to the supply costs between
winter and summer seasons. As a result of this change, final customers will have an unchanged
price in terms of the season, for every kWh spent. Changing the tariff structure for household
customers has maintained the average tariff as it was in the previous year, in 2016. The other
proposed change involves only household customers and concerns the abolition of block tariffs on
33
ANNUAL REPORT 2017
the basis of consumption levels. With the new tariff structure, tariffs will be eliminated according to
the consumption level blocks and will be shifted to the average daily (day/night) tariffs per kWh
regardless of the quantity consumed. In this way, each customer will find it easier to calculate his
bill and plan the consumption as needed. The day/night tariffs have remained in force in order to
promote a more efficient use of energy during the peak load. This way, there will be an incentive for
customers to shift part of the consumption from peak load (day) to off-peak load (night).
2.8.4 The impact of Appellate Court's Decision on the Interim Measure in changing the
tariffs
On 13 June 2017, ERO received a Report with Recommendations from the Ombudsperson of the
Republic of Kosovo regarding the billing of electricity consumed in the four northern municipalities
of the Republic of Kosovo.
On 12 July 2017, ERO has formally responded to recommendations under the Ombudsperson's
Report, informing him in detail that the unbilled electricity in the four northern municipalities is a
direct consequence of local authorities refusal in four municipalities of the country’s northern part
to recognize the legitimacy of the Government of the Republic of Kosovo, the legitimacy of the laws,
regulations, institutions and of the obligations of public service providers, including access to their
assets, which has resulted in a constant and persistent non-payment of electricity by electricity
consumers residing in these municipalities.
After receiving the written responses from ERO, the Ombudsperson of the Republic of Kosovo filed
a lawsuit with the Basic Court in Prishtina, Department for Administrative Affairs, against ERO,
requesting annulment of Decision V_399_2012 issued by ERO’s Board on 06.02.2012, and proposing
to postpone the execution of this decision until a merit-based review of the lawsuit.
Basic Court in Prishtina, Department for Administrative Affairs, has issued a Decision on an interim
measure to postpone the execution of the Decision No. V_399_2012 confirmed by the Appellate
Court.
Based on the court decision on the interim measure, ERO, within the legal deadline, has notified in
writing KOSTT, KEDS and KESCO and has provided them with instructions on how to apply this court
decision by adjusting the tariffs for final customers and the tariffs for TSO/MO for the costs of
supply to the four northern municipalities of Kosovo.
34
ANNUAL REPORT 2017
Tab. 2.15 Structure of tariffs for retail customers
35
ANNUAL REPORT 2017
2.8.5 Tariffs for using the transmission system
Every relevant tariff year, ERO has reviewed the Maximum Allowed Revenues through annual
adjustments, setting tariffs in accordance with the Rule on Maximum Allowed Revenues of
Transmission System Operator and Market Operator.
During this process, the licensees submitted the applications with requests for maximum allowed
revenues, including requests for operating expenses, repairs, maintenance and capital expenses.
ERO has evaluated such applications and has prepared the Consultative Report on Maximum
Allowed Revenues of the TSO/MO, putting such report on public consultation for receiving
comments from all parties involved in this process. After reviewing the comments, ERO has also
prepared the Final Report on Maximum Allowed Revenues and TSO/MO tariffs in the amount of
EUR 25.22 million, or EUR 2.85 million more than in 2016.
The ERO Board, after reviewing all relevant documents, in the meeting held in March and April
2017, issued the following decisions:
- V_907_2017 on Approval of Maximum Allowed Revenues for the Transmission, System and
Market Operator (KOSTT);
- V_913_2017 on Approval of Tariffs for Using of the Transmission, System and Market
Operator (KOSTT).
Based on the aforementioned decisions, ERO has set KOSTT tariffs to cover its maximum allowed
revenues, but these tariffs have been reduced in December 2017 in order to reflect the
implementation of the Appellate Court's decision to remove costs of four northern municipalities
from the tariffs of regulated customers.
The following table shows the structure of TSO/MO tariffs applied from 1st of April to 30 November
and from 1st of December 2017 onwards.
Tab. 2.16 Structure of TSO/MO tariffs
Tariffs Tariffs
Tariff group Tariff element Unit
April-November 1 December
System Operator Tariff €/MWh 0.42 0.223
Generation connected to
transmission Market Operator Tariff €/MWh 0.037 0.019

Generation connected to
distribution Market Operator Tariff €/MWh 0.037 0.019

Distribution Operator
Market Operator Tariff €/MWh 0.044 0.023
TUOS Tariff 400/220 kV €/kW/yea 6.081 3.224

r
TUOS Tariff 110 kV €/kW/yea 11.731 6.22
r
Supply System Operator Tariff €/MWh 0.499 0.265
Market Operator Tariff €/MWh 0.044 0.023
RES Fund Tariff €/MWh 1.763 1.763
36
ANNUAL REPORT 2017
2.8.6 Tariffs for using the distribution system
The Maximum Allowed Revenues and tariffs for Distribution System Operator (KEDS JSC) were
reviewed based on the Rule for Maximum Allowed Revenues of the DSO.
Based on this Rule, licensees have submitted the maximum revenue application that includes
requests for DSO's operational, maintenance, and capital expenditures. Based on the application,
KEDS’s request for revenues for the relevant tariff year 2017 was in the amount of EUR 86.34
million.
After evaluating such application, ERO prepared a consultative report on the DSO (KEDS) maximum
revenue, subjecting such report to public consultation. After reviewing the comments, ERO
prepared the final report and set the maximum allowed revenues of KEDS in the amount of EUR
67.53 million, or EUR 19.81 million less than the KEDS request, i.e. EUR 9 million less than in 2016.
ERO's decision to reduce KEDS’s maximum allowed revenues to this level has come as a result of:
 application of the efficiency factor for operational and maintenance costs of 5%;
 application of losses reduction target by ERO;
 realization of unregulated revenues by KEDS such as: new connections, leasing of assets,
utilization of DSO network by operators IPKO and Kujtesa;
 application of the revenue correction factor, etc.

After reviewing all relevant documents, the ERO’s Board issued the following decisions:
- V_908_2017 on approval of Maximum Allowed Revenues for KEDS;
- V_914_2017 on approval of the tariffs for using the Distribution Network.
Based on the Methodology for Setting the Tariffs for Using the Distribution Network, ERO approved
the tariffs for KEDS.
The following table shows the structure of tariffs for the DSO, applied since 1st of April 2017.
Tab.2.17 Structure of tariffs for the DSO
Tariffs for customers connected to DSO
Voltage level Unit Tariff

35 kV €c/kWh 1.07
10 kV €c/kWh 1.45
0.4 kV €c/kWh 2.15
The tariffs for using the distribution system, set by ERO, are charged to users of the distribution
system by the DSO based on the voltage level.
2.8.7 Thermal energy tariffs
In accordance with the legal provisions, ERO determines Maximum Allowed Revenues and Thermal
Energy Tariffs based on the Thermal Energy Pricing Rule.
This Rule, inter alia:
37
ANNUAL REPORT 2017
 Determines the bases and methodology for calculating the Maximum Allowed Revenues
and thermal energy tariffs;
 Establishes the procedures for submitting applications and reviewing, adjusting and
approving tariffs in the regulated thermal energy sector.
In order to implement this Rule, respectively the Methodology for Calculating the Maximum
Allowed Revenues and Thermal Energy Tariffs, the Model for calculating maximum allowed
revenues and thermal energy tariffs has been developed (prepared).
As provided for in the Rule on Determination of Thermal Energy Maximum Allowed Revenues, ERO
has monitored, i.e. reconsolidated, the 2016/2017 season to verify the realization of maximum
allowable revenues of 2016/2017 season by DH Termokos, as this report showed that revenues
allowed by ERO almost completely match those realized by DH Termokos for the 2016/2017 season.
Due to not having ERO Board's quorum, no decision was made on the thermal energy tariffs for the
2017/2018 season, and consequently, they remained the same as those of the previous season.
The structure of thermal energy tariffs for DH Termokos and DH Gjakova is as follows.
Tab. 2.18 Thermal energy tariffs
2.9 Promoting electricity generation from RES
Feed-in tariffs are a mechanism for promoting investment in the generation of electricity from
renewable sources, which are applied in developing countries as well as in the developed countries
(EU, USA and beyond).
Based on the Methodology for Calculating the Feed-In Tariffs, ERO has determined the level of feed-
in tariffs of electricity produced by wind, water, solar and biomass sources. This methodology has
taken into account investment costs, operating expenses, return on capital and other relevant data
that were necessary for calculating this tariff.
The following table shows the feed-in tariffs for generation of electricity from RES, by technologies,
and approved by the ERO Board.
38
ANNUAL REPORT 2017
Tab. 2.19 Feed-in tariffs for RES by technology

Feed-in tariffs applicable to RES
RES €/MWh
Wind 85.00
Photovoltaic 136.40
Small Hydro Power Plants 67.47
Biomass 71.30
The RES generators which have not been accepted in the Support Scheme may choose to operate as
generators with regulated prices or as generators in the free market and will be subject to
applicable rules covering their imbalances and having priority in dispatch and priority in connection.
The Support Scheme provides financial incentives to build sufficient capacities for generation of
electricity from RES in order to reach the target set for RES according to the Administrative
Instruction.
The Renewable Energy Fund (REF) is created and managed by the Market Operator (MO) in
accordance with the Rule on Support Scheme. The MO buys all electricity generated (measured)
from BRE based on relevant prices from the Support Scheme. This electricity is then covered by
suppliers at reference prices which represent wholesale electricity purchase prices including import,
while the difference between the price under the Support Scheme and the reference price is
covered by all suppliers in proportion to the electricity supplied through REF.
The tariff for the electricity generated from RES is a separate transmission tariff that covers the
costs of the Renewable Energy Fund for which certificates of origin are issued, which can be then
updated during regular annual reviews. This tariff is the ratio of the total operating costs of the
Renewable Energy Fund to estimated consumption of the electricity that will be charged by the
market operator.
The costs of purchasing electricity generated from renewable sources during 2017 were EUR 6.34
million.
In the framework of the Rule on Support Scheme, ERO has also addressed electricity generated by
micro-generators (self-consumption generators) that can "push" the surplus of generated electricity
on the network and obtain the electricity needed.
It should be noted that 2017 marked an increase of investors' interest in electricity generated from
RES. Based on the data, until 2017, about EUR 84.2 million were invested in the water generating
capacities, about EUR 17 million were invested in the wind generating capacities and about EUR 1
million were invested in solar panels generating capacities. The total investment made by the end of
2017 amounted to EUR 102 million, while potentials expected to be realized based on
authorizations issued by ERO are around EUR 341 million, which are expected to be invested by
2020. These capital investments are mostly financed by bank loans covering up to 70% of
investment costs, while the rest is funded by the company's own capital (equity).
39
ANNUAL REPORT 2017
2.10 TSO certification process
ERO has initiated the process of certifying the Transmission System Operator (TSO) - KOSTT.
Certification of TSOs is required in order to ensure that the TSO performs its functions
independently from any other business in the energy sector and consequently ensure that the TSO
as such offers free and non-discriminatory access to the transmission network for all stakeholders
operating in the sector, thus ensuring a free functioning of electricity market in the country.
Certification is a process on which ERO confirms that there is sufficient separation of control, on
one hand over the TSO and over generation and/or supply on the other, and that the control of the
energy companies is in compliance with relevant provisions on unbundling. To this end, on 16 June
2017, representatives of Transmission, System and Market Operator-KOSTT JSC submitted to ERO
the application for Certification of KOSTT. ERO has requested that the application is supplemented
with some additional information that is needed to define ownership of TSO’s assets and other
relevant issues for this process. As a requirement deriving from the EU directives, the certification
process is being monitored and coordinated with the Energy Community Secretariat and the
decision will be taken as soon as the Board is complete.
2.11 Market monitoring
In accordance with its legal powers, ERO is responsible for monitoring the operation of electricity
markets in order to ensure their efficient functioning and identify the necessary corrective actions.
During 2017, ERO has monitored the electricity import and export carried out by KESCO and KOSTT
in the framework of their daily activities to balance Kosovo's energy system, even by conducting
visits to responsible parties. The purpose of these visits was for ERO to ensure that all energy
procurement procedures under the applicable legislation are being applied.
According to legislation in force, operators are obliged to ensure the electricity for covering losses
and other auxiliary services in the competitive market. Operators are able to ensure most of this
electricity from domestic production, and when the demand for energy from domestic production is
not met, this electricity is then ensured from imports.
During this monitoring period, KOSTT has imported to cover electricity for transmission losses and
unbilled electricity in the north of the country, while KESCO has imported for consumers with
universal service right, customers with unregulated prices, and to cover distribution losses, and has
exported for electricity surpluses.
The monitoring carried out focuses on these areas:
a) Total import and export, and accompanying problems;
b) Number of traders' participants in each tender;
c) Quantity of unrealized imports/exports.
Given that this was a new process for KOSTT (a process previously carried out by KESCO), certainly
there were initial difficulties and problems. Difficulties were mainly related to traders’ low interest
to offer very small quantities of electricity required by KOSTT because KOSTT ensures part of its
demand from local production according to priorities provided in the Guideline for Liberalization of
40
ANNUAL REPORT 2017
Electricity Market in Kosovo, which has also resulted in higher import prices compared to imports
realized by KESCO for the same period, and which stabilized over the time.
While trading electricity, KOSTT and KESCO have fulfilled the criteria of electricity procurement
procedure such as: the most economically advantageous tender, the sufficient number of traders
participating in auctions, the timing of trading, communication with participating parties, etc.
As mentioned in the paragraphs above, initially there were difficulties in ensuring imported
electricity quantities, so that part of the required electricity remained un-contracted. For this
reason, the required quantity of imports to cover the KOSTT demands was 46,215 MWh of which
38,967 MWh were contracted, while 7,248 MWh was non-contracted electricity.
2.12 Monitoring the electricity outages
Based on the findings from the monitoring of electricity outages for October-November 2016, ERO
has prepared a report which, together with the Regulator's accompanying letter, in accordance with
the Rule on Administrative Measures and Fines, has been sent to KEDS to give them the opportunity
to comment and probably object the findings of the Report.
After reviewing and evaluating the responses/comments of KEDS JSC to the Regulator’s Report on
the inspection of planned outages, the Regulatory Board has ascertained that KEDS JSC has not in
any case or with any fact been able to object/argue the findings of the Regulatory Report, and, in its
meeting held on 27 February 2017, issued "Notice on the violations ascertained with respect to
planned outages carried out during October-November 2016 by KEDS JSC".
On 31.03.2017, in conformity with the legal provisions foreseen in the Law on Energy Regulator and
the Rule on Administrative Measures and Fines, the Regulatory Board has taken a decision on the
imposition of a EUR 45,000 fine on the Kosovo Energy Distribution Services (KEDS JSC) for violations
made during electricity outages.
2.13 ERO activities in the area of customer protection
In the light of its legal powers, ERO is responsible for settling complaints and disputes between
consumers and energy companies, system operators and energy enterprises, as well as between
two energy companies.
According to provisions of abovementioned rules, all customers have the right to file complaints
concerning the services provided by the supplier or system operator, who should then process the
complaint and issue a response within the legal deadline. After receiving the response, the
customer can address ERO for further review.
During 2017, the number of complaints filed with ERO is about 20.60% lower than the number of
complaints received during 2016. In 2017, 233 complaints were registered with ERO, while 281
complaints were received in 2016. Unsolved complaints are in the process of being completed with
the documentation and facts relevant to their resolution. In addition to registered and resolved
customer complaints, ERO has also provided support in delivering information, explanations, verbal
consultations, email and telephone to all electricity consumers.
41
ANNUAL REPORT 2017
The number of complaints received by customer categories is presented in the table below.
Tab. 2.20 Costumer complaints by category, 2017
Customer complaints by category Number Percentage [%]
Residential customer 214 91.85
Commercial customer 18 7.73
Industrial customer 1 0.43
Total 233 100.00
From the total number of complaints received, 186 complaints, or around 79.83%, have been
reviewed and resolved. Out of the total number of complaints resolved in 121 (66%) ERO has
decided in favour of the customers, whereas 63 (34%) customer complaints were rejected as
ungrounded. Based on legal competencies, in addition to official complaints received and
registered, ERO has returned 68 customer complaints to the supplier and the distribution system
operator due to deficiencies and errors in the documentation provided by parties. All these
complaints have been reviewed by the supplier and the distribution system operator and the
customers have been notified of improvements made.
Complaints resolved in 2017
66%
34%
Approved Rejected
Fig. 2.6 Status of resolved complaints, 2017
It should also be noted that ERO received 2 customer complaints from the Basic Court in Prishtina
under the justification that the courts lacks subject-matter jurisdiction to adjudicate the cases.
These complaints were reviewed by ERO and customers were instructed on further proceedings
based on provisions of Article 61 of the Law on Electricity and Rule on Resolution of Disputes and
Appeals in the Energy Sector.
The figure below shows the number of customer complaints according to their nature.
42
ANNUAL REPORT 2017
Customer complaint by its nature

Dispute of taxes for Dispute of bills for
Dispute of transfer of new connection, 5 thermal heating, 5
electricity debt, 7
Dispute of additional Other, 6

charges, 16
Dispute of Electricity Bill, 194
Fig. 2.7 Number of customer complaints by its nature
The following sections explain the nature of customer complaints lodged during 2017:
- Dispute of electricity bills, relates to customer complaints in cases of incorrect or irregular
readings, which is considered as giving an inaccurate overview of the actual state of
electricity consumption.
- Dispute of additional charges, relates to customer complaints to which the electricity
company has billed additional charges to the regular billing. These complaints result from
non-registration of electricity spending, as a result of the defect of any measuring system.
- Dispute of electricity debt, relates to customer complaints for issues caused by inaccurate
definition of the electricity debt not collected by the supplier in cases of property
transactions and for usurped property.
- Dispute of new connections, relates to customer complaints to which the energy company
denied the right for a new connection by the distribution system operator. In such cases of
complaints, in order to implement a new connection, customers were obliged by the
company to initially pay the debts in the old amount that existed before.
- Dispute of bills for thermal heating, relates to customer complaints regarding thermal
heating billing made by DH. "Termokos", which are related to the heating quality and billed
area.
The number of customer complaints, registered and resolved by ERO, by years, is presented in the
figure below.
43
ANNUAL REPORT 2017
Customer complaints by years

400
353
360
320
281
280 251
243 234 235 233
240 220
195 205
200 182 180 186
172
160 139
120
71
80
40
0
2010 2011 2012 2013 2014 2015 2016 2017
Registered Resolved
Fig. 2.8 Registered and resolved customer complaints 2010-2017
2.13.1 Decisions of the ERO Board in the area of customer protection
Based on the Regulation on Resolution of Complaints and Disputes in the Energy Sector, customers
and licensees are entitled to lodge complaints against decisions of CPD, as the first instance, to the
ERO Board as a second instance.
During 2017, the Board of ERO reviewed three customer complaints comprising a decision and two
recommendations issued by the Customer Protection Department, whereby they were approved.
During 2017, the supplier - KESCO filed five complaints to the ERO Board against first instance
decisions. The Board reviewed these complaints and rejected them as ungrounded.
2.13.2 Other activities related to customer protection
In addition to registered complaints, during 2017, ERO also held 1,115 meetings and 680 telephone
conversations, as well as maintained electronic communication, with customers, who addressed the
Office about various issues between customers and licensees in terms of energy supply. As part of
its communication with customers, ERO informed and guided them in terms of rules and
procedures, as well as their rights and obligations relating to energy supply.
During 2017, ERO received 15 customer complaints by mail, who insisted that ERO deal with their
complaints even though they should have addressed the licensees or courts. These complaints were
mainly related to unauthorized use of electricity and damages compensation. ERO responded in
writing to all such customers instructing them about further proceedings related to their
complaints.
Regarding the implementation of the Law No. 05/L-043 on Public Debt Forgiveness, during 2017
ERO received a considerable number of complaints by customers claiming that they were denied
legal rights by not being involved in energy (electricity and thermal energy) debt forgiveness lists.
ERO has addressed a large number of complaints about this issue and instructed customers about
their rights as set out in the aforementioned law.
44
ANNUAL REPORT 2017
ERO has cooperated closely with the Customer Protection Department under the Ministry of Trade
and Industry, whereby during this reporting period received several customer complaints from this
institution. These complaints have been received and reviewed by ERO in accordance with legal
provisions, and parties were instructed regarding the procedures to be followed due to the lack of
ERO's legal competence for review.
During 2017, a number of decisions of ERO were appealed by unsatisfied parties to the Basic Court
in Prishtina - Department of Administrative Matters, requesting legality assessment of
administrative decisions. ERO during 2017, based on decisions of the Basic Court in Prishtina, has
prepared 17 responses to claims against KEC, KEDS, KESCO and customers as claimants to the
decisions of ERO Board. Also, during this reporting year, ERO was involved in 48 court sessions in
the Basic Court in Prishtina as a respondent.
It is important to note that, so far, no decision of ERO i related to customer complaints in
administrative procedure has been returned for review due to legality non-compliance by the
administrative body; all these charges against decisions of ERO were rejected as ungrounded and
the challenged decisions were upheld.
45
ANNUAL REPORT 2017
3 COOPERATION WITH OTHER PARTIES AND TRANSPARENCY
3.1 Reporting and cooperation with the Assembly of Kosovo
During 2017, as in previous years, ERO continued to report to the Assembly through relevant
assembly committees for important events in the energy sector whenever requested by the
Committee.
In March 2017, at the request of the Committee for Economic Development, Infrastructure, Trade
and Industry, ERO has presented the Tariff Structure Proposal and the impacts that this structure
will have on customers of all categories. During the meeting, the members of the Committee
requested by ERO representatives to be presented with some simulations of customer invoices
from different customer groups in order to get more information on the impacts that these groups
may have on the changes in proposed tariff structure.
In December 2017, the Committee on Economic Development, Infrastructure, Trade, Industry and
Regional Development was informed by ERO regarding the energy situation in the country,
respectively regarding the delays of expropriation in mining areas and the obligation to implement
decisions of the Court of Appeals regarding the energy supplied to the four northern municipalities
of the country.
Also, during December, ERO reported before the Committee on Human Rights, Gender Equality,
Missing Persons and Petitions regarding the energy supplied to the four northern municipalities of
the country.
3.2 Cooperation with other stakeholders and partnership activities
During 2017, ERO had close cooperation and partnership with MED, other institutions of the
Republic of Kosovo, the licensees, the Energy Community Secretariat and the international
community operating in Kosovo on various issues of the energy sector.
3.2.1 Cooperation with the Ministry of Economic Development
ERO has actively participated in the working groups established by the MED on the preparation of
the Energy Strategy 2017-2026, the National Action Plan on Energy Efficiency, as well as various
administrative instructions.
Moreover, ERO has assisted MED in filling out the various questionnaires required by international
institutions. Moreover, during 2017 they held several meetings on problems of the sector, the
perspective of the electricity market and the forms of cooperation.
46
ANNUAL REPORT 2017
3.2.2 Cooperation with the Kosovo Competition Authority
During 2017, ERO had two meetings with the Kosovo Competition Authority discussing ways of co-
operation, within the framework of their legal functions, to exchange information and address
competition-related problems.
3.2.3 Participation of ERO at meetings of the National Council for Economic

Development
ERO participated in several meetings of the National Council for Economic Development, organized
by the Ministry of Trade and Industry, where issues raised by the Kosovo Chamber of Commerce
and other chambers operating in Kosovo related to electricity tariffs, connections to electricity
networks and power supply were addressed.
3.2.4 Cooperation and partnership with international institutions
During 2017, ERO has collaborated with NARUC - the National Agency of Regulatory Utilities
Commissions in the "Southeast Europe Natural Gas Transmission and Distribution Grid Codes
Project", with the financial support of the United States Agency for International Development
(USAID)
This project is related to the regional co-operation of South-eastern Europe regulators in the field of
gas co-organized by NARUC and ERRA (Energy Regulators Regional Association) seated in Budapest.
The aims is that through this cooperation ERO will be in step with development of regulations for
technical codes such as those of transmission and distribution network that reinforce the
development of secondary legislation at the moment of gas infrastructure installation planned to
include Kosovo according to the ALGOKAP project.
With the help of USAID and NARUC, ERO has committed and signed a Letter of Intent to create a
Tool for comparing the electricity price. With this, ERO aims to enable customers to a credible
source in an open market to compare the prices that will be offered by electricity suppliers who will
operate in the Kosovo market.
3.3 ERO's participation in international activities
The purpose of participation in international activities is considered by ERO as one of the key
elements that serves institutional strengthening, increase of knowledge and experience of its staff.
The main activities and the active participation in international organizations, international
conferences, roundtables or multilateral and bilateral meetings are presented below.
3.3.1 Participation in the Energy Community Regulatory Board (ECRB)
The Energy Community (EC) is an international organization established by international treaty in

October 2005 in Athens, attended by the European Union countries, the South East European
region and the Black Sea. EC activities during 2017 were focused towards achieving common goals:
47
ANNUAL REPORT 2017
"acquis communautaire" implementation, develop the harmonized regulatory framework at

regional level and liberalize and integrate markets in the sector of electricity and natural gas.
EC Contracting Parties are: Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro,
Serbia, Moldova, Ukraine and Georgia. European Union member states are participants, whereas
Norway, Turkey and Armenia have the observer status.
Fig. 3.1 Member states of the Energy Community of South East Europe
Energy Community Treaty (ECT) is a key strategic component of the European Union (EU) for
Southeast Europe and an effective pre-accession tool, which is aimed at expanding benefits from
the Regional Energy Market before the regional countries become EU members.
The main institutions of the EC are: Ministerial Council (MC), Permanent High-Level Group (PHLG),
Energy Community Regulatory Board (ECRB), the EC Secretariat with the seat in Vienna and four
advisory forums: on electricity, natural gas, social issues and oil.
The Energy Community Regulatory Board is an institution established under Article 58 of the ECT
SEE, comprised of regulatory authorities of the contracting parties, participants and observers. ECRB
plays the role of a coordinating body of the regulatory authorities for harmonization of the
regulatory framework, exchange of knowledge and development of best practices on
implementation of the treaty.
Based on the provisions of the EC Treaty, ECRB has the responsibility to:
o advise to the Ministerial Council and PHLG on statutory, technical and regulatory issues;
o issue recommendations to parties, in line with the provisions of the Treaty, on any cross-
border disputes, etc.;
o Undertake measures against parties, if authorized by the MC;
48
ANNUAL REPORT 2017
o Facilitate cooperation and coordination among regulatory authorities;

o Give recommendations and draft reports about the functioning of energy markets; and
o Seeks fulfilment of the parties’ obligations under ECT.
With the purpose of fulfilling its responsibilities, ECRB is organized in working groups that perform
activities in their respective fields. ECRB is chaired by the President, annually elected by the
representatives of national regulators, and the deputy who is delegated by the European
Commission.
Crosscutting
-
ECRB board
ACER Representative
International
co-operation
Customers and
Electricity Natural gas
Retail market
Fig. 3.2 Structure of Energy Community Regulatory Board
According to the obligations towards EC, ERO has nominated its members in ECRB and in every
working group, participates actively in the Board activities and respective working groups. Working
groups and respective activities are as follows:
3.3.1.1 Working Group on Electricity
During 2017, this working group held regular meetings and activities which were also attended by
the representative of ERO. For more efficient work, this group has also established its subgroups
(Task Forces –TF), description and activities of which are presented below:
o TF1 - Wholesale electricity market opening - In order to support the effective opening up of
the market, this subgroup is focused on regulatory support activities for capacity allocation
and integration of the "one-day-ahead" market in South East Europe. Also, a number of
activities have been related to the provision of co-ordinated inputs for "one-day-ahead"
integration projects in South-East Europe under the WB 6 Initiative (Western Balkans 6).
o TF2 - Balancing the integrated market - Implementation of balancing mechanisms based on
the market and interconnection of national balancing markets into regional market will
promote transparent formation of balancing pricing, will promote competition in
purchasing of balancing services and will have positive impact on the stability of
transmission network. This process has received an additional boost from the WB 6
Initiative.
49
ANNUAL REPORT 2017
In this respect, TF-2 subgroup activities have resulted in: finalization of the Research for
existing models of imbalance calculation in EC and provision of regulatory inputs for
regional balancing projects of the WB 6 Initiative.
o TF3 - Wholesale electricity market monitoring:
Market Monitoring is a key component of regulatory responsibilities, which is also defined
in "acquis communautaire", full disclosure of market performance and development
prospects enables the promotion of competition, customer protection, energy efficiency,
investment and safety of supply.
In this context, the activities are focused on: implementation of the Market Monitoring
Guidelines and the Monitoring Report of the Electricity Wholesale Market in the
Contracting Parties.
3.3.1.2 Gas Working Group (GWG)
This working group focuses its activities on issues of regulating the natural gas sector, harmonizing
the regulatory framework at regional level and other issues related to the development of natural
gas infrastructure in the SEE region. For efficiency purposes and in favour of handling of specific
issues, specific subgroups are created ("Task Force"-TF).
o TF1 - Gas transmission tariffs
Within this subgroup, activities were initially focused in preparing regulators of contracting parties
to implement the Grid Code for transmission tariffs, through obtaining expertise and experience
from the European Union. Existing tariff levels and structures between EU member states and EC
contracting parties were also analysed in terms of compliance with the Grid Code on Gas
Transmission Tariffs.
o TF2 - Regulatory treatment of losses in the network
In the following part of the Research on the current status of treating losses in the gas
infrastructure of regional countries, prepared in 2016, activities in 2017 continued in: the
methodology of assessing losses and data measuring and verification; identification of the main
causes of losses in network; identification of incentive measures to reduce losses; and analysing the
effects of incentive measures applied to reduce the losses.
3.3.1.3 Working Group for Customers and Retail Markets

Within the ECRB, there is a customer working group with its own sub-groups, which deals with
customer-related activities, tariffs and retail prices, contractual relations between suppliers and
customers, and the quality of energy supply and regulation of the voltage quality.
o TF1 - Customer awareness
The activities within this subgroup included customer information and awareness rising regarding
their rights in the context of a fully liberalized market. Furthermore, the use of information activities
and their effects in the Contracting Parties was assessed. This assessment has served to provide
further recommendations and guidance on improving customer protection and preparing the most
appropriate means of communicating with customers in the future.
50
ANNUAL REPORT 2017
o TF2 - Retail Market Monitoring

Market monitoring is a fundamental component of regulatory responsibilities; complete
reporting on market performance and development prospects allows regulators to create an
effective framework that balances market participants' needs and promotes competition,
customer protection, energy efficiency, investment and safety of supply.
In this regard, the activities of this sub-group include: drafting a Monitoring Report on the
functioning of retail electricity markets and natural gas in the EC; and providing inputs to
support ACER's activities in monitoring the electricity and gas retail markets.
o TF3 - Customer protection in a closed distribution system
Given the fact that such closed distribution systems can serve, in addition to large
industrial/commercial customers, to supply small commercial and residential customers, equal
and transparent rules should be established for customer protection. In this context, the
activities are focused on: comparative research of regulatory frameworks for closed systems in
the EU and the EC with the aim of identifying the best-applied practices.
 TF4 - Quality of gas supply
According to the Directive 2009/73/EC, regulatory authorities should approve requirements

regarding supply quality. Based on the electricity sector experiences, in 2017, activities focused
on analysing existing standards and indicators, including similarities and changes compared to
the electricity sector. This activity also involved the preparation of an analytical document.
3.3.2 Participation of ERO in meetings organized by international institutions
ERO is participating in some international institutions and actively participates in meetings held
within these institutions. Most of them have a determining role in many activities in the energy
sector at regional and national level.
The meetings and roundtables abroad attended by ERO representatives are listed below.
 08 February 2017 - 40th meeting of the ECRB Electricity Group, organized by the Energy
Community Secretariat, Vienna, Austria;
 09 February 2017 - 38th meeting of the ECRB Gas Working Group, organized by the Energy
 20-24 February 2017 – Study visit to Zagreb "Development of Capex monitoring rule"
funded by USAID Repower;
 24 March 2017 – Meeting of legal experts of the parties to the "Energy Community Treaty",
organized by the Energy Community Treaty, Vienna Austria;
 28 March 2017 – Meeting on the topic: Gas Activities in the Energy Community 2020,
organized by the Energy Community Secretariat Vienna, Austria;
 11-12 May 2017 – Participation in the workshop "A Regional Strategy for Sustainable
Hydropower in the Western Balkans", Tirana;
51
ANNUAL REPORT 2017
 06-09 June 2017 – Study visit to Finland "The needs for development in Termokos and the
best practices for DH in Finland" - organized by the European Commission consulting
office in Kosovo, funded by TYEX;
 06-07 June 2017 – Workshop on Harmonization and Standardization of Natural Gas

Transmission Grid Codes for Southeast Europe Regulators organized by USAID NARUC and
ERRA in Budapest, Hungary;
 14 June 2017 - 37th meeting of the Customer and Retail Market Working Group within ECRB,
organized by the Energy Community, Vienna, Austria;
 19-20 June 2017 - Energy Security Seminar "Contribution of EU's Neighbouring South-
Eastern Countries to Regional Energy Security: Challenges and Opportunities for
Cooperation", organized by Ministry of Foreign Affairs and Ministry of Energy of Romania
in cooperation with RACVIAC - Centre for Security Cooperation, Rakitje, Croatia;
 13 September 2017 - Workshop on "Harmonisation of trade and supply licenses" organized

by the Energy Community Secretariat, Vienna, Austria;
 29 September - 02 October 2017 – Training “Risk Management and Internal Control System
at Public Institutions”, FLSA in Ohrid Macedonia;
 10-11 October 2017 – First meeting of the PECI/PMI electricity group and the Workshop -
10-Year Network Development Plan, organized by the Energy Community Secretariat,
Vienna, Austria;
 24 October 2017 - 42nd meeting of the ECRB Electricity Group, organized by the Energy
 25 -26 October 2017 – Workshop "Price Comparison Tool", organized by NARUC, Sarajevo,
Bosnia and Herzegovina;
 07 November 2017 - 38th meeting of the Customer and Retail Market Working Group within
ECRB, organized by the Energy Community Secretariat, Vienna, Austria;
 09 November 2017 – Workshop on Transparency, ENTSOG and EC, organized by the Energy
Secretariat, Vienna, Austria;
 17 November 2017 – Workshop on cooperation in the Kosovo - Albania energy market,

Tirana, Albania;
 21-22 November 2017 – study visit to Zagreb at the Croatian Market Operator HROTE and
Croatian Energy Regulator HERA
 21-22 November 2017 – Study visit to AIB, and to the Flemish Regulator, Brussels, Belgium;
 07 December 2017 – Training related to "Energy Market and Energy Trade", Vienna,
Austria;
 07-08 December 2017 - Workshop "Technical Codes of Gas Distribution and Transmission -
USAID Project" held in Budapest, Hungary, organized by: United States Agency for
International Development (USAID), Energy Regulators Regional Association (ERRA), US
National Association of Regulatory Utility Commissioners (NARUC);
52
ANNUAL REPORT 2017
 12 December 2017 – Participation in the workshop "A Regional Strategy for Sustainable
Hydropower in the Western Balkans", Skopje, Macedonia;
 12 December 2017 – Meeting of PECI/PMI Selection Group: Gas Group SKE, Vienna, Austria.
3.4 Transparency and public involvement in regulatory processes
Through the Communication Strategy approved by the Board of ERO, has been given a special
importance and priority to the general public communication. ERO's transparency is provided by the
publication of documents and information related to the level of service of participants in the
energy sector.
All the rules that have been amended with the amendment of the third legislative energy package
have been put into public discussion. It is worth mentioning that the entire process of amending the
rules has been subject to publication of the drafts and then received comments from stakeholders
starting from the Energy Community Secretariat, licensees, customers, etc. Notifications of public
review processes, in addition to the web pages, are also published as announcements in daily
newspapers.
The process of changing the electricity tariff structure is preceded by the publication of the
documentation and involvement of all stakeholders, either through written comments, hearings
and special meetings, with the Parliamentary Committee for Economic Development, Chamber of
Commerce, other NGOs as well as communications with media and customers.
Another process that has been developed in full transparency and with the involvement of other
parties has been the initiation of the opening of electricity market, which started with the
publication of the "Guideline on Liberalization of Electricity Market" for commenting by the parties
and then has been approved by the Board in an open public meeting.
ERO’s website remains one the main sources of information and ensuring transparency, where all
ERO activity announcements are published, including Board meetings, all Board decisions, registers
of applicants for obtaining authorizations, register of licenses for energy activities, tariff review
processes, primary and secondary legislation and many important pieces of information and
documents for the energy sector. ERO's website also has an email, through which it receives
continuous questions and comments from customers, potential investors, foreign and non-
governmental organizations, media etc.
With the purpose of further enhancing public's involvement and information, following the trend of
social networks use by the public of Kosovo, during 2017, ERO also created its own Facebook page
whereby published all ERO activity reports.
ERO's relations to the media are very correct, the ERO staffs respond to questions and explanations
that journalists raise on sector regulation matters. In order to gather more information about sector
developments, but also have the best picture of customer impressions on energy services, ERO
continuously monitors the means of information and continuously strives to increase transparency
and give accurate information on regulatory issues.
53
ANNUAL REPORT 2017
4 FINANCIAL REPORTING FOR ERO
4.1 ERO budget
ERO is funded by its own source revenues, in accordance with the Law on the Energy Regulator,
Chapter 4, namely taxes collected by licensed enterprises and operators in the energy sector.
Revenues
All of ERO’s collected revenues were deposited in accordance with Article 64 of the Law on Public
Financial Management and Accountability in the official bank account established by the Director
General of the Treasury.
During 2017, ERO collected revenues in the amount of € 1,412,853.40. Considering that the total
budget amount spent by ERO in 2017 is 592,128.02 €, the unspent revenues in the amount of
€820,725.38, pursuant to Article 23 of the Law on the Energy Regulator, will be transferred to the
Budget of the Republic of Kosovo.
Tab. 4.1 Revenues
Description Amount
Own Source Revenues 2017 1,412,853.40 €
Expenditures 2017 (592,128.02) €
Revenues transferred to the Budget of the Republic of Kosovo 820,725.38 €
Budget
With the Law on the Budget of the Republic of Kosovo No. 05/L-125 for year 2017, the Assembly of
Kosovo approved the ERO budget in the amount of €768,316, which is entirely allocated as a
government grant, although according to the Law on the Energy Regulator, ERO is financed from its
own source revenues and only in cases where such revenues are insufficient, ERO may use budget
allocations in the form of government grants. According to economic categories, the budget of ERO
is as follows:
Tab. 4.2 Budget at the beginning of the year
Description Budget
Wages and salaries 476,184.00 €
Goods and Services 199,332.00 €
Utilities 22,000.00 €
Capital expenditures 70,800.00 €
Total 768,316.00 €
With the decision of the Government of the Republic of Kosovo (Decision No. 01/21) and Law no.
06/L-002, ERO's budget has been reduced by € 83,800.00, namely €25,000.00 in the economic
category "wages and salaries" and € 58,800.00 in the economic category "capital expenditures".
Expressed in percentage, ERO's budget has been reduced by 10.90%.
54
ANNUAL REPORT 2017
Tab. 4.3. Final budget

Description Budget
Total 684,516.00 €
Budget Expenditures
To finance the activities carried out in 2017, ERO has spent € 592,128.02.
According to the economic classification, ERO expenditures are as follows:
Tab. 4.4 Expenditures by economic categories
Description Amount
Total 592,128.02 €
Budget execution in proportion to the remaining budget after cuts is 86.50%. The incomplete
budget execution mainly occurred due to delays in procurement procedures by the CPA.
The budget execution rate by economic categories, expressed in percentage, is displayed in table
4.5.
Tab. 4.5 Budget execution, expressed in percentage
Description Budget Expenditures Change Execution in %

Wages and salaries 451,184.00 € 416,031.90 € 35,152.10 € 92.21%
Goods and Services 199,332.00 € 149,256.51 € 50,075.49 € 74.88%
Utilities 22,000.00 € 18,194.81 € 3,805.19 € 82.70%
Capital expenditures 12,000.00 € 8,644.80 € 3,355.20 € 72.04%
Total 684,516.00 € 592,128.02 € 92,387.98 € 86.50%
55
ANNUAL REPORT 2017
Euro* 1000 Budget/expenditures for 2017

€ 500 100 %
€ 450 90 %
92 .21 %
€ 400 80 %
82 .70 %
€ 350
74 .88 % 70 %
72 .04 %
€ 300 60 %
€ 250 50 %
€ 200 40 %
€ 150 30 %
€ 100 20 %
€ 50 10 %
€- 0%
Wages and salaries Goods and Services Utilities Capital expenditures
Budget Expenditures Execution in %
Fig. 4.1 Budget and Expenditures for 2017
The following tables display expenditures by economic codes.

Tab. 4.6 Wages and Salaries
Wages and salaries Shuma
Net wages 346,715.00 €
Personal Income Tax 29,693.70 €
Employer's pension contribution 19,811.60 €
Pension Contribution of Employees 19,811.60 €
Total 416,031.90 €
In this category, a total of € 416,031.90 is spent and the all amount was spent on regular salaries of
ERO staff. With the exception of allowances (per diems) for official trips abroad, which are paid by
goods and services category, ERO does not pay other allowances.
56
ANNUAL REPORT 2017
Tab. 4.7 Goods and Services

Goods and Services Amount
Expenditures for official travels abroad 6,470.17 €
Allowances for official travels abroad 15,600.05 €
Accommodation for official travels abroad 4,986.26 €
Other expenditures for official travels abroad 1,365.78 €
Internet Expenditures 681.48 €
Expenditures for Mobile Telephony 11,721.43 €
Postal expenditures 159.20 €
Education and training services 1,540.00 €
Different intellectual and advisory services 4,409.75 €
Printing services 702.98 €
Other contracting services 520.00 €
Membership expenditures 4,000.00 €
Furniture 2,150.00 €
Computer - €
Hardware for IT - €
Other equipment - €
Office supplies 6,945.37 €
Beverage supply 3,309.89 €
Generator fuels 98.34 €
Vehicle fuel 3,221.61 €
Vehicle registration 430.00 €
Vehicle insurance 1,400.87 €
Municipal tax for vehicle registration 40.00 €
Security of premises 7,015.13 €
Vehicle maintenance and repair 1,498.30 €
Building maintenance 4,705.00 €
Maintenance of information technology 4,994.00 €
Maintenance of furnitures and equipment 907.14 €
Building rent 49,140.00 €
Advertisements and vacancies 984.00 €
Official dinners 4,141.90 €
Rental tax payment 6,117.86 €
Total 149,256.51 €
As it can be seen from Table 4.7, the funds spent for this category is € 149,256.51. The budget
expenditures based on the activities are as follows:
57
ANNUAL REPORT 2017
Tab. 4.8 Expenditures by activities

Expenditures by activities Amount
Travel expenditures 28,422.26 €
Telecommunication Services 12,562.11 €
Expenditures for services 11,172.73 €
Purchase of furniture and equipment 2,150.00 €
Other purchases - goods and services 10,255.26 €
Derivatives and fuels 3,319.95 €
Registration and insurance services 8,886.00 €
Maintenance 12,104.44 €
Rent 55,257.86 €
Marketing Expenditures 984.00 €
Representation expenditures 4,141.90 €
Total 149,256.51 €
Tab. 4.9 Utilities

Utilities Amount
Electricity 16,644.30 €
Water 501.05 €
Telephone expenditures 1,049.46 €
Total 18,194.81 €
The amount of funds spent on the category of utilities is € 18,194.81. Compared to the previous
year, approximately the same amount of budget was spent in 2017.
Tab. 4.10 Capital Expenditures
Capital expenditures Amount

Software 8,644.80 €
Total 8,644.80 €
58
ANNUAL REPORT 2017
59
ANNUAL REPORT 2017
5 ELECTRICITY SECTOR
5.1 Characteristics of the electricity sector
Kosovo has preconditions for the production of electricity, not only to cover its own needs but also
for export. Kosovo's power system is designed to produce electricity based mainly on lignite but not
for maximum load coverage and system balancing. Therefore it remains a major challenge of
balancing the system for all participants in the sector.
The electricity sector consists of generation, transmission, distribution and supply to customers.
TO • Organization and development of EE market
TRANSMISSION KOSTT • Transmission of electricity

TSO • Operation and maintenance of the system
• System balancing
• Operation and maintenance of the DS

DISTRIBUTION KEDS DSO • Management of generators connected to the DS
• Supply to end customers

KESCO USS - Customers with US rights
- Customers with unregulated prices
SUPPLY
SUPPLIERS • Supply to end customers
TRADERS • Trading of electricity
KEC • Public generators
PRODUCTION OTHER GENERATORS • Public and private generators
RES • Private generators
Fig. 5.1 Organization of the electricity sector

Kosovo has an installed generating capacity of 1,560 MW, however, operational capacity is
considered around 1,038 MW. The majority of production capacity is composed of Thermal Power
Plants (TPP) with 92.5% lignite, while the rest consists of hydropower, solar panels and wind power
plants. These capacities provide preconditions, not only to cover consumption but also export,
however due to the ageing of power plants and insufficient flexibility to adapt to consumption at
different periods, particularly during peak hours and/or at night, import or export is required for
balancing the system. Additionally, other hydro-generation capacities (HCs) and RESs, besides being
small and/or lacking accumulative basins, are not able to provide system balancing services.
60
ANNUAL REPORT 2017
The figure below shows the production and import of electricity over the last ten years.
GWh Production, import and consumption of electricity over the years

7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
TPP Kosova A TPP Kosova B HC and RES Import Consumption
Fig. 5.2 Electricity Production, Import and Demand 2008 - 2017

For different reasons it may so happen that there will be export and import in the same period, or
even within the same hour. This phenomenon may occurs in different cases, e.g. when export is
contracted while in the meantime a generating unit fails, or when import has been contracted but
the generating unit has returned to operation earlier than predicted prediction, or in cases when
there is a change of production. Sometimes this is also occurs due to the huge change in demand,
for example, when changing atmospheric conditions - rise or fall of temperatures.
The introduction of RES generators increases the operating capacity of generation, but in most
cases, they are unpredictable and are in dispatch priority regime, therefore they have no impact on
improving the energy system balancing, and sometimes even increase imbalances. With regard to
investments in RES, the international energy institutions years ago have considered necessary that
for each installed MW of RES's to have the same conventional generating reserve installed to cover
demand in the event of a change in production or failure of the generators from RES.
5.1.1 Electricity Market
Market liberalization is the direction that all the countries of the region, including Kosovo, are
following, which ultimately results in increased competition, lowering prices and improving services
for customers.
The electricity market in Kosovo includes bilateral trading of electricity and trading to balance the
electricity system.
Kosovo is a signatory of the Energy Community Treaty, which opens cooperation opportunities with
countries of the region, but also creates obligations deriving from Treaty requirements and Energy
Community requirements expressed through packages of EU energy legislation. These packages
61
ANNUAL REPORT 2017
include regulations, directives and guidelines for operation of energy systems in the Energy
Community.
The energy sector reform, which in Kosovo dates back to 2004, when energy laws were developed
and ERO was established, is a pre-condition for successful market liberalization. The process
continued with the unbundling of vertically integrated company - KEC, and the establishment of the
Transmission System and Market Operator - KOSTT in 2006. KOSTT maintains the function of the
Transmission System Operator and the Market Operator and responds to the Assembly of Kosovo
under the new 2016 Legislation. Further unbundling has continued with the separation of
distribution and supply from KEC, and then, distribution and supply have been privatized in May
2013. Since 2015, the legal unbundling of the distribution from supply has occurred, resulting in the
establishment of two companies KEDS - Distribution System Operator and KESCO - Electricity
Supplier.
To support market liberalization and increased competition in the electricity sector, in January
2017, ERO approved the document "Guidelines on liberalization of the electricity market in
Kosovo". This guideline defines the manner, conditions and time of market liberalization, in the
activity of production and supply of electricity.
Based on the Guideline, electricity producers are obliged to provide their capacities in a
transparent, non-discriminatory and market-based manner to customers in the wholesale and retail
markets, including those with public service obligations.
Electricity losses during 2017 have commenced to be purchased by the Transmission System
Operator and the Distribution System Operator in the competitive electricity market. Based on the
document "Description of wholesale energy treatment in the transitional phase", the energy
needed to cover losses in the transmission and distribution network is provided proportionally by
the remaining energy from KEC after energy allocation for universal service. If energy received from
KEK is insufficient to cover losses, the remaining part of required energy is provided from imports.
Since October 2016, Ferronikeli is being supplied with electricity at unregulated prices. However, in
February 2017, there were barriers to supply due to some limitations in the transmission system in
Bulgaria, so Ferronikeli was supplied at regulated prices, and thereafter continued with supply at
unregulated prices.
In 2017 there was an increase in demand for electricity, while participation by different categories
of consumption, including system losses, is presented in the figure below.
62
ANNUAL REPORT 2017
Participation of electricity consumption and losses against demand for 2017
6.76%
1.60%
10.30%
Losses
63.81% 27.83%
4.67%
10 .79%
2.07%
Regulated customers Ferronikeli Trepça+Sharrcemi

Losses in transmission Technical losses Commercial losses
Losses in the north
Fig. 5.3 Participation of regulated, unregulated consumption and losses against demand, 2017
From the system’s total demand of 5,686 GWh for 2017, consumption with the right of universal
service participates with 63.8%, consumption with unregulated prices 8.36% and overall system
losses with 27.83%.
In the first three quarters of 2017, Kosovo was a net exporter of electricity, while in the fourth
quarter was a net importer of electricity. The impact of the fourth quarter was large and turned
Kosovo from a net exporter to a net importer, where the total net import was 362 GWh. Among
other things, this situation has occurred due to the coal supply problem of thermal power plants,
delays in the expropriation of mining areas, described below at the part of energy production.
Based on the Law on Electricity, if the intentions of the universal service cannot be achieved under
market conditions, the Regulator may regulate the electricity prices of end-buyers that enjoy the
right to supply within the universal service, provided that it is in accordance with the conditions set
forth in this Law.
The safety of electricity supply, as the sector’s main goal, inter alia depends on the generation
capacities and the transmission and distribution capacities. Since the TPP Kosova A is considerably
old, over 40 years, and TPP Kosova B also has a significant operating period, new investments are
needed, both in basic energy as well as in RES. ERO has issued a significant number of
authorizations for construction of new power capacities from RES.
On 20th of December 2017, the Government of the Republic of Kosovo has signed the commercial
agreement with the company "Contour Global" for construction of the new thermal power plant
Kosova e Re (New Kosovo). The construction of this thermal power plant is expected to ensure
Kosovo’s energy independence, and is considered as a replacement of TPP Kosova A, which should
be decommissioned with the introduction of TPP Kosova e Re.
The installed capacity of the TPP Kosova e Re will be 500 MW, whereas it will have an output of
about 450 MWh/h. The thermal power plant also has the possibility of supporting cogeneration up
63
ANNUAL REPORT 2017
to 10% of its capacity. The parameters of the Kosovo e Re thermal power plant will be in accordance
with EU standards and criteria for environmental pollution limitations.
The technical condition of the energy sector has improved during the recent years. The signed
agreement for construction of the TPP Kosova e Re also contributes to this, but investments in
other sectors are also needed for the regular operation and safe electricity supply of the country.
5.2 Lignite production and consumption
Kosovo has large reserves of lignite which ensure long-term electricity generation; however, the
problem is the impact on environment due to emission of greenhouse gas and other polluters.
About 92.5% of the total installed capacities of electricity generation is comprised by power plants
that operate with lignite as the primary energy source.
Lignite production in 2017 was 7.57 million tons, whereas the consumption 7.65 million tons, which
quantities are smaller compared to 2016 due to inability to expand surface mining for coal
exploitation. Lignite production and consumption for 2017 has been presented by months in Table
5.1.
Tab. 5.1 Lignite production and consumption in 2017
Lignite production/consumption Total Jan. Feb. March April May June July August Sept. Oct. Nov. Dec.
Lignite production (t*1000) 7,575 682 623 799 623 710 619 501 655 643 672 474 572
Lignite consumption (t*1000) 7,645 859 601 860 590 678 763 530 552 664 727 368 451
Lignite consumption in the market (t*1000)
183.3 14.7 20.1 20.7 20.1 10.6 18.6 22.4 4.9 0.8 20.0 15.3 14.9
The figure below presents the lignite production and consumption during 2008 – 2017.
t*1000 Lignite production and consumption 2008 - 2017

10,000
8,904
9 , 000 8,520
8,269 8 ,287 8,219 8 ,143
7,993 8 ,801
8,000 7,279 7,645
8,212 8 ,219 8 ,241
7,958 8,028 7,118
7 ,872 7,575
7,000
7,742 7 ,204
6,000
5,000
4 , 000
3 , 000
2 , 000
1 , 000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Lignite production Lignite consumption from TPP
Fig. 5.4 Lignite production and consumption during 2008 – 2017
64
ANNUAL REPORT 2017
5.3 Electricity generation
5.3.1 Electricity generation capacities
Electricity generation capacities are:

- Power Plants;
- Hydro Power Plants; and
- Renewable Energy Sources (small hydro power plants, wind power plants and photovoltaic
panels).
Capacity of generating units has been presented in the table below by type, material, installed
capacity and operational capacity, minimum and maximum generating limits and year of
commissioning.
Tab. 5.2 Generation capacities in Kosovo’s electricity system
Unit capacity (MW)
Generating unit Commissioning
Installed Net Min/max
A1 65 Not operational 1962
A2 125 Not operational 1964
A3 200 144 100-130 1970
A4 200 144 100-130 1974
A5 210 144 100-135 1975
TPP Kosova A 800 432
B1 339 264 180-260 1983
B2 339 264 180-260 1984
TPP Kosova B 678 528
HPP Ujmani 35.00 32.00 1983
HPP Lumbardhi 8.08 8.00 (1957) 2006
HPP Dikanci 4.02 3.34 (1957) 2013
HPP Radavci 1.00 0.90 (1934) 2010
HPP Burimi 0.95 0.85 (1948) 2011
Total HPP 49.05 45.09
EGU Belaja 8.06 7.50 2016
EGU Deçani 9.81 9.50 2016
HPP Hydroline-Albaniku III 4.27 4.27 2016
HPP Brod II 4.80 4.80 2015
Wind Power 1.35 1.35 2010
LedLight 0.10 0.10 2015
Photovoltaic plant ONIX 0.50 0.50 2016
Restelica 1&2 2.28 2.28 2016
HPP Brezovica 2.10 2.10 2017
Total RES 33.27 32.40
Total 1,560.32 1,037.50
65
ANNUAL REPORT 2017
The Installed capacity of thermal power plants would be sufficient to cover electricity demand, but
due to their ageing, operational capacities have significantly reduced, which in turn affects the
decreased generation of electricity. Another problem is the system balance as the generation
mainly takes place in inflexible thermal power plants and RES that do not contribute to balancing.
Since the installed capacity of generating units is 1 is 1,560.32 MW, the operating capacity is
significantly lower with around 1,037.50 MW. As a result, operating power plants have a capacity of
about 960 MW, while the rest of production capacities are from HP Ujmani, Lumbardhi and other
RES with a total generation capacity of 77.5 MW.
In recent years, there is an increase in the installed generation capacity from RES, which continue to
be operational as private investment within the RES.
5.3.2 Electricity generation
Total production of electricity in 2017 was 5,300 GWh, while in 2016 was 5,835 GWh, which means
that there is a decrease of 9.01 % compared to 2016. Also, in comparison with the electricity
balance for 2017, the generation has been realized with only around 90.96 %, mainly due to
problems with new mining. Table 5.3 shows the generation including own consumption for 2017 by
units and months.
Tab. 5.3 Electricity generation in 2017
Producers
Total January February March April May June July August September October NovemberDecember
MWh
TPP A3 gross 458,139 0 66,295 0 0 52,483 86,443 107,834 72,966 4,152 67,966 0 0
TPP A4 gross 824,241 78,033 66,152 103,730 96,498 47,713 104,957 107,559 45,560 81,302 0 29,563 63,172
TPP A5 gross 801,622 106,129 36,606 111,781 105,504 101,313 1,127 0 89,735 102,775 71,307 75,346 0
TPP A own cons 257,121 25,602 21,658 25,448 24,406 25,986 22,189 23,757 25,104 22,366 18,204 14,049 8,351
TPP A threshold 1,826,881 158,561 147,395 190,063 177,596 175,522 170,339 191,637 183,157 165,863 121,068 90,860 54,821
TPP B1 gross 1,857,690 194,596 132,152 191,261 141,834 181,991 186,332 187,346 64,634 91,907 203,352 141,522 140,765
TPP B2 gross 1,784,271 206,930 181,709 203,049 114,048 188,001 190,903 41,169 138,012 181,835 183,757 63,467 91,391
TPP B Own cons 347,786 37,967 30,677 36,736 25,428 34,548 35,147 22,478 19,517 25,346 35,534 20,150 24,257
TPP B threshold 3,294,175 363,558 283,184 357,574 230,453 335,444 342,087 206,037 183,129 248,395 351,574 184,840 207,898
Ujman+Lumb. 136,308 10,286 10,100 20,745 18,631 22,404 14,508 8,662 5,161 4,356 4,707 6,172 10,575
Distributive HPP 42,951 1,602 3,217 4,984 6,153 8,395 5,314 1,949 1,196 1,004 1,362 2,243 5,532
Total 5,300,315 534,006 443,896 573,366 432,833 541,765 532,249 408,286 372,643 419,618 478,712 284,115 278,826
Balance 2017 5,827,106 533,123 478,692 545,553 459,634 562,254 538,251 394,583 330,032 465,808 551,789 416,854 550,533
Tot./balance ratio 90.96% 100.17% 92.73% 105.10% 94.17% 96.36% 98.88% 103.47% 112.91% 90.08% 86.76% 68.16% 50.65%
It should be noted that 10.56% of energy from gross generation from thermal power plants has
been consumed by thermal power plants as own consumption. A part of these own consumptions
(for both generators TPP Kosova A and TPP Kosova B) is performed directly from internal plants,
whereas the other part has entered into the transmission system and returned to thermal power
plants.
The figure below presents the share of generators in total electricity generation in 2017.
66
ANNUAL REPORT 2017
GWh Generation of generating units in 2017

700
600
500
400
300
200
100
0
Janar Shkurt Mars Prill Maj Qershor Korrik Gusht Shtator Tetor Nëntor Dhjetor
TPP A threshold TPP B threshold Ujman+Lumb. Distributive HPP
Fig. 5.5 Generation of generating units in 2017
By October 2017, total generation exceeded the consumption for the same period, thus the
electricity export was much higher than import. However, this situation has changed since
November due to outstanding problems with expropriation of villages of Hade and Shipitulle. In this
period, the coal reserves of KEK were scarce, with no opportunity of using new spaces until a
solution for compensation of properties is found.
This situation created with regard to expropriation has damaged KEK financially considering that
requests for compensation reached higher values than the price calculated a few years ago. All this
resulted in halving the operation of KEK generators in November and December and increased
imports to cover non-generated electricity. In addition, KEK has been financially damaged by the
reduction of generation that resulted in reduced revenues compared to the prediction according to
the energy balance.
Increase of import due to reduced KEK generation, as well as high import prices during this period,
which has affected even the supplier (including the distribution network operator for covering
losses in distribution) due to the change of energy price to be charged by KEK to the supplier and
the imported energy price.
Furthermore, this situation has affected the transmission system operator because KOSTT has to
import, at very high prices, the energy required to cover transmission losses, instead of obtaining
this electricity from KEC as a return of debt determined by ERO.
RES generation in 2017 reached 42,951 MWh and is lower for 20.5% than in 2016.
67
ANNUAL REPORT 2017
MWh Share in generation by generating units 2017

20 ,000
18 ,000 17122
16 ,000
14 ,000
12 ,000 10112
10 ,000
8021
8 ,000
6 ,000
3350
4 ,000
2352
2 ,000 941
173 679
117 84
0
Fig. 5.6 RES generation in 2017

Operation of generating units
The operation of generating units during 2017 and until the last two months of the year has been at
a satisfactory level, approximated to the forecasts in the energy balance for the operating hours, as
well as, for energy provided in the system. The number of drop outs of generating units in thermal
power plants has been higher compared to the previous year, and these interruptions can be
divided into planned interruptions, unplanned interruptions and failures.
Find below all types of interruptions and availability of thermal power plants for 2017.
Tab. 5.4 Interruptions of generating units 2017
TPP Kosova A TPP Kosova B

2017
A3 A4 A5 B1 B2
Planned interruptions 3 3 4 3 4
Unplanned interruptions 6 4 1 8 5
Failures 1 4 1 7 6
Total interruptions 10 11 6 18 15
68
ANNUAL REPORT 2017
Operating time of the generating units of TPP Kosova A and TPP Kosova B has been presented in
graphical form in the figure below and were lower, especially A3 unit which operated only for
37.57% of the time.
Fig. 5.7 Operation of generating units in 2017
orë Operation of generating units 2017

8,000
6,855
7 , 000 6,513
5,918
6 , 000 5,562
5 , 000
4 , 000
3,291
3 , 000
2 , 000
1 , 000
0
A3 A4 A5 B1 B2
The figure below presents the trend of generation of generating units for the period 2008 – 2017.
GWh Generation by generators for 2008 - 2017
7 ,000
5 ,862 5,835
6 ,000 5 ,503
5 ,314 5,300
5,037 5 ,167
4 ,798 4 ,844
5 ,000 4 ,527
3 ,812
4 ,000 3 ,557
3 ,568
3 ,378 3,310 3 ,294
3,254 3,252 3 ,195
3 , 140
3,000
1 ,922 2 ,033 1 , 827

1 ,685 1 ,840 1 ,907 1,804
2,000
1 ,424 1,432
1,197
1 ,000
158 105 143 102 142 235 179
76 122 96
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
TP Kosova A TP Kosova B HPP and RES Total production
Fig. 5.8 Generation of electricity for 2008 – 2017
69
ANNUAL REPORT 2017
5.4 Transmission system
Kosovo transmission system is operated by KOSTT, who is responsible for the safety and reliability
of energy system operation, which has sufficient capacities to cope with energy flows in the system.
KOSTT coordinates between system operation and these energy flows through the electricity
transmission network, which is connected to regional and European energy system through lines of
these countries:
 Albania, Macedonia, Montenegro and Serbia – line 400 kV;
 Albania and Serbia – line 220 kV; and
 Serbia – with two lines 110 kV.
Interconnection line 400 kV SS Kosova B - SS Kashar (Tirana) was finalized in 2016 included issuing
successfully for testing, but for political reasons has not yet been made entirely operational. The
Agreement signed for secondary regulating frequency/power between KOSTT and OST in Albania
also remains unimplemented since KOSTT has not yet begun to operate as a regulated area/block
within ENTSO-E.
Transmission network of Kosovo energy system is well-connected to the regional system and meets
the domestic transmission needs and criterion N-1, except line Prizren 2 – Rahovec, which remains
with radial supply.
The transformation capacities and transmission network lines by voltage level are shown in the
following tables:
Tab. 5.5 Substations in transmission network
Transformation Power
Owner No. of SS No. of TR
(kV/kV) (MVA)
400/220 KOSTT 1 3 1,200
400/110 KOSTT 2 4 1,200
220/110 KOSTT 3 9 1,350
220/35 Feronikel 1 2 320
220/35/10(20) (Besiana) KOSTT 1 1 40
220/10(20) (Besiana) KOSTT - 1 40
110/35/10(20) KOSTT 7 7 278
110/35/6.3 Trepça 1 2 126
110/6.3 Trepça - 2 63
110/35 Ujmani 1 1 20
110/6.3 Sharri 1 2 40
110/10(20) KOSTT 11 22 790
110/35 KOSTT 6 19 641
110/10 KOSTT 3 8 252
35/110 (Deçan) Kelkos - 1 40
Total 38 84 6,399
70
ANNUAL REPORT 2017
Tab. 5.6 Lines in transmission network
Voltage (kV) Owner Length (km)

400 KOSTT 279.5
220 KOSTT 231.8
110 KOSTT 841.8
Gjithsej 1,353.1
5.4.1 Electricity flows in transmission systems
The transmission network has considerable electricity flows to cover customer demand from
domestic generation and import but also for possible exports of electricity surpluses, and also for
electricity transited towards other countries. Electricity transit through Kosovo network is very high,
about 26% compared to the consumption, and burdens the network by causing losses, depreciation
of network, as well as the need for maintenance of transmission network.
The figure below shows the energy flows throughout all interconnectivity lines in both directions
(entries, exits).
71
ANNUAL REPORT 2017
Fig. 5.9 Electricity flows in interconnection lines

Through ITC Mechanism is made the calculation for compensation of transit costs and obligations
for imports and exports, and finally is made the reconciliation for the whole region. From 1 January,
2016, ANNUAL REPORT 2016 63 KOSTT participates in ITC mechanism for calculation of
compensation for transit costs and obligations for imports and exports. It is worth emphasising that
the share of transit in the transmission system network, in the earlier periods, was much higher, (at
times over 50%), however there is a decline trend, particularly following the increase of domestic
demand.
As far as the transmission network operation is concerned, we have to take stock of KOSTT inability
of allocate transmission capacities as KOSTT as not been recognized as a regulatory zone/block. The
allocation of capacities would generate revenues for KOSTT, which could be used to repair and
maintain transmission capacities, as well as building new transmission capacities in cases of network
overloads. Serbia Transmission System Operator (EMS) still allocates capacities for Kosovo lines, as
well as collects financial revenues from such allocation.
72
ANNUAL REPORT 2017
The energy agreement signed between Kosovo and Serbia is not yet implemented, although
originally scheduled to be implemented by November 2015, but it was conditioned with the
licensing and operationalization of an electricity supplier in the north of Kosovo. This has not been
implemented, and therefore the KOSTT- ENTSO-E connection agreement has not yet been
implemented.
Other factors in addition to regular functioning of the transmission network, such as generation,
consumption, energy import and export, also have an impact on the security of customers energy
supply.
The flow of energy from generation, transmission to the customer, as well as, the electricity flows
towards the regional networks including transit, is shown in figure 5.10
Electricity flows in system in 2017
Distributive Public g. Other g. Import Export

generators KEK (A+B) Ujm. + Lumb.
43 GWh 1,827 GWh 136 GWh 1,242 GWh 880 GWh

3,294 GWh
2,245 GWh Intercon.

OST (KOSTT) – 5643 GWh flow offtake
(118 GWh losses)
2,633 GWh Intercon.
flow intake
4,955 GWh
DSO (KEDS) - 4,997 GWh Deviation

(1,464 GWh losses) 25 GWh to ES
3,532 GWh 96 GWh 475 GWh
Customers in Customers connected in

Internal consumption
distribution network KEK transmission
Fig. 5.10 Electricity network in system in 2017
5.4.2 Investments in transmission system
For sustainable level of electricity supply, reduction of losses and improvement of secure and
quality of services, investments are needed in certain parts of network, as well as adequate
maintenance of existing capacities.
Investments in transmission system can be categorized as:
- Projects started in previous years and completed in 2017 that still have valid warranty
period; and
- Projects commenced in 2016/2017 and ongoing.
73
ANNUAL REPORT 2017
Projects commenced in earlier years and ended in 2017 and have valid warranty period
 Project Package "Improvement of Transmission Network, Phase IV & V":

LOT1- Substations – completed project
o Rehabilitation of switches in SS 220/110 kV Prishtina 4;
o Installation of metering groups in interconnection lines;
o Transformer fields 400/110 kV in SS Peja 3 (project completed in 2016)
o SS 110/35/10 kV Peja 1 – plants GIS (5 fields 110 kV, have been completed in 2016 -
79%). GIS has been energized (2 fields 110 kV of GIS, in SS Peja 1, have been
completed in 2017 - 21%).
LOT 3 – Transmission lines – completed project
o Rehabilitation of line 110 kV, SS Peja 2 – SS Deçan;
LOT 4 – Rehabilitation of 19 substations – completed project;
o Change of HV (High Voltage ) and MV (Medium Voltage) equipment in SS Viti;
o Change of HV and MV equipment in SS Lipjan;
o Supply and installation of power transformer TR 3 – 40 MVA, in SS Lipjan;
o Change of power switches in SS 220/110 kV Prishtina 4;
o Change of own AC/DC consumption at substations 110 kV;
o Change of control system in SS Kosova B, SS Besiana and SS Prishtina 5;
 Inclusion of all changes in existing substations, as well as incorporation of new substations
in SCADA/EMS in Dispatch Centre and Emergency Dispatch Centre – project completed;
 Installation of metering groups at the new border between KOSTT and KEK/DSO – project
completed at a level of 95% in total. Works in SS Vallaq and SS Ujman (due to political
situation) are not completed and SS Theranda due to the lack of conditions for work;
 Installation of TR 2 in SS 110/10(20) - Skenderaj and installation of TR in SS Burim –
completed project;
 Revitalization of 110kV Substation, side 35kV (Gjilani 1 and Ferizaji 1) – project completed;
 Other projects from DP: Supply of 400kV switches, Renovation of Facility of 200m2 at
“Kurriz”, Supply of 48V DC batteries for telecommunication transmission equipment
network, etc.
Projects commenced in 2016/2017 and ongoing
During Q3 of 2016, contracts have been signed for projects funded by EBRD/KOSTT and should be
completed in Q4 2018 and Q3 2019. These projects are at the phase of designing, producing and
delivering equipment. Construction and installation works are expected to commence when there
are conditions for work, upon obtaining work permits.
LOT 1 – Sub-stations with GIS that are ongoing,
o 110/10(20) kV – SS Prishtina 6 and 110 kV HIS in SS Prishtina 4 (design 80 %, delivery of
equipment is 80 %);
o 110/10(20) kV – SS Mitrovica 2 (design 80 %, delivery of equipment is 80 %);
o 220/10(20) kV – SS Drenasi 2 (design 80 %, delivery of equipment is 80 %);
74
ANNUAL REPORT 2017
o In SS 110/35/10 kV Theranda – Rehabilitation of substation, construction works and

installing works have commenced (design 90 %, delivery of equipment is 80 % and
construction works 60%)
LOT 2 – Power transformers: 40MVA
o 2x40 MVA SS Prishtina 6, 2x40 MVA in SS Mitrovica 2, and 2x40 MVA in SS Drenasi 2, are at
the transformer design and production phase 65% ;
LOT 3 – Transmission lines: design works have been completed for 70%, production and delivery of
cables 100%,
o single line 110 kV SS Rahovec – SS Theranda,
o double line and cable 110 kV SS Fushe Kosova,
o double line 220 kV Drenas 2,
o double line 110 kV SS Mitrovica 2, and
o double line and cable 110 kV SS Prishtina 6 – SS Prishtina 4.
Works are at the line designing phase70%, production and delivery of cables has been partly
completed 100%.
The table below presents KOSTT capital investments allowed and realized for the first period of
multi-year periodical tariff review 2013 -2017.
Tab. 5.7 Investments in KOSTT in the last 5 years
INVESTMENTS IN KOSTT FOR MULTIYEAR PERIOD
Transmission, System and Market Operator
Allowed Realized
Year
(€ mil) (€ mil)
2013 33.65 21.29
2014 31.18 12.46
2015 26.90 36.91
2016 15.45 24.62
2017 13.06 27.48
Total 120.25 122.76
5.4.3 Maximum load and energy demand in the energy system
The maximum load (namely peak load) value is of particular importance for analysing the
functioning of the energy system, whereby usually five (5) maximum loads in different hours and
different days of the year as used for this purpose. The table below shows the max load values
(peak) for 2017.
Tab. 5.8 Maximum loads (peak) values in 2017
Maximum load
Date Time
Pmax (MW)
1,161 11.01.2017 20.0
1,151 09.01.2017 19.0
1,139 12.01.2017 19.0
1,122 31.12.2017 18.0
1,100 22.01.2017 19.0
75
ANNUAL REPORT 2017
The maximum load in Kosovo’s energy system was recorded on 11th of January 2017, at 20:00h,
reaching to 1,161 MW, which is higher than the maximum load in 2016 (1,160 MW).
Demand change by days and seasons, and the system balance becomes difficult because of such
changes. In order to see this impact, particularly in the case of Kosovo’s energy system, it is
important to analyse the daily consumption diagram per hour for the entire year.
The diagram below shows demand and generation, whereby one can notice that production is
higher than demand during night-time, whereas during the day-time, in particular in the evening,
there is a significant increase of demand that is higher than production; i.e. within the same day,
during the day-time (high-tariff), production does not cover the demand and electricity should be
imported, whereas during the night-time (low tariff) there is electricity surplus that needs to be
exported.
MWh/h Production and consumption in 2017 - Average per hour

1000
900
784 781 771
800 751 758 744 749 762 754
702 722 709 700 701 724 703
700
608 613
600 526 512
479
500 450 441 455
400
300
200
100
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Prodhimi Konsumi
Fig. 5.11 Daily diagram of annual average for 24 h for 2017
The energy system balancing in our country is rather complex and difficult. This is particularly
affected by two main factors, such as: inflexibility of generating units and great difference for
electricity between day-time and night-time. The difference in the demand for electricity during
different periods of the same day poses serious obstacles for following the demand diagram and
keeping the system deviation within permitted limits.
Find below the average difference between daily consumption maximums and minimums during
2017.
76
ANNUAL REPORT 2017
MWh/h Maximums/minimums and monthly demands - 2017 GWh

1200 800
1080 720
960 640
840 560
720 480
600 400
480 320
360 240
240 160
120 80
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Con Max Min
s
Fig. 5.12 Monthly average of the demand and maximum/minimum daily loads 2017
Load shedding due to lack of electricity
Despite all efforts to eliminate the supply load shedding due to the lack of electricity, there is still a
need for load shedding of the electricity supply.
The table below presents monthly power outages for 2017, whereas in the figure below power
outages by years.
Tab. 5.9 Power outages
2017 January February March April May June July August September OctoberNovemberDecember Total
Reductions MWh 6,420 9,770 1,895 2,059 1,780 0 0 0 0 0 0 678 22,602
Load shedding varies from year to year, with a trend of decline, and in 2017 the load shedding has
been at the level of 22,602 MWh.
77
ANNUAL REPORT 2017
GWh
Load Shedding over years 2008-2017
1000
900
778
800
700
600
500 431
400 333
300
205
200 154
87 67
100 53
21 23
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fig. 5.13 Consumption over the years during 2008 - 2017
5.4.4 Demand and electricity losses in the transmission network
The total demand of electricity in 2017 was 5,686 GWh and represents an increase of 6.43%
compared to 2016, when it was 5,342 GWh. Compared with the forecast of the electricity balance in
2017 is for 4.06% higher.
Table 5.10 presents the total demand and losses in transmission during 2017, and a comparison
with power balance for 2017.
Tab. 5.10 Total demand and losses in transmission network in 2017
Gross demand Gross demand Realis./Balance Losses in Losses in

2017 Realization Balance Ratio transmission realisation Transmision Balance
MWh MWh % MWh % MWh %
January 677,620 554,662 122.17 16,907 2.50 10,952 1.97
February 513,651 494,757 103.82 11,658 2.27 9,805 1.98
March 494,867 491,651 100.65 8,952 1.81 10,515 2.14
April 452,389 451,654 100.16 7,339 1.62 9,059 2.01
May 408,950 423,294 96.61 7,896 1.93 10,302 2.43
June 370,667 383,540 96.64 6,474 1.75 9,917 2.59
July 396,341 397,675 99.66 8,512 2.15 7,562 1.90
August 407,448 387,286 105.21 9,443 2.32 7,038 1.82
September 380,227 402,987 94.35 8,142 2.14 8,752 2.17
October 461,739 438,407 105.32 9,088 1.97 10,688 2.44
November 505,502 469,555 107.66 11,107 2.20 8,051 1.71
December 616,382 568,048 108.51 12,427 2.02 10,262 1.81
Total 5,685,783 5,463,515 104.07 117,945 2.07 112,904 2.07
78
ANNUAL REPORT 2017
The electricity demand had a continuous increase until 2011, whereas from 2011 there is
stabilization in the demand, with fluctuations from year to year, as can be seen in the figure below.
In 2017 there has been an increase in total demand compared to 2016, which was significantly
impacted by the increase of the Ferronikel’s consumption as a result of optimum operation of the
enterprise during the year.
GWh Electricity demand in energy system 2008-2017

7000
6300
5 , 584 5 , 570 5 , 686
5 , 506 5 , 467 5 , 520 5 , 399
5600 5 , 275 5 , 342
4 , 944
4900
4200
3500
2800
2100
1400
700
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fig. 5.14 Total demand in energy system 2008-2017
Total electricity demand is divided into the consumption of customers connected to the
transmission network, consumption of distribution system (including losses), own consumption for
the needs of production plants, as well as losses in transmission. This has been presented in the
table below divided by categories for 2017.
Tab. 5.11 Demand by categories and electricity losses
Total
Electricity demand 2017
MWh
Gross consumption in distribution* 4,996,637
Ferronikeli 384,398
Trepça + Sharrcemi 90,844
KEK internal consumption 95,959
Losses in transmission 117,945
Total demand 5,685,783
KEK own consumption from transmission 134,909
(*) Electricity received in distribution from transmission + distribution production
The amounts of electricity taken from transmission network for own consumption in 2017 is 107
GWh for generators of TPP Kosova A and 28 GWh for TPP Kosova B, or 135 GWh in total.
79
ANNUAL REPORT 2017
The electricity demand differs based consumption periods, but also based on customers’ categories.
This has been presented in a graphical form in the figure below, including losses in transmission and
distribution network (technical and commercial losses).
GWh Share of different categories in total demand in 2017

800
700
600
500
400
300
200
100
0
1 2 3 4 5 6 7 8 9 10 11 12
Household consumption Commercial consumption Industrial consumption KEK internal consumption -
Losses in transmission Technical losses Commercial losses
Fig. 5.15 Share of different categories in total demand 2017
The Figure 5.15 presents the change of demand by months. In some categories, the change is quite
significant, e.g. household consumption and commercial losses that are higher during the winter
mainly due to use of electricity for heating.
In recent years, losses in transmission system are at an acceptable level thanks to investments from
Kosovo and include losses caused by transit as well.
Losses in transmission network against consumption

7.00%
6 . 00 %
5 . 00 %
4 . 35 %
4 . 00 %
3.31%
3 . 00 %
2 . 38 %
2 . 25 % 2 . 07 %
2 . 06 % 1.99% 2 . 00 % 2.02% 1.98%
2 . 00 %
1.00%
0 . 00 %
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
80
ANNUAL REPORT 2017
Fig. 5.16 Losses in percentage in the transmission network 2008-2017
Losses in Kosovo transmission network are nearly in the same level as losses in the regional and
European transmission networks. Figure 5.16 presents transmission network losses in percentage
compared to the overall demand of Kosovo energy system. The percentage of losses in the figure
has been calculated against domestic demand, whereas the whole electricity entered in the
transmission system has an impact on the level of losses in transmission. In addition to the domestic
demand, other flows as transit and electricity for generators consumptions, etc., need to be
included for calculating the percentage of losses against transmission network load. The percentage
of losses in transmission calculated in this form is 1.45%.
Cost of electricity losses
Electricity losses in the system consist of losses in transmission, losses in distribution (technical and
commercial) and unbilled electricity in four municipalities in the north of the country. These losses
incur large costs of energy system and have been presented in the following table for the period
2013-2017.
Tab. 5.12 Demand by categories and electricity losses

Description Unit 2013 2014 2015 2016 2017
Technical losses GWh 769 709 722 627 614
Commercial losses GWh 717 590 519 548 585
Losses in north GWh 218 227 247 252 265
Losses in transmission GWh 110 109 110 120 118
Price €/MWh 30.21 27.30 28.20 34.11 35.43
Technical losses mil€ 23,231 19,353 20,371 21,390 21,739
Commercial losses mil€ 21,659 16,096 14,645 18,709 20,743
Losses in north mil€ 6,590 6,206 6,953 8,595 9,399
Losses in transmission mil€ 3,333 2,971 3,102 4,109 4,179
Value mil€ 54,814 44,627 45,071 52,803 56,060
ERO does not accept that customers pay for losses exceeding the loss reduction target set through
input values within multi-annual tariff review. The difference between allowed level of losses and
losses incurred is not included in tariffs, but is covered by the relevant operator.
It is worth mentioning that from unbilled electricity in the amount 265 GWh in four municipalities in
the north of the country presented in the table above, ERO has received 237 GWh in tariffs,
whereas the other part has not been billed based on the decision for preliminary injunction
imposed by the Court of Appeals effective from 1 December 2017.
5.5 Electricity distribution system
Distribution network consists of voltage lines of 35 kV, 10(20) kV, 6 kV and 0.4 kV, as well as
relevant substations of level 35/x kV, 10(20)/0.4 kV and 6/0.4 kV.
81
ANNUAL REPORT 2017
Basic data of substations and lines, including capacity, transformation and length of lines of
distribution system have been presented in the tables below.
Tab. 5.13 Substations and transformers by level of voltage in DSO
Transformation ‘ Installed
Owner No. of SS No. of TR
(kV/kV) Capacity (MVA)
35/10 KEDS 44 94 660
35/10kV Private 8 12 62
35/6kV Private 5 8 43
35/0.4kV Private 16 22 20
10(20)/0.4 KEDS 2,458 2,550 1,296
10(20)/0.4 Private 2,017 2,027 946
10/0.4 Private 1,247 1,253 606
10/0.4 KEDS 2,865 2,865 868
6(3)/0.4 KEDS 65 65 9
Total 8,725 8,896 4,509
Tab. 5.14 Lines in DSO
Voltage Air network Cable network Total

Owner
(kV) (km) (km) (km)
35 kV KEDS 481 20 501
10(20) kV KEDS 1,416 393 1,809
10 kV KEDS 4,165 904 5,070
6 kV KEDS 42 8 50
3 kV KEDS 4 1 4
0.4 kV KEDS 16,867 2,345 19,211
Total 22,975 3,671 26,646
5.5.1 Investments in the distribution system
During 2017, significant investments have taken place in the distribution network, in medium and
low level voltages. KEDS, as a distribution operator, invested around EUR 23.4 million in the
distribution network, which have been summarised in the main projects, as follows:
 Construction in DSO’s Dispatch Centre;

 Strengthening of network, change of 10kV and 0.4kV lines, pillars and transformers
10/0.4kV selected in 7 districts of Kosovo;
 Supply of cubical equipment of medium voltage 35kV and 10 (20) kV in SS 110kV and 35kV;
 Elimination of bottlenecks in distribution lines – Overloaded lines 35kV and 10kV;
 Distribution transformers 10 (20) /0.4kV;
 Improvement of metering points for household consumption and electricity calculation;
 Investments in heavy machinery for operation, vehicle tracking system, purchase of
licenses, purchase of health and security equipment and work equipment, etc.;
 Investments in maintenance network, etc.;
82
ANNUAL REPORT 2017
DSO has made significant investments in the network based on the 5-year investment plan
approved by ERO.
Main investment objectives are:
 Ensuring sustainable and qualitative electricity supply by supporting the increase of load.
 Reduction of technical and commercial losses.
 Rehabilitation and modernization of electricity network.
In 2017, investments have mainly take place in medium voltage lines, including the transfer from
10kV level to 20kV level, summarized as:
 Investments in building capacities in medium-voltage (MV) transformer stations
The abovementioned investments strengthened the exit supply, built capacities, eliminated
failures due to old age, etc.
 Investments commenced in 2016 and energized during 2017
 Construction of overhead power line 10kV Letanci and Llausha in Podujeve – pending
demolition of several pillars and technical acceptance
 Construction of OPL Drenica-Komoran has been completed. Several problems with
regards to the medium voltage pillars are pending. The construction of new overhead
power line includes 1/3 of exit Drenica, which is supplied from TS Magura, and is
supplied by the distributive plant in Komoran.
 Construction of new OPL in exit Bablak, with 63 transformers stations of MV/LV
 Construction of overhead power line 10kV Gllobar and Shtrubullove is being completed
and eliminates a part of the old network.
 Construction of cable power line Klina 1 and Klina 2 which supplies the distribution plant
in Kline, thus eliminating the air network of medium voltage crossing the Municipality of
Klina.
 Investments in OPL of medium voltage 10kV
 Project Bellobradi-Bresana – investment of new line and rehabilitation of network.
 Double aerial line in the exit of Gjinovci and rehabilitation of failures
 Project of rehabilitation of Lubinja node in Zhupe.
 Project for construction of the line with underground and aerial cable in the exit of Lumi
Madh.
 Project of exit Orllani near Lake of Batllava.
 Project of lines of Kllokot, Terpeza and Stacionari for reducing technical losses and
failures, as well as improving the voltage.
 Project Shala with double line is in process.
 Investments in OPL of medium voltage 20kV
83
ANNUAL REPORT 2017
 In 2017, the DSO launched two pilot projects for converting exits 10kV into 20kV.
Selected exits were Drenica in the district of Ferizaj and Breznica in the district of
Prishtina.
 Investments in strengthening the network – earlier projects
It should be stated that several projects for strengthening the network, which have started
in previous years, have been transferred to 2017, whereby works commenced in the
respective years, but energization was done this year:
 58 projects commenced in 2015 and were completed in 2017
 33 projects commenced in 2016 and were completed in 2017.
 Investment in strengthening the network
Investments in the improvement of network are: placing new TS, change of existing TS with
new ones, expanding and rehabilitating the network 10(20)kV, rehabilitation of low voltage
network, installation of MMO and connection of household customers in meters placed
outside houses.
 Investments in the network maintenance;
 Investments in 31.73km new overhead power lines and 7.36 km underground power
lines
 Investments in 49 new TR that added value to assets with 13.2MVA
 Investment in 1km cable of network 35kV in voltage network 10(20)kV, as well as the
existing air network of 19km and cable network of 20km has been changed
 In the low voltage network it has been invested in 163.83km existing air network and
4.24km existing cable network
 Investment in overloaded transformers of MV/LV level
In 2017, 138 TR of MV/LV level with low installed capacity have been replaced with new TR
with higher installed capacity.
 Investments in metering point
During 2017, investments have been made in around 60,000 meters, of which:
 5,274 meters with direct measurement with GSM GPRS communication,
 3,852 meters with direct measurement with PLC
 522 meters with semi-indirect and indirect measurement
 20,797 manual meters replaced with digital ones, and
 26,900 meters dedicated to new connections
 Investments in SCADA
 DSO commenced implementation of SCADA system, which will take place in three
phases. The first phase of project commenced in the previous year and is expected to be
completed during 2018.
84
ANNUAL REPORT 2017
New investments resulted in increased quality of consumption voltage, network performance, and
discharge of overloaded lines, loss reduction, and increased security of supply for customers. In
settlements (cities and towns) there are attempts to replace air network with cable one. Also, based
on investments, distributing facilities have been constructed in several parts of system, which
enable the reduction of the number of radial lines.
Low voltage capital investments have strengthened the low voltage network, whereby consumer
safety has increased, technical and commercial losses have been reduced, and access to meter
reading has been facilitated.
The following table presents the allowed and realized capital investments of KEDS for the first
period of multi-annual tariff review period 2013 -2017.
Tab. 5.15 Investments in DSO in the last 5 years
I N V E S T I M E T N Ë K E D S P Ë R P E R I U D H Ë N S H U M Ë V JE Ç A R E
O p e r a to r i I S i s te m i t të S h p ë r n d a r j e s
V i ti Të l ej u a r a (€ m i l ) Të r ea l i zu a r a (€ m i l )
2013 2 1 .6 5 1 6 .5 7
2014 2 1 .2 3 1 7 .6 4
2015 2 1 .3 9 2 0 .6 4
2016 2 1 .5 6 2 3 .6 5
2017 2 1 .4 2 2 3 .3 9
G j i th s e j 1 0 7 .2 5 1 0 1 .8 9
5.5.2 Consumption and distribution losses
DSO is organized into seven districts: Pristine, Mitrovica, Peja, Gjakova, Prizren, Ferizaj and Gjilan
shown in the following figure. Consumption data, technical and commercial losses and other data
are calculated according to the months but in some cases also by districts.
85
ANNUAL REPORT 2017
Fig. 5.17 Layout of districts of Kosovo distribution system
Electricity consumption in distribution in 2017 is carried out in the amount of 4.997 GWh, while in
2016 was 4.807 GWh, which represents an approximate increase by 3,95%.
The highest consumption was carried out in Pristhina district with 31.6% of the total consumption in
distribution, while the lowest consumption in Gjilan district with 8.3% of total consumption.
Consumption in the distribution system has continued to increase, as well as the overall demand,
and this growth is presented in Figure 5.18 where data from 2008 to 2017 have been presented.
Despite investments carried out so far in the distribution network, the electricity losses continue to
remain high and represent concerning problems to the electricity sector. Losses also have a
negative impact on the supply of customers and financial sustainability for supply and distribution
system operators, as well as the entire energy sector.
86
ANNUAL REPORT 2017
GWh Kërkesa për energji në shpërndarje në periudhën 2008-2017

6,000
5,400
4,997
4,768 4,794 4,807
4,682 4,677
4,800 4,559 4,555
4,428
4,133
4,200
3,600
3,000
2,400
1,800
1,200
600
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fig. 5.186 Demand for electricity in the distribution system 2008-2017
Table 5.16 presents demands (charges), billed energy as well as technical and commercial losses in
distribution.
Tab. 5.16 Consumption and losses in distribution for 2017
En er gj i a e
N ga r k es a H u m b j e t te k n i k e H u m b j et k o m er c i a l e H u m b j e t g j i th s e j
M ua jt f a tu r u a r
MWh MWh MWh % MWh % MWh %
Ja n a r 6 0 9 ,6 8 3 3 6 5 ,9 4 2 8 2 ,4 9 7 1 3 .5 3 1 6 1 ,2 4 4 2 6 .4 5 2 4 3 ,7 4 1 3 9 .9 8
S h k u rt 4 6 0 ,1 7 5 3 0 1 ,6 1 7 5 8 ,5 1 2 1 2 .7 2 1 0 0 ,0 4 5 2 1 .7 4 1 5 8 ,5 5 7 3 4 .4 6
M a rs 4 3 4 ,0 8 0 2 9 4 ,4 4 0 5 3 ,6 8 7 1 2 .3 7 8 5 ,9 5 3 1 9 .8 0 1 3 9 ,6 4 0 3 2 .1 7
P ri l l 3 9 3 ,2 5 6 2 7 4 ,4 3 3 4 7 ,5 3 2 1 2 .0 9 7 1 ,2 9 1 1 8 .1 3 1 1 8 ,8 2 3 3 0 .2 2
Maj 3 5 1 ,4 6 7 2 6 8 ,1 3 1 3 8 ,7 9 3 1 1 .0 4 4 4 ,5 4 3 1 2 .6 7 8 3 ,3 3 6 2 3 .7 1
Q e rs h o r 3 1 8 ,2 3 5 2 5 3 ,3 0 3 3 3 ,4 5 7 1 0 .5 1 3 1 ,4 7 4 9 .8 9 6 4 ,9 3 2 2 0 .4 0
K o rri k 3 3 8 ,1 6 2 2 7 3 ,9 5 8 3 6 ,2 0 1 1 0 .7 1 2 8 ,0 0 3 8 .2 8 6 4 ,2 0 4 1 8 .9 9
Gusht 3 4 8 ,8 4 9 2 8 3 ,6 9 2 3 8 ,9 5 8 1 1 .1 7 2 6 ,1 9 9 7 .5 1 6 5 ,1 5 7 1 8 .6 8
S h ta to r 3 2 2 ,6 0 5 2 5 6 ,5 1 5 3 5 ,4 7 9 1 1 .0 0 3 0 ,6 1 1 9 .4 9 6 6 ,0 9 0 2 0 .4 9
T e to r 4 0 0 ,7 8 4 2 8 0 ,7 8 8 4 5 ,6 2 9 1 1 .3 8 7 4 ,3 6 7 1 8 .5 6 1 1 9 ,9 9 6 2 9 .9 4
N ë n to r 4 6 5 ,5 1 8 3 1 8 ,3 9 8 5 8 ,6 2 2 1 2 .5 9 8 8 ,4 9 8 1 9 .0 1 1 4 7 ,1 2 0 3 1 .6 0
D h je t o r 5 5 3 ,8 2 4 3 6 1 ,0 9 9 8 4 ,2 0 2 1 5 .2 0 1 0 8 ,5 2 2 1 9 .6 0 1 9 2 ,7 2 5 3 4 .8 0
G ji t h s e j re a l i z u a r 4 ,9 9 6 ,6 3 7 3 ,5 3 2 ,3 1 6 6 1 3 ,5 7 0 1 2 .2 8 8 5 0 ,7 5 1 1 7 .0 3 1 ,4 6 4 ,3 2 1 2 9 .3 1
G ji t h s e j s i p a s b i l a n c i t 4 ,5 6 4 ,4 4 0 3 ,2 4 3 ,7 0 2 5 0 3 ,1 3 1 1 1 .0 2 5 1 4 ,2 2 9 1 1 .2 7 1 ,3 2 0 ,7 3 8 2 2 .2 9
The technical losses according to the data sent by the DSO amount to 12.28%, with the impact on
the high level of these losses being the age of the network, the length of the lines, the quality and
type of conductors and transformers, the loading of the equipment as well as their maintenance.
Significant investments are needed to reduce technical losses.
87
ANNUAL REPORT 2017
Commercial losses are high, accounting for 11.72% of the total demand on distribution, adding to
this the unbilled energy in the northern part of Kosovo, which represents 5.31% (265 GWh) of total
demand for distribution with total non-technical losses by 17.03%.
Electricity flows in distribution by districts, including electricity losses, is presented in Table 5.17.
Tab. 5.17 Consumption and distribution losses by districts for 2017
N g a rk e s a E n e rg ji a e
H u m b je t t e k n i k e H u m b je t k o m e rc i a l e H u m b je t g ji t h s e j
D i s t ri k t e t n ë d i s t ri k t e f a t u ru a r
MWh MWh MWh % MWh % MWh %
P ri s h t i n a 1 ,5 8 0 ,1 5 3 1 ,1 8 0 ,3 1 2 1 8 8 ,1 3 8 1 1 .9 1 2 1 1 ,7 0 2 1 3 .4 0 3 9 9 ,8 4 1 2 5 .3 0
M i t ro v i c a 7 3 0 ,6 9 7 2 9 3 ,9 2 5 6 7 ,8 1 8 9 .2 8 3 6 8 ,9 5 4 5 0 .4 9 4 3 6 ,7 7 2 5 9 .7 7
P e ja 5 4 6 ,0 3 0 3 8 5 ,2 5 1 7 3 ,3 2 5 1 3 .4 3 8 7 ,4 5 5 1 6 .0 2 1 6 0 ,7 8 0 2 9 .4 5
G ja k o v a 4 5 0 ,8 3 5 3 2 7 ,9 5 1 7 1 ,4 8 5 1 5 .8 6 5 1 ,3 9 9 1 1 .4 0 1 2 2 ,8 8 4 2 7 .2 6
P ri z re n i 6 4 5 ,7 4 9 4 8 9 ,7 0 5 8 2 ,3 1 2 1 2 .7 5 7 3 ,7 3 1 1 1 .4 2 1 5 6 ,0 4 4 2 4 .1 6
F e ri z a ji 6 2 8 ,4 4 1 4 9 8 ,9 3 4 8 4 ,1 1 1 1 3 .3 8 4 5 ,3 9 5 7 .2 2 1 2 9 ,5 0 6 2 0 .6 1
G ji l a n i 4 1 4 ,7 3 2 3 5 6 ,2 3 8 4 6 ,3 8 0 1 1 .1 8 1 2 ,1 1 4 2 .9 2 5 8 ,4 9 5 1 4 .1 0
G ji t h s e j 4 ,9 9 6 ,6 3 7 3 ,5 3 2 ,3 1 6 6 1 3 ,5 7 0 1 2 .2 8 8 5 0 ,7 5 1 1 7 .0 3 1 ,4 6 4 ,3 2 1 2 9 .3 1
Reduction of commercial losses also has a positive impact in reducing consumption, also including
the network load and technical losses.
At the beginning of 2012 ERO has determined the allowed distribution losses limits based on the
level of losses in 2011 as a starting point but also the trend of reduction in previous years,
determining the degree of reduction of losses of 3% points for three years and 2.5% points for three
other years. The losses that ERO recognized to the distribution operator in tariffs are based on
these targets.
The cost of energy loss is covered by customer tariffs that are regular payers of electricity which
represents an extra charge to these customers but it is unavoidable in order to ensure the regular
functioning of the system. The operator of distribution system made continuous efforts to reduce
distribution losses, especially the commercial ones, having in mind that the implementation of
their reduction requires less investment. Despite the reduction in losses over the years, the DSO
has failed to meet the targets set by the ERO, which means that the cost of not meeting these
targets is borne by DSO itself.
Below is presented the chart with the data for technical, commercial and total losses from the 2008
to 2017.
88
ANNUAL REPORT 2017
Humbjet në rrjetin e shpërndarjes 2008-2017

60%
54%
48%
43% 43%
41%
42% 38%
37%
36%
36% 34%
32%
30% 29%
30% 26% 25% 24%
24% 21% 20% 20%
18%
16% 17% 17%
18%
17% 18% 17% 17% 16% 16%
12% 16% 15%
13% 12%
6%
0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Humbjet teknike Humbjet komerciale Gjithsej humbjet në OSSH
Fig. 5.19 Technical and commercial losses in distribution network for the period 2008-2017
5.6 Electricity Supply
Electricity supply during 2017 is provided by the supplier bearing the universal service obligation,
who has supplied consumers at regulated process and consumers with deregulated prices, for
which a special account has been kept.
Participation of household consumption in the overall billed distribution consumption is still

dominant - about 57.17%. Participation in percentage of the consumption categories compared
with total consumption (shown with loss and without loss distribution) is presented in the figures
below.
Demand in percentage by categories Electricity billed by categories
Losses KEC internal

KOSTT consumption Commercial
Public Lightning
2.07% 1.69% 21.57%
0.53%
Losses
KEDS
25.75% Households
40.29%
Public
Industrial Households
lightning
0.37% 20.73% 57.17%
Commercial Industrial
15.20% 14.61%
Fig. 5.20 Participation of consumption categories with and without losses in 2017
89
ANNUAL REPORT 2017
5.6.1 Billing and collection
During recent years, billed energy has been steadily increasing; especially collection has had a
significant increase. The level of collection against billing in distribution for 2017 was 99.01%, while
the total when also calculating the customers connected in the transmission network to which the
collection is 100%, the total collection reaches 99%.
Consumption categorized according to the level of voltage and customer groups that consume
electricity for 2017 is given in Table 5.18.
Tab. 5.18 Billed electricity by tariff categories 2017
K a te g o ri të e G ji th s e j
Ja n a r S h k u rt M a rs P ri l l Maj Q e rs h o r K o rri k Gusht S h ta to r T e to r N ë n to r D h je to r
k o n s u m i t (M W h ) 2017
220 k V 3 8 4 ,3 9 8 3 4 ,8 4 7 2 9 ,8 8 2 3 5 ,3 0 8 3 4 ,5 6 2 3 2 ,6 4 8 3 2 ,0 3 4 3 4 ,9 4 8 3 2 ,8 9 3 3 2 ,8 3 2 3 4 ,7 3 3 1 4 ,4 4 6 3 5 ,2 6 6
110 k V 9 0 ,8 4 4 5 ,3 8 9 4 ,2 9 1 8 ,2 9 2 9 ,2 4 9 9 ,1 7 8 7 ,2 6 8 8 ,8 2 1 8 ,8 6 7 8 ,6 7 6 8 ,5 2 0 6 ,1 4 5 6 ,1 4 7
35 k V 4 3 ,5 8 7 2 ,5 5 3 2 ,5 4 1 4 ,0 1 0 3 ,4 8 7 3 ,5 7 2 3 ,5 3 7 4 ,1 7 1 4 ,1 2 1 3 ,6 0 7 3 ,8 4 4 4 ,1 0 1 4 ,0 4 5
10 k V 3 1 2 ,1 0 2 2 7 ,2 8 6 2 3 ,0 4 9 2 5 ,8 7 5 2 4 ,4 8 2 2 4 ,1 6 8 2 3 ,6 7 0 2 6 ,0 6 8 2 7 ,0 8 4 2 4 ,4 1 2 2 6 ,5 8 9 2 8 ,7 6 8 3 0 ,6 5 2
F a m i l ja r 2 ,2 9 0 ,9 6 2 2 4 9 ,5 9 0 2 0 3 ,0 6 6 1 9 1 ,4 1 9 1 8 0 ,7 3 0 1 7 4 ,3 0 3 1 6 1 ,1 3 5 1 6 8 ,8 9 1 1 7 1 ,4 3 6 1 6 4 ,7 6 5 1 8 0 ,4 4 5 2 0 6 ,3 7 9 2 3 8 ,8 0 3
0 .4 k V I 3 4 8 ,3 9 2 3 2 ,3 1 7 2 6 ,8 2 0 2 9 ,2 8 3 2 6 ,4 9 4 2 6 ,7 3 1 2 6 ,7 7 9 2 9 ,8 7 1 3 2 ,3 5 2 2 5 ,4 6 9 2 7 ,8 3 5 3 1 ,1 7 3 3 3 ,2 6 8
0 .4 k V I I 5 1 6 ,0 2 2 5 2 ,1 1 8 4 4 ,3 1 9 4 1 ,8 1 6 3 7 ,6 9 9 3 7 ,9 5 9 3 6 ,8 9 7 4 3 ,6 0 6 4 7 ,1 5 9 3 6 ,6 4 1 4 0 ,0 6 5 4 5 ,8 5 0 5 1 ,8 9 3
N d ri q i m i p u b l i k 2 1 ,2 5 1 2 ,0 7 9 1 ,8 2 3 2 ,0 3 7 1 ,5 4 0 1 ,3 9 9 1 ,2 8 6 1 ,3 5 2 1 ,5 4 0 1 ,6 2 0 2 ,0 1 1 2 ,1 2 7 2 ,4 3 8
G ji th s e j f a tu ru a r 4 ,0 0 7 ,5 5 7 4 0 6 ,1 7 7 3 3 5 ,7 9 0 3 3 8 ,0 3 9 3 1 8 ,2 4 5 3 0 9 ,9 5 7 2 9 2 ,6 0 5 3 1 7 ,7 2 7 3 2 5 ,4 5 2 2 9 8 ,0 2 3 3 2 4 ,0 4 0 3 3 8 ,9 9 0 4 0 2 ,5 1 2
Ko n s u m i KEK 9 5 ,9 5 9 1 0 ,7 9 5 7 ,6 4 6 8 ,2 3 5 7 ,9 8 3 7 ,7 6 0 6 ,6 5 6 5 ,8 9 8 7 ,3 9 6 7 ,9 7 2 8 ,6 1 4 8 ,2 8 6 8 ,7 1 9
H u m b je t K E D S 1 ,4 6 4 ,3 2 1 2 4 3 ,7 4 1 1 5 8 ,5 5 7 1 3 9 ,6 4 0 1 1 8 ,8 2 3 8 3 ,3 3 6 6 4 ,9 3 2 6 4 ,2 0 4 6 5 ,1 5 7 6 6 ,0 9 0 1 1 9 ,9 9 6 1 4 7 ,1 2 0 1 9 2 ,7 2 5
H u m b je t K O S T T 1 1 7 ,9 4 5 1 6 ,9 0 7 1 1 ,6 5 8 8 ,9 5 2 7 ,3 3 9 7 ,8 9 6 6 ,4 7 4 8 ,5 1 2 9 ,4 4 3 8 ,1 4 2 9 ,0 8 8 1 1 ,1 0 7 1 2 ,4 2 7
G jith s e j 5 ,6 8 5 ,7 8 3 6 7 7 ,6 2 0 5 1 3 ,6 5 1 4 9 4 ,8 6 7 4 5 2 ,3 8 9 4 0 8 ,9 5 0 3 7 0 ,6 6 7 3 9 6 ,3 4 1 4 0 7 ,4 4 8 3 8 0 ,2 2 7 4 6 1 ,7 3 9 5 0 5 ,5 0 2 6 1 6 ,3 8 2
Billed energy in 2017 is 4,008 GWh, that expressed in monetary value (including VAT) is € 296.1
million, while collection is € 293.4 million. The table below presents the billing, collection, and the
ratio between them presented in percentage that is over 99%.
Tab. 5.19 Billing and collection in 2017
Load Realization Billing Collection Coll./Bill.
2017
MWh MWh € € %
Distribution 4,996,637 3,532,316 270,224,014 267,539,783 99.01%
Ferronikeli 384,398 384,398 4,863,406 4,863,406 100.00%
Trepça+Sharrcemi 90,844 90,844 21,014,345 21,014,345 100.00%
Total 5,471,879 4,007,557 296,101,765 293,417,534 99.09%
Table 5.20 shows billing and collection as well as the ratio in distribution by months for 2017. Also,
the table shows that in a few months the ratio collection/billing is higher than 100% value,
which means that during these months the billed electricity is collected for previous months and
older debt.
90
ANNUAL REPORT 2017
Tab. 5.20 Billing and collection by months in distribution for 2017

Load Realization Billing Collection Coll./Bill.
Distribution 2017
MWh MWh € € %
January 609,683 365,942 30,938,760 25,468,357 82.32%
February 460,175 301,617 25,444,818 26,703,349 104.95%
March 434,080 294,440 25,066,058 24,940,018 99.50%
April 393,256 274,433 20,170,830 22,536,438 111.73%
May 351,467 268,131 19,992,524 20,589,122 102.98%
June 318,235 253,303 18,983,179 18,811,508 99.10%
July 338,162 273,958 20,717,573 24,073,131 116.20%
August 348,849 283,692 21,578,202 22,063,534 102.25%
September 322,605 256,515 19,086,575 19,451,313 101.91%
October 400,784 280,788 21,009,275 19,298,530 91.86%
November 465,518 318,398 22,687,672 19,916,955 87.79%
December 553,824 361,099 24,548,548 23,687,528 96.49%
Total 4,996,637 3,532,316 270,224,014 267,539,783 99.01%
The electricity level billed and collected from 2008 to 2017 is shown in the following figure where a
steady increase from year to year is marked.
€*[mil] Faturimi dhe arkëtimi në shpërndarje 2008 - 2017 %

300 120
99.01
94.94 96.85
250 94.41 100
89.68 88.77
86.87 86.67
268
239
79.70
233
200 80
214
71.87
192
185
169
150 60
270
152
247
247
142
226
222
208
119
100 40
188
178
175
165
50 20
0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Faturimi Arkëtimi Ark/Fat
Fig. 5.21. Billing and collection in distribution over the years 2008-2017
The average price of electricity
The average selling price of electricity varies depending on the consumer category, the voltage level
at which the customers are connected, consumption of electricity at different tariff rates according
to the time when energy is consumed. The average price varies for household and non-household
customers, and Figure 5.22 shows the average selling price for these categories (excluding VAT). The
average sales price also varies according to districts depending on the concentration of
91
ANNUAL REPORT 2017
commercial/industrial activities that consume electricity at certain times. For households’ category,
the average energy price is 6.04 € cents/kWh, while for non-household consumers the average
energy price is 7.94 € cents / kWh.
Çmimi mesatar i shitjes së energjisë elektrike pa TVSH

12.00
11.00
10.37
10.00
9.57
9.00
€ cent/kWh
8.00
7.00
6.00 6.04 6.17
5.00
4.00
3.00
2.00
Kons. familjar Kons. komercial Kons. industrial Ndriqimi publik
Fig. 5.22 The average selling price of electricity 2017 (excluding VAT)
The figure below shows the average price excluding VAT for household customers for the first six
months of 2017 for some countries, issued by Eurostat, since there is still lack of data for the second
half. Eurostat data are categorized by consumption, and the figure shows the consumption value of
2500-5000 kWh, which is closest to the average consumption of a Kosovo’s households.
*Source of data from EUROSTAT

Fig. 5.23 Average prices for household customers for the first half of 2017 (excluding VAT)
92
ANNUAL REPORT 2017
5.7 Import and export of electricity
Given the configuration of generating units for consumption tracking and balancing the electricity
system, in addition to domestic production, import of electricity is also required, while in some
cases surpluses appear, that need to be exported.
5.7.1 Import of electricity
To cover the local electricity needs, KESCO and KOSTT have imported significant amounts of
electricity from the regional market through commercial contracts concluded with electricity
traders, and an amount is received in the form of exchange of electricity with Albanian Energy
Corporation (AEC).
As of April 2017, in compliance with regulatory requirements, KESCO has started to allocate
quantities of imports to cover the need of consumers with the universal service right from the
imports quantities designated to cover losses in distribution network, whereas for the unregulated
consumers (Feronikeli) was started in October 2016.
Based on the obligations under the legislation, KOSTT shall itself provide electricity in order to cover
transmission losses through contracts from domestic production and imports. By the end of August
2017, KESCO has also made imports to cover transmission losses, while as of September KOSTT
itself has started to realize own imports to cover transmission losses.
To cover the electricity system needs KOSTT and KESCO have imported energy in the amount of
1,242,255 MWh. This amount includes imported electricity for regulated and unregulated
customers, losses in the transmission network, losses in the distribution network and losses caused
by unbilled electricity in the four northern municipalities of the country.
Electricity imported by KOSTT to cover transmission network and unbilled energy losses in the four
municipalities in the north of the country starting from September 2017 was 39,692 MWh in the
amount of € 2,687,381 and with average price € 67,71 / MWh. Additionally, KOSTT has purchased
the amount of energy of 9,442 MWh with an average price of 64.12 € / MWh from KESCO under the
same conditions as other electricity importers, but this amount is declared as import by KESCO and
as such it is considered as import of KESCO.
Tab. 5.21 Import of electricity by KOSTT
KOSTT’s imports from September 2017
Month Amount (MWh) Price (€/MWh) Value (€)

September 725 61.64 44,690
October 6,098 60.42 368,458
November 23,734 77.68 1,843,745
December 9,135 47.13 430,488
Total 39,692 67.71 2,687,381
Electricity imported through commercial contracts by KESCO during 2017 was 1,112,734 MWh in
the amount of 65,968,953 €, with an average price of 58.76 € / MWh, while the electricity imported
in 2016 was 556,884 MWh with an average price of 45.80 € / MWh.
93
ANNUAL REPORT 2017
Data on total imports by KESCO and exchanges are presented in the table below.
Tab. 5.22 Electricity import by KESCO through contract and exchange 2017
Import realized by KESCO-2017 Exchange Total
Month Amount MWh Price €/MWh Value (€) Quantity MWh Quantity MWh
January 153,918 79.51 12,237,488 - 153,918
February 92,720 70.73 6,558,058 - 92,720
March 43,206 39.02 1,685,894 - 43,206
April 97,289 42.84 4,167,981 - 97,289
May 51,579 40.66 2,097,270 - 51,579
June 38,724 39.73 1,538,343 - 38,724
July 59,256 55.62 3,296,013 - 59,256
August 72,808 62.99 4,586,505 - 72,808
September 42,909 56.00 2,402,737 - 42,909
October 54,970 52.16 2,867,315 - 54,970
November 181,062 67.99 12,309,728 6,225 187,287
December 234,293 52.16 12,221,621 73,574 307,867
Total 1,122,734 58.76 65,968,953 79,799 1,202,533
Based on the applicable legislation and the "Guidelines on Electricity Market Liberalization", since
April 2017, system operators are obliged to buy energy to cover losses and other auxiliary services
in the competitive market, so KESCO has commenced allocating import to consumers with the right
of universal service and import to cover losses in the DSO. Out of a total of 1,122,734 MWh
imported by KESCO, 416,677 MWh were import for consumers with universal service rights,
315,260 MWh for coverage losses in the distribution network, 381,355 MWh for customers at
unregulated prices and 9,442 MWh for trading with KOSTT.
94
ANNUAL REPORT 2017
Tab. 5.23 KESCO's import for universal service customers, coverage of losses in the distribution network, and
trading with KOSTT
I m p o r ti n g a K E S C O p ë r k o n s u m a to r ë t e s h ë r b i m i t I m p o r ti n g a K E S C O p ë r m b u l i m i n e I m p o r ti n g a K E S C O p ë r tr e g ë ti m m e
u n i v er s a l h u m b j ev e n ë s h p ër n d a r j e K O STT
Sa s ia Çmimi Vl er a Sa s ia Çmimi Vl er a Sa s ia Çmimi Vl er a

M ua ji
MWh € /M W h € MWh € /M W h € MWh € /M W h €
Ja n a r 1 1 7 ,1 7 4 9 2 .1 5 1 0 ,7 9 8 ,0 8 8 - - - - - -
Shkurt 9 2 ,7 2 0 7 0 .7 3 6 ,5 5 8 ,0 5 8 - - - - - -
M a rs 5 ,3 1 3 4 8 .5 4 2 5 7 ,9 1 4 - - - - - -
Prill 3 3 ,3 3 5 4 6 .1 0 1 ,5 3 6 ,5 5 1 2 7 ,2 3 4 4 6 .1 0 1 ,2 5 5 ,4 8 7 - - -
Maj 1 1 ,9 7 9 4 7 .3 4 5 6 7 ,0 9 6 3 ,2 5 6 4 7 .3 4 1 5 4 ,1 4 2 - - -
Q er s h o r 1 ,3 8 1 6 9 .4 2 9 5 ,8 4 6 1 ,3 4 3 6 9 .4 2 9 3 ,2 4 9 - - -
Korrik 3 ,0 1 1 6 3 .6 1 1 9 1 ,5 2 1 1 9 ,7 8 9 6 3 .6 1 1 ,2 5 8 ,7 2 4 - - -
Gusht 9 ,2 6 6 6 8 .0 4 6 3 0 ,4 5 0 2 7 ,7 3 4 6 8 .0 4 1 ,8 8 6 ,9 9 4 - - -
S h ta to r 2 ,3 9 8 5 6 .8 8 1 3 6 ,4 0 6 4 ,5 1 1 5 6 .8 8 2 5 6 ,6 0 1 - - -
T e to r 1 ,0 9 6 6 7 .7 2 7 4 ,2 1 3 1 6 ,5 6 4 6 7 .7 2 1 ,1 2 1 ,7 7 9 60 7 6 .1 2 4 ,5 6 7
N ë n to r 6 3 ,6 3 1 6 8 .5 0 4 ,3 5 8 ,9 7 7 9 5 ,7 3 6 6 8 .5 0 6 ,5 5 8 ,2 9 7 6 ,0 1 1 6 6 .0 1 3 9 6 ,8 0 9
D h j e to r 7 5 ,3 7 3 4 9 .9 3 3 ,7 6 3 ,6 8 8 1 1 9 ,0 9 3 4 9 .9 3 5 ,9 4 6 ,8 0 9 3 ,3 7 1 6 0 .5 3 2 0 4 ,0 4 7
G j i th s e j 4 1 6 ,6 7 7 6 9 .5 2 2 8 ,9 6 8 ,8 0 8 3 1 5 ,2 6 0 5 8 .7 8 1 8 ,5 3 2 ,0 8 3 9 ,4 4 2 6 4 .1 2 6 0 5 ,4 2 2
In addition to the import of electricity through contracts, a quantity of electricity was also imported
through exchange (electricity with electricity) at a total of 79,799 MWh. The entire exchange in
2017 was realized between KEK and the Albanian Energy Corporation (AEC), compared to 2016
(75,405 MWh) this amount is higher by 6%.
During 2017, electricity in the amount of 381,355 MWh with a total value of 17,862,639 € with an
average price of 46.84 € / MWh was imported for Ferronikel as a consumer with unregulated prices,
except in February where due to some limitations in the transmission system it was supplied at
regulated prices from Bulgaria.
Tab. 5.24 Tab. 5.24 Electricity imports for 2017 for customers at unregulated prices
Electricity imports for unregulated costumers (Feronikeli) 2017
Month Quantity (MWh) Price (€/MWh) Value (€)

January 36,744 39.17 1,439,400
February - - -
March 37,893 37.68 1,427,979
April 36,720 37.47 1,375,942
May 36,344 37.86 1,376,033
June 36,000 37.48 1,349,248
June 36,456 50.63 1,845,767
August 35,808 57.78 2,069,061
September 36,000 55.83 2,009,730
October 37,250 44.75 1,666,756
November 15,684 63.48 995,646
December 36,456 63.28 2,307,078
Total 381,355 46.84 17,862,639
95
ANNUAL REPORT 2017
The total amount of imports with contracts in 2017 was 1,162,426 MWh, with an average price of
59.06 € / MWh, compared to 2016 this amount was 109% higher (556,884 MWh), as well as the
average import price was for 29% higher than in the previous year.
Tab. 5.25 Import of electricity by 2017 according by categories
2017 Import
Import for categories Quantity MWh Price €/MWh Amount (€)
Consumers with universal service 416,677 69.52 28,968,808
Loss in distribution network 315,260 58.78 18,532,083
Customers with unregulated prices 381,355 46.84 17,862,639
KESCO for KOSTT 9,442 64.12 605,422
Total KESCO 1,122,734 58.76 65,968,953
KOSTT 39,692 67.71 2,687,381
Total import by contract 1,162,426 59.06 68,656,334
Exchange KEK from KESH 79,799 - -
Total import 1,242,225 - 68,656,334
The following figure shows the import with contracts and price, as well as the exchange with KESH
realized during 2017, for regulated customers.
GWh Import with contracts and as exchange2017 €/MWh

250 100
225 90
79 .51
200 80
70 .73
67 .99
175 70
62 .99
56 .00
150 55 .62 52 .16 60
52 .16
125 50
42 .84
39 .02 40 .66 39 .73
100 40
75 30
50 20
25 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Import Shkëmbim Çmimi €/MWh
Fig. 5.24 Import of electricity by contract and in exchange for 2017
5.7.2 Export of electricity
Given the consumption curve during the hours in the day, and the inefficiency of the generating
units to track consumption, it can be seen that in many cases there is a lack of energy surplus, and
this occurs even on the same day. So in few hours on the same day there are energy imports, while
at other hours electricity surpluses appear that need to be exported
96
ANNUAL REPORT 2017
Electricity surpluses appear mostly during the night hours (at the time of low tariff). In these
periods, surpluses appear also at regional systems, consequently, supply for energy increase at
night, and this affects the export prices to be significantly lower than import prices.
Electricity exported with commercial contracts during 2017 was 876,229 MWh in the amount of
32,757,947 €, with an average price of 37.39 € / MWh, while the electricity exported in 2016 was
1,064,184 MWh with average price of 29.73 € / MWh. The amount of exported electricity is 18%
lower than in 2016, while the average price was 26% higher compared to 2016.
Tab. 5.25 Electricity export with contracts and as exchange 2016
Exports of Electricity with Contracts-2017 Exchange Total
Month Amount MWh Price €/MWh Value (€) Amount MWh SAmount MWh
January 12,030 51.66 621,528 1,900 13,930

February 14,730 34.80 512,531 133 14,863
March 114,692 33.10 3,796,327 936 115,628
April 77,095 34.67 2,672,578 72 77,167
May 188,476 38.51 7,258,324 0 188,476
June 194,160 39.89 7,744,555 0 194,160
July 68,215 37.18 2,536,131 479 68,694
August 35,596 36.35 1,293,918 161 35,757
September 90,634 35.92 3,255,252 0 90,634
October 80,601 38.05 3,066,803 0 80,601
November 0 0 0 0
December 0 0 0 0
Total 876,229 37.39 32,757,947 3,681 879,910
Export with contracts was carried out with different traders, while export as exchange, in 2017, was
carried out only by KEK with AEC.
The figure below shows the export with contracts and as exchanges.
97
ANNUAL REPORT 2017
GWh Export with contracts and as exchange 2017 € /MWh

200 100
180 90
160 80
140 70
120 60
51 .66
100 50
39 .89
38 .51 37 .18 35 .92 38 .05
80 34 .80 34 .67 36 .35 40
33 .10
60 30
40 20
20 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Export Exchange Price €/MWh
Fig. 5.24 Export of electricity with contracts and as exchange for 2017
Given the amount of imported and exported electricity in 2017, it is noted that Kosovo has been a
net exporter of electricity, with an amount of 362,315 MWh, shown by months in the following
figure.
GWh Net Import / Export for the year 2017 export

300
250
200
155
137
150
100 72
47
50 20
9
0
January February March April May June July August September October December
-50 -20
-37 November
-100 -78
-150
-140
-200
-250 -211
-300
-350 -317
-400
import
Fig. 5.25 Import and export of electricity in 2017
The electricity import and export price during 2000 - 2017 has marked ups and downs. Below is the
picture showing the import and export prices from 2000 to 2017.
98
ANNUAL REPORT 2017
€/MWh Import and export price over the years

130
120 112 .52
110
100
90 83 .66
79 .46
75 .77
80
69 .66
70 62 .14
57 .91 59 .06
60 54 .87
52 .31 51 .76
47 .87 45 .80
50 44 .53
39 .64
40
30 .43 29 .60 32 .67 45 .05
40 .70 38 .45
30 36 .59 37 .39
31 .16 32 .86 33 .31
20 29 .60 28 .25 29 .73
26 .44
20 .17
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
import price €( /MWh) Export price ( €/MWh)
Fig. 5.26 The average import and export price over the years
5.8 Quality Standards of electricity supply and services
Standards of quality of electricity supply and service are an important element of the regulation of
the electricity sector. These standards are defined so that the quality of supply and service of
electricity to customers continuously improves by the electricity enterprise.
Standards of quality of electricity supply and service are defined and monitored according to the
following areas:
o Continuity of supply;
o Voltage quality; and
o Commercial Quality.
5.8.1 Continuity of supply
Continuity of supply is related to the availability of electricity, respectively displays the

number and duration of outages per customer within a year.
Continuity of electricity supply in 2016 is monitored by ERO for both system operators:
Transmission System and Market Operator (TSMO) and Distribution System Operator
(DSO).
Continuity of supply is measured by indexes:
o SAIDI - System average interruption duration index;
o SAIFI - System average interruption frequency index; and
99
ANNUAL REPORT 2017
o ENS - Energy Not-Supplied.

5.8.1.1 Measuring indexes reported by OST
Measuring indexes reported by KOSTT for the standards of quality of electricity supply and
service for 2017 are shown below.
o SAIDI - for planned interruptions in the transmission system has been 4.29 hours;
o SAIDI - for unplanned interruptions in the transmission system has been 0.37 hours;
o SAIFI - for planned interruptions in the transmission system has been 0.56;
o SAIFI - for planned interruptions in the transmission system has been 0.56;
o ENS - for planned interruptions in the transmission system has been 4.847 GWh; and
o ENS - for unplanned interruptions in transmission system has been 0.489 GWh.
SAIDI (hours) SAIFI
0.37,
8% 0.46,
0.56,
4.29, 55% 45%
92%
Unplanned Planed Unplanned Planed
ENS (GWh)
0.489,
9%
4.847,
91%
Unplanned Planed
Fig. 5.27 Measurable indicators SAIDI, SAIFI and ENS by KOSTT for 2017
The figure below shows the measuring indexes, reported by KOSTT for the standards of
quality of electricity supply and service during 2012-2017.
100
ANNUAL REPORT 2017
SAIDI Transmission SAIFI Transmission

10.00 5.00
9.00 4.50
8.00 4.00
8.33
7.00 3.50
7.58
6.00 3.00
4.35 4.65 2.27
5.00 4.13 2.50 2.07
4.00 5.03 2.00
2.18
3.00 1.50 1.89 1.79 1.02
2.00 1.00
1.00 0.50
0.00 0.00
2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018
SAIDI (hour) SAIFI
GWh ENS Transmission

10.00
9.00 9.40
8.00
7.00
6.00 5.34
5.00
4.00 4.80 2.82
3.00 2.27
2.00
2.20
1.00
0.00
2011 2012 2013 2014 2015 2016 2017 2018
ENS (GWh)
Fig. 5.28 SAIDI, SAIFI and ENS by KOSTT indicators for the period 2011-2017
According to data reported by KOSTT for the SAIDI measuring index, it is estimated that in total this
index has increased by 6.86% over 2017 compared to 2016, mainly due to the works carried in the
transmission network. It should be noted that in the 2016 SAIDI index, compared to 2016, we have
increased the planned outages by 26.65%, while there is discounts of unplanned outages of -
164.82%, which confirms the stability in the operation of the transmission network.
For the SAIFI measuring index, from the reported data it is estimated that in total this index has a
decrease of -122.55% over 2017 compared to 2016, respectively there is a decrease of this index of
planned outages of -119.64% and unplanned outages of -126.09%.
While regarding energy not supply - ENS, in 2017, we have an increase of this index by 82.30% from
2016, where in the planned outages have increased by 172.76%, while discounts on unplanned
outages of -135.17%. The growth of this index is mainly due to the works carried out in the
transmission network.
5.8.1.2 Measuring indexes reported by the DSO
Measuring indices reported by the DSO on standards of quality of electricity supply and service for
2016 are presented below.
o SAIDI - for planned interruptions in the distribution system has been 50.80 hours;
o SAIDI - for unplanned interruptions in the distribution system has been 50.18 hours;
o SAIFI - for planned interruptions in the distribution system has been 33.61;
o SAIFI - for unplanned interruptions in the distribution system has been 26.45;
o ENS - for planned interruptions in the distribution system has been 33.00 GWh; and
101
ANNUAL REPORT 2017
o ENS - for planned interruptions in the distribution system has been 33.48 GWh.
SAIDI, SAIFI dhe ENS për OSSH indexes

120
100
80
50.18
60
26.45 33.48
40
50.8
20
33.61 33.00
0
SAIDI (hours) SAIFI ENS (GWh)
Planned Unplanned
Fig. 5.29 SAIDI, SAIFI and ENS by KOSTT indicators for the period 2011-2017
In the following figures we have shown measuring indices reported by the DSO on standards of
quality of electricity supply and service during 2011 – 2017.
Hours not planned

SAIDI for DSO SAIFI for DSO
120 60
109 .61 56.91
108 98 . 81 54
50.7 44.24
96 48
85.55 49 .74
80.31 81 . 74
84 82.34 42 43.27
72 33 .61
36
60 50.80 30 29 .57
48 26 .45
24 27.32
49 .32 50.18
36 18 11.42
24 12
20.68
12 6.10 4.92 4 .97 4.58 2.59 2 .68 2 .42
6 1.6
0
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
2010 2011 2012 2013 2014 2015 2016 2017 2018
Planned (hours) Unplanned (hours) Planned Unplanned
GWh ENS for DSO

180
155.2
160
140
120
100
68 .51 72 .23
80 66.48
51 .58 47.07
60
35.99
40
20
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
ENS (GWh)
Fig. 5.30 Indicators SAIDI, SAIFI and ENS from the DSO for the period 2011-2017
102
ANNUAL REPORT 2017
From the above data is noted that measuring indexes SAIDI, SAIFI and ENS in 2017 are generally not
improved compared to 2016, and that because during 2016 the DSO has carried out the largest
number of planned outages in order to maintain the electricity network.
According to the data reported for SAIDI measuring index in 2017, it is noted that there is no
improvement of this index compared to 2016, which according to the data shows that overall in
2017 there is a -30.38% decrease of outages compared to 2016. It should be noted that during the
most detailed analysis of the index - SAIDI, is observed that in 2017 there was a -62.09% planned
outages decrease compared to 2016, while there was an increase of 1.74% for unplanned outages
in 2017 compared to 2016.
An analysis of the SAIFI measuring index shows that during 2017, there is improvement compared
with 2016, which according to the data is noted that in 2017 we have decrease of the frequency of
electricity outages per customer - SAIFI for -19.15% compared to 2016. During the most detailed
analysis of the index - SAIFI, is observed that in 2016 there was a decrease of -31.60% in the
frequency of planned electricity outages per customer - SAIFI compared to 2016, as well as a -3.3%
decrease of unplanned outages frequency per customer compared to 2016.
During 2017, the energy not supplied (ENS) in general has improved compared to 2016, according
to the data we can see that in 2017 there is a decrease of -8.65% compared to 2016. In 2017 there
is a decrease of -40.27% for energy not supplied for planned outages compared to 2016, while there
is an increase of 29.07% for energy not supplied in unplanned outages compared to 2016.
5.8.2 Quality of voltage
The voltage quality is related to the technical aspects of the electricity system and compares to the
nominal voltage, which during this period was mainly monitored through registration of customer
complaints regarding the quality of voltage.
During 2017 the number of complaints filed by customers regarding the voltage quality in the DSO
has been 1,175 complaints, out of which 1,051 or 89% were solved, 21 or 2% are in the screening
process, whereas 103 complaints or 9% have remained unsolved.
No. of complaints about the quality of the voltage
103
9%
21
2%
1,051
89%
Solved Unsolved In process
Fig. 5.31 Customer complaints about voltage quality during 2017
103
ANNUAL REPORT 2017
Below, in the figure are shown customer complaints about voltage quality over the years, which
show that there is a continued increase in customer complaints about voltage quality.
Complaints about the quality of the voltage

1400
1175
1200
1000
800
600
400 349
288 304
200
0
2014 2015 2016 2017
Fig. 5.32 Complaints about voltage quality by years
The voltage quality standards are defined in the Rule on General Conditions of Energy Supply, in the
Distribution Code and Metering Code of Distribution.
5.8.3 Commercial quality
Commercial quality determines the efficiency and accuracy of resolving customers’ complaints and
requests. Commercial quality regulation takes into account the mutual relationship between the
customers and supplier.
In order to analyse the commercial quality, the data obtained by the licensees have been presented
in two categories which directly affect the customers’ issues. These categories are as follows:
o New connections, and
o Customers' complaints
5.8.3.1 New connection
In commercial quality standards, among other things, are also incorporated new connections,
through which is recorded how quickly the energy enterprise takes measures for execution of new
connections.
During 2017, KESCO had in total 27.804 regular requests for registration of tariff groups 4, 5, 6, 7
and 8, requests for new connections transferred from the previous year were 855, whereas during
2017 are approved 26.481 requests for new connection.
From the KESCO data can be seen that from the total number of requests for registration of new
connections, the largest number of requests was from the households (tariff group 5, 6 and 7)
22,500 or 80.92%, requests for registration of new connections of the commercial tariff group 0.4
kV Category II - tariff group 4, with 3,550 or 12.77%, whereas the requests for tariff group 8 - public
lighting were 219 or 0.79%. From the total number of requests for new connections, 1,535 requests
104
ANNUAL REPORT 2017
or 5.90% have been classified into undefined categories, because consumers in their applications
have not specified the category of consumer.
It is also noted that out of the total number of the customer registration into the billing program
"CCP", household customers are 22,285 or 84.15%, followed by tariff group 4 (0.4 kV Category II -
commercial) with 3,956 registrations or 14.94%, and the tariff group 8 (public lighting) with 8
registrations or 0.52%. It should be noted that the highest number of registrations compared with
the requests for new connections is because there are registration of customers that were
transferred from last year and some of them are registered this year.
New connections by districts January - December 2017

12,000
10,800
10,057
9,522
9,600
8,400
7,200
6,000
4,800
3,901
3,233 3,140 3,587
3,600 2,908 2,951 2,805
2,839
2,383 2,371 2,308
2,400 2,280
1,200
-
Prishtina Prizreni Peja Ferizaji Gjilani Mitrovica Gjakova
Fig. 5.33 New connections by districts
Regular requests
for 2017 Adelina3
Registration in CCP
The diagram above shows that for 2017, out of the total number of requests for new connections,
the majority of requests have been registered in Prishtina District with 10,057 or 36.17%, followed
by district of Ferizaj with 3,901 or 14.03%, whereas the lowest number of requests for new
connections has been registered in the Gjakova district with 2,371 or 8.53%. Also, it should be
stated that from the total number of registrations of customers new connections in the billing
program, the majority of registrations have taken place in the district of Prishtina with 9,522 or
35.96%, followed by the district of Ferizaj with 3,587 or 13.55%, whereas the lowest number of
registrations has been recorded in the district of Gjilan with 2,280 or 8.61%.
It should be stated that during 2017 there have been 9.49% requests for new connections more
than in 2016 and 5.04% more registrations of customers than in 2016.
5.8.3.2 Electro-energetic consents
From the data presented is shown that during 2016, 804 requests were submitted to KESCO for
electro-energetic Consents, whereas the requests transferred from 2015 have been 26, as shown in
the following table.
105
ANNUAL REPORT 2017
Tab. 5.26 Electricity consents for 2017
Districts Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Total
Prishtina 13 11 17 18 25 36 42 40 27 28 23 35 315
Mitrovica 3 1 10 7 11 7 6 9 7 8 7 4 80
Peja 12 10 9 7 15 10 14 7 15 13 19 9 140
Gjakova 7 11 18 19 1 15 18 7 5 12 3 3 119
Prizreni 9 6 8 8 15 12 12 12 11 8 11 7 119
Ferizaj 12 15 14 14 13 37 20 23 20 31 28 23 250
Gjilani 3 7 7 6 13 11 17 11 16 14 14 14 133
Total 59 61 83 79 93 128 129 109 101 114 105 95 1,156
According to the table above is noticed that from the total number of requests for electro-energetic
Consents in 2017, the highest number of requests registered was in Pristine district, i.e. 315 or
expressed in percentage 27.25%, followed by Ferizaj district 250 or 21.63%, whereas the lowest
number was in Mitrovica district 80 or 6.92%.
Tab. 5.27 Electricity consents by districts for 2017
Submitted
Request for EC
Districts Reviewed In process to other
2017 departments
Prishtina 315 282 9 24

Mitrovica 80 73 1 6
Peja 140 130 2 8
Gjakova 119 102 0 17
Prizreni 119 108 1 10
Ferizaj 250 228 11 11
Gjilani 133 117 6 10
Total 1,156 1,040 30 86
The table above shows that out of 1,156 requests of applicants for Electricity Consent (EC), 1,040
have been reviewed, whereas based on KEDS data, 86 other requests have been reviewed, but
according to the Department of Electricity Consents within KEDS these requests do not qualify as
requests for an Electricity Consent, but rather as requests for other services and have been
forwarded to the relevant departments, whereas 30 requests of applicants are in process of review.
106
ANNUAL REPORT 2017
The chart below shows an increase in the number of customers’ requests for electricity consents.
Request for EC by years
1400
1200 1156
1000
804
800 738
600 549
400
200
0
2014 2015 2016 2017
Fig. 5.34 Requests for Electricity Consents for the period 2014 – 2017
5.8.3.3 Customer complaints to the supplier - KESCO

Based on the data of KESCO supplier, the total numbers of registered customer complaints during
2017 amounts to 11,350 and 1008 have been transferred from the previous year, whereas 11,359
complaints have been resolved/completed.
Find below the chart of customer complaints registered and resolved for 2017, by districts.
Complaints by districts for January – December 2017

9 ,000 180 ,000
164 ,692
8 ,000 160 ,000
8 3
8 0
7 ,000 4
, 4 140 ,000
6 6
6 ,000 120 ,000
5 ,000 100 ,000

80 ,953
78 ,597
4 ,000 66 ,492 80 ,000
62 ,788
54 ,115 54 ,172
3 ,000 60 ,000
2 ,000 7 4 40 ,000
4 3 9
3 9 3 3 1
, 1
6 7 8 0 1 1 3 3
9 9 2 3 4 3 9 1 8 0
1 ,000 4 2 5 2 6 7 20 ,000
5 5 5 5
0 -
DFE DGJ DGL DMI DPE DPR DPZ
Registered Completed Number of customers 2017
Fig. 5.35 Complaints and number of customers by districts, 2017
The figure above shows that the highest percentage of customer complaints registered with KESCO
during January – December 2017 is in the district of Prishtina with 57.16%, followed by the district
of Peja with 10.02%, whereas the lowest percentage is in the district of Gjakova with 4.78%. It
should be stated that the highest number of complaints in the district of Prishtina mainly result
from the fact that the district of Prishtina has the highest number of customers in Kosovo.
107
ANNUAL REPORT 2017
The highest percentage of customers’ complaints resolved by KESCO compared to the total number
of complaints resolved at the country level is in the district of Prishtina with 56.37%, followed by the
district of Peja with 10.51%, whereas the lowest percentage is in the district of Gjakova and Gjilan
with 4.60%.
Find below the table with the number of customers’ complaints registered and resolved by KESCO
supplier for 2017, by months. Complaints by months January – December 2017
2000
0
2
7
, 6 3
1800 1 0 2
,6 6
1 7
1 2 0
1600 3 5
4 1
,
1
1400
0 9
5 2 8
1 1 8
1200 1 1 0
1
6
3 8
1000 9 7 7 0
8 5 3
8 8 6
0 5 2 3 0
3 7 9 9 0 5 1
800 7 6 6 2 6
4 7 8
6 7
6 8 9 3 6 3
8 5 6 8
5 5 5
600
400
200
0
January
Fig. 5.36February Marchcomplaints
Customers’ April inMay
KESCOJune July for the
by months August
periodSeptember
JanuaryOctober November
- December December
2017
Registered Resolved
Based on data, the highest percentage of customer complaints resolved compared to registered
complaints for 2017 was recorded in the district of Mitrovica (resolved/registered complaints ratio)
and the district of Gjilan with 94.40%. It should be stated that in some districts there is a higher
percentage than 100% because in addition to registered complaints of that period, the districts
managed to review and resolve even some complaints transferred from the previous year.
The figure below presents the number of registered and completed complaints by the nature of
complaints for the period January – December 2017.
Complaints by nature, January – December 2017

3 ,000
2752
2458
2 ,500 2338 2314
2153
2 ,000
1681
1617
1553
1 ,500 1386 1376
1 ,000
671 702
477
500 424
171 158
99 97 76 84 63
23 18 18
0
B1 B2 B3 B4 B5 B6 B7 B8 B9 B 10 B 11 B 12
Registered Completed
Fig. 5.37 Customers’ complaints by nature for the period January - December 2017
108
ANNUAL REPORT 2017
Find below descriptions of complaints’ nature:

B1 - Unregistered payment
B2 - Error in initial balance
B3 - Invoice is not taken
B4 - Over the limit
B5 - Change of the lump sum
B6 - Incorrect reading
B7 - Irregular reading
B8 - Inaccurate meter
B9 - Request for debt settlement
B10 - Charged with VAT
B11 - Loss recovery
B12 - Others
According to KESCO data, in 2016, the registered customers' complaints which have been
associated with errors in reading the meter (incorrect and irregular reading) were 3,955 or in
percentage 34.85% of total customers' complaints submitted, while in 2016 the number of
complaints that have been associated with errors in reading the meter was 4,504, and 5,312 in
2015. This clearly shows that the number of customers' complaints regarding errors in reading the
meter is in constant fall due to the reading of metering point by way of Hand Held Unit, which has
significantly improved the read of meters and decreased the possibility for errors when reading the
meter.
Find below the figure with data on complaints resolved by KESCO for the period January –
December 2017, or more precisely the status of resolved complaints.
Status of resolved complaints January

- – December 2017
6048
5311
Approved Rejected
Fig. 5.38 Status of customers’ complaints resolved for the period January - December 2017
The figure above shows that KESCO, from 11,359 resolved customers’ complaints, approved 6,048,
or 53.24%, complaints in favour of customers, whereas rejected 5,311 complaints or 46.76%.
Find below the customers’ complaints submitted to KESCO/customers number ratio by months.
109
ANNUAL REPORT 2017
Tab. 5.28 Complaints/number of customers’ ratio by months for 2016
Customers Complaints/cust
Month Complaints
number omer ratio
January 1,720 537,765 0.32%
February 1,606 539,767 0.30%
March 1,432 541,481 0.26%
April 936 542,809 0.17%
May 878 545,019 0.16%
June 730 547,028 0.13%
July 756 549,139 0.14%
August 692 551,456 0.13%
September 559 553,637 0.10%
October 646 556,035 0.12%
November 685 558,818 0.12%
December 710 561,809 0.13%
Total 11,350 6,584,763 0.17%
Based on the data reported by the KESCO supplier, the number of requests registered during 2017
is 11,350, which represents 2.02% of total customers, namely 0.17% compared to the total number
of annual receipts.
Total number of customers’ complaints registered in 2017 was 11,350, in 2016 was 11,180, in 2015
was 12,926, whereas in 2014 was 17,655, as presented in the figure below.
110
ANNUAL REPORT 2017
Complaints by years
20,000
17,655
18,000
16,000
14,000 12,926
11,896 11,180
12,000 11,350 11,359
10,896 10,974
10,000
8,000
6,000
4,000
2,000
0
2014 2015 2016 2017
Registered Resolved
Fig. 5.39 Customers’ complaints in KESCO, by years
111
ANNUAL REPORT 2017
6 THERMAL ENERGY SECTOR

Thermal energy sector in Kosovo consists of four systems: DH Termokos – Prishtina, DH Gjakova –
Gjakove, DH Termomit – Mitrovica, and DH in Zvecan. This sector has a fairly limited extent locally,
fulfilling 3 - 5% of total heating demand in Kosovo.
6.1 Main developments in the thermal energy sector
6.1.1 Developments in DH Termokos
The qualitative and stable supply of thermal energy over the recent years has increased interest for
a he wider inclusion of potential customers from the city of Prishtina into the DH Termokos system.
In this regard, during 2017, the preparatory phase of the project for expansion, rehabilitation of
network and modernization of constituent equipment was carried out, including the tendering
phase for execution and supervision of construction and installing works.
Main project components:
- Rehabilitation of existing network – replacement of 3.4 km pipelines;
- Expansion of network – new network/pipeline 3.6 km;
- Installation of 153 thermal substations – for 103 existing substations, the complete replacement
of existing equipment with new equipment and 50 new substations (where the network is
expanded);
- Installation of 100 controlling valves of differential pressure.
This project, estimated to be € 8.8 mil., will be funded mainly by a donation of the European
Commission in the amount of € 8.3 mil., whereas the Municipality of Prishtina is expected to
participate with a significantly smaller amount (€ 250,000), and a small amount (around € 250,000)
as self-funding by DH Termokos.
Also, the project supported by KfW for rehabilitation and expansion of existing network, and also
the rehabilitation – modernization of substations, is at the preparatory phase. This project is
foreseen to amount to € 10 mil. (by phases: € 5 mil. + € 5 mil.), which are funds committed as a
donation from Germany, Luxembourg and Sweden, to be allocated and managed through KfW.
During 2017, within the support from German Government through KfW, the Master Plan for
development of DH Termokos network/system has been prepared, whereby thoroughly elaborating
the development of DH Termokos network – network expansion and expansion of costumer
base/increase of heating surface, additional production capacities (in particular cogeneration).
The US MCM Programme (“Millennium Challenge Corporation”), signed in September 2017,
foresees the component of installing thermal energy meters for customers of DH Termokos, aiming
to transfer into the billing based on the consumption measurement, thus allowing for efficient
thermal energy use.
112
ANNUAL REPORT 2017
It is worth mentioning that in April 2017, the project for reconstruction and modernization of 50
substations of distribution thermal energy network has been successfully completed. This project,
which is mainly funded by the German Government through KfW, enabled significant improvement
of thermal energy supply quality in several parts with poorer quality, and also affected the
reduction of thermal energy losses.
6.1.2 Developments in DH Gjakova – Change of fuel and cogeneration project
Regarding DH Gjakova, initially it must be emphasized that despite the financial difficulties in
supplying of sufficient quantities of fuel - heavy oil, thanks to subsidies from Kosovo budget, DH
Gjakova managed, in early November 2017, to start generation and supply customers with thermal
energy.
With regards to the project for the new district heating with biomass of the DH Gjakova, it is worth
mentioning that the development of project continued during 2017; specifically it has been
preceded with the tendering phase for executing and supervising construction and installing works.
This project in the amount of € 12.5 million is financially supported by the European Commission –
Office in Kosovo through IPA-2015 funds.
The main project components for the construction of new district heating with biomass are:
 2 units generating only thermal energy: with capacity 7 MWTH and 2 MWTH;
 The third unit is foreseen to be a cogeneration of thermal energy and electricity, with a capacity
of 8 MWTH and 1.57 MWEL;
 Installations of relevant equipment of new district heating and connection to the distribution
network of thermal energy, namely electricity.
6.2 Technical characteristics of thermal energy systems
Thermal energy sector in Kosovo consists of 4 district heating systems, with an installed capacity
considered to be around 332 MWTH. District Heating of Termom and Zveçan, due to notorious
circumstances, have not responded to requirements for licensing/regulation and monitoring of ERO,
thus making impossible to ensure relevant updated data; to this end, find below detailed data on
DH Termokos and DH Gjakova.
6.2.1 Generation plants
Thermal energy generation plants of DH Termokos consist of main district heating with a total
installed capacity of 120 MWTH, and auxiliary district heating in the University Clinical Centre with a
capacity of 14 MWTH. Upon the connection of the thermal energy extraction station in B1 and B2
units of TPP Kosova B, the installed capacity of cogeneration of 140 MWTH was added to this
capacity. It should be mentioned that boilers with heating fuel in DH Termokos have not been
decommissioned, but they will serve as reserve capacities to be activated in cases of possible failure
in TPP Kosova B units.
113
ANNUAL REPORT 2017
District heating of the city of Gjakova consists of two boilers with heavy oil, with a total installed
capacity of 38.6 MWTH – one with generating capacity of 20 MWTH and the other with capacity of
18.6 MWTH.
6.2.2 Thermal energy distribution systems
Thermal energy distribution systems in Kosovo consist of primary distribution network which
extends until the point of supply in substations, and secondary network, which extends from supply
point in substations, to the final users.
Primary distribution network of DH Termokos has a length of around 38.5 km. An integral part of
the distribution network is also the pump and heat exchangers station located at Bregu i Diellit and
385 active substations which are dividing points between the primary and secondary network.
In addition to the existing distribution network, the network for transporting thermal energy
between TPP Kosova B – DH Termokos has been constructed in 2014, in a length of around 10.5 km.
Primary distribution network of DH Gjakova has a length of around 13.5 km. This network consists
of around 175 active substations, which are dividing points between the primary and secondary
network.
A summary of the technical characteristics of district heating systems of DH Termokos and DH
Gjakova is shown in the following table.
Tab. 6.1 Technical data of district heating systems
Installed capacity Operational capacity Distribution network
Company (city)
[MW] [MW] Length of netw. [km] No. of substations
2 x 58 = 116 2 x 58 = 116
2 x 7 = 14 2 x 7 = 14 347
TERMOKOS
2 x 0,81 = 1.62 1x4=4 36.5 (324 active)
(Prishtina)
1x4=4
2 x 70 = 140 [Cogeneration] 2 x 70 = 140
Sub-total 275.6 274.0 36.5 347
DH GJAKOVA 1 x 20 = 20 1 x 20 = 20 13.5 300
(Gjakove) 1 x 18.6 = 18.60 (251 active)
Sub-total 38.6 20.0 13.5 300
Total 314.2 294.0 50.0 647
6.3 Performance of district heating companies
In 2016/2017 season, DH Termokos continued with the production and stable supply of thermal
energy, providing 24h uninterrupted electricity supply, which mainly results from the
implementation of cogeneration project, and rehabilitating projects as well.
Regarding DH Gjakova, it should be mentioned that thanks to subsidies from the Kosovo
Government and financial assistance from Gjakova Municipality, it has managed in 2016/2017
season to launch the generation and supply of thermal energy. However, due to financial limitations
DH Gjakova, has been forced to cut the heating season for about 3 months (December 2016 –
February 2017). In addition, it has provided with daily supply cuts, what has significantly reduced
114
ANNUAL REPORT 2017
the heating space, i.e. the number of customers, focusing on customers who regularly paid bills and
in the network areas where there was less thermal energy loss.
6.3.1 Production, supply and losses in DH Termokos
- Thermal energy production

DH Termokos bases the production of thermal energy on cogeneration plants in TPP Kosova B; in
fact, in 2016/2017 season, the entire thermal energy production was from cogeneration plants in
TPP Kosovo B, so the activation of boilers with heating oil in DH Termokos was unnecessary.
The amount of thermal energy extracted from cogeneration in 2016/2017 season was 225,438
MWhTH. The amount of thermal energy received in the heat exchange station in DH Termokos was
221,058 MWhTH. It should be noted that this represents an increase of around 13.5% compared to
the production of the previous season.
Summarised data of thermal energy production from cogeneration is presented in the following
table:
Tab. 6.2 Production of thermal energy from cogeneration
Thermal energy from cogeneration – DH Termokos, 2016/2017 season
Extracted the. en. (measured in Received the. en. (measured in DH

Month Unit
TPP Kosova B)/Gross Production Termokos)/Net production
October 2016 MWhTH 13,499 12,801

November 2016 MWhTH 33,966 33,392
December 2016 MWhTH 45,031 44,500
January 2017 MWhTH 50,119 49,211
February 2017 MWhTH 35,351 34,903
March 2017 MWhTH 30,239 29,600
April 2017 MWhTH 17,233 16,651
Total MWhTH 225,438 221,058
- Thermal energy supply

DH Termokos, in 2016/2017 season has marked a significant improvement in quantity and quality of
the thermal energy supply, which is mainly due to continuous improvements in the thermal energy
production, as well as the maintenance and repairs of the network.
Customers’ supply with thermal energy (central heating), in this season was considered to be
196,462 MWhTH, which represents an increase of 31,493 MWHTH or around 19% compared to the
previous 2015/2016 (164,969 MWhTh) season. Such supply is quite satisfactory and fulfilled the
plans and objectives for a sufficient and qualitative supply.
- System losses
Upon the integration of thermal energy from cogeneration, DH Termokos district heating system
has its own specifics as regard to the system losses. Therefore, system losses include two
components: losses in transmission network from TPP Kosova B- DH Termokos and losses in primary
distribution network.
115
ANNUAL REPORT 2017
Losses in the transportation network of thermal energy TPP Kosova B- DH Termokos in a length of
10.5 km are determined from the measurements carried out in the heat exchange station (thermal
energy production station) in TPP Kosova B and in heat exchange station in DH Termokos. Based on
the measurements carried out for the period October 2016 – April 2017, the quantitative losses in
this period amount to 4,380 MWhTH namely 1.94%. Details on losses in the thermal energy
transmission network are given in the following table.
Tab. 6.3 Losses of thermal energy in transmission network TPP Kosova B – DH Termokos
Electricity and losses 2016/2017 October November December January February March April Total
Extracted Thermal Energy - measured
13,499 33,966 45,031 50,119 35,351 30,239 17,233 225,438
in TPP Kosova B [MWh]
Received Thermal Energy – measured in
12,801 33,392 44,500 49,211 34,903 29,600 16,651 221,058
DH Termokos [MWh}
Losses in energy quantity [MWh] 698 574 531 908 448 639 582 4,380
Losses in [%] 5.17% 1.69% 1.18% 1.28% 1.46% 1.30% 1.30% 1.94%
Losses in primary network of thermal energy distribution are normally determined by the metering
of thermal energy at the entrance of distribution network and from thermal energy supply in
customers substations. But, due to the lack of total measurement of supplied thermal energy
quantity (in substations), several approximations for the calculation of supply were done, first using
parameters such as, specific demand for heating capacity (W/m2) and full load hours, namely
specific consumption (kWh/m2). The estimated consumption value is 196,462 MWhTh. By
subtracting this consumption value from thermal energy brought into the distribution network
(220,108 MWhTh) it results that quantitative losses in distribution network for 2016/2017 season are
23,646 MWhTh, which in percentage are 10.74%.
Table below present summarised data on total production, supply and losses in system:
Tab. 6.4 Energy performance in DH Termokos – 2016/2017 season
DH Termokos - Heating season 2016-2017
Description Unit Value

Gross production in heating plants [MWhth] 0.00
Gross generation in cogeneration plants [MWhth] 225,438.00
Quantitative loss in transport network (TPP Kosova B - DH Termokos) [MWhth] 4,380.00
Losses in percentage in transport network [%] 1.94
Own consumption [MWhth] 950.00
Thermal energy net production [MWhth] 220,108.00
Quantitative losses in distribution network [MWhth] 23,646.00
Losses in percentage in distribution network [%] 10.74
Customer supply with thermal energy [MWhth] 196,462.00
116
ANNUAL REPORT 2017
6.3.2 Production, supply and losses in DH Gjakova
- Thermal energy production

DH Gjakova bases thermal energy production on heating boilers with heavy oil. As stated above,
during 2015/2016 season thermal energy production was quite reduced – gross production has
been 6,699 MWhTH, while net production of thermal energy was 6,249 MWhTH. For the production
of this season 847 t of fuel oil have been spent. It should be noted that, according to the company
reported data, there has been a low thermal and heating efficiency of around 70%.
- Heat supply
During 2016/2017 season, DH Gjakova offered a reduced supply, as a consequence of season
dimidiation and reduction of heating surface. The customer’s supply with thermal energy for this
season was 4,687 MWhTH, an amount that does not nearly cover the customer demand for heating
who are connected in the DH system of Gjakova.
- System losses
With regard to the losses in thermal energy production, it must be initially noted that, because
several measurements are lacking i.e. are considered as not very reliable due to the age of
equipment, the determination of losses also includes several pre-assessed parameters, e.g.
efficiency of boilers and the value of own consumption. The boilers efficiency for thermal energy
production has been assessed to be very low around 70%, which causes significant losses during the
process of transforming fuel energy into thermal energy, which is assessed to be 2,872 MWhTH.
Losses in primary distribution network are calculated as differences between the amount of thermal
energy brought into distribution and supply/consumption network. In absence of metering the
amount of supplied thermal energy (in substations), for the calculation of the supply some
approximations were made by using primarily the parameters such as: specific demand for heating
capacity (W/m2) and hours of full load namely specific energy consumption (kWh/m2). Thus, the
estimated value of consumption is 4,678MWhTh. By subtracting this value of consumption from the
amount of thermal energy brought into the distribution network (6,249 MWhTh) it turns out that the
quantitative losses in the distribution network for 2016/2017 season are 1,571 MWhTh, which in
percentage are 25%.
Table below presents aggregate data on total production, supply and losses.
Tab. 6.5 Energy performance of DH Gjakova
117
ANNUAL REPORT 2017
DH Gjakova – Heating season 2016-2017
Description Unit Value

Fuel quantity – heavy oil [ton] 847.00
Calorific value [MWhth/ton] 11.30
Energy entered from fuel – heavy oil [MWhth] 9,571.10
Boilers efficiency [%] 70.00
Thermal energy gross production [MWhth] 6,699.77
Own consumption [MWhth] 450.00
Thermal energy net production/Energy entered in distribution network [MWhth] 6,249.77
Quantitative losses in distribution network % 1,562.00
Losses in percentage [MWhth] 25.00
Customer supply with thermal energy [MWhth] 4,687.00
6.4 Overall production, supply and losses of thermal energy
The following table presents the summarized data on production, supply and losses in the system
for the entire sector of thermal energy.
Tab. 6.6 Energy performance of thermal energy sector – 2016/2017 season
Thermal Energy Sector - 2016/2017 season
Description Unit DH Termokos DH Gjakova Total

Thermal energy gross production [MWh th] 225,438 6,700 232,138
Losses in transport network [MWh th] 4,380 0 4,380
Losses in percentage in transport network [%] 1.94 0.00 1.94
Own consumption [MWh th] 950 450 1,400
Thermal energy net production [MWh th] 220,108 6,250 226,358
Quantitative losses in distribution network [MWh th] 23,646 1,562 25,208
Losses in percentage in distribution network [%] 10.74 25.00 11.14
Customers supply with thermal energy [MWh th] 196,462 4,687 201,149
6.5 Billing, collection and heating surface
6.5.1 Billing and collection
With regard to the billing, initially should be noted that during the 2016/2017 season as well the
billing of thermal energy customers was mainly based on heating surface (per square meter).
Although billing based on consumption marked an increase compared to the previous season (from
51 to 97 customers), the number of customers billed based on metered thermal energy
consumption is limited to around 97 customers, mainly commercial and institutional ones.
118
ANNUAL REPORT 2017
In the 2016/2017 season, DH Termokos has marked an increase in billing compared to the previous
2015/2016 season, which is mainly as consequence of continuous improvement of supply. Actually,
the billing for 2016/2017 season was € 5,970,336, which is an increase of € 501,392 compared to
the 2015/2016 season (5,468,944 €). However, even in this season the planned level of billing has
not been achieved mainly because of: i) Deductions in billing due to the days without heating and
due to the poor supply quality (in several neighbourhoods of Prishtina); and ii) reductions in heating
surfaces after field verification.
As a result of increased billing, the collection as monetary amount marked an increase compared to
the previous season – in 2016/2017 season the collected amount was € 3,950,382, while the
collected amount in 2015/2016 season was € 3,771,663, which represents an increase of € 178,719
or 4.52%. Conversely, if we refer to the collection percentage, in this season is noticed a small
decrease in the percentage of collection compared to the previous season – in 2016/17 season the
percentage of collection was 62.24%, while during the 2015/16 season the percentage of collection
was 63.86%, which represents a decrease of 1.62%. However, as noted from the table and diagram
below, upon the commencement of cogeneration, the collection has constantly increased.
With regard to the DH Gjakova, as stated above, during the 2016/2017 season, a reduced supply
was offered due to the dimidiation of heating season and reduction of heating surface.
Subsequently, billing in this season was quite small – € 242,069, whereas collection amounted to €
190,993, which represents a very high collection rate of 79%.
Details regarding billing and collection are shown in the following table and graph.
Tab. 6.7 Billing and collection –2016/2017 season
Heating season Heating Participation in Billing Collection including Level of

2016/2017 2 percentage Including VAT *€+ TVSH *€+ collection [%]
surface [m ]
DH "Termokos" Prishtina
Household 681,197 57.54% 2,963,185 1,379,704 46.56%

Commercial and institutional 502,752 42.46% 3,384,745 2,570,678 75.95%
Total 1,183,949 6,347,930 3,950,382 62.23%
DH "Gjakova" Gjakove
Household 27,215 37.83% 77,106 61,325 79.53%

Commercial and institutional 44,718 62.17% 164,963 129,668 78.60%
Total 71,933 242,069 190,993 78.90%
119
ANNUAL REPORT 2017
DH Termokos 2016/2017 DH Gjakova2016/2017
Collection 3,950,382 € Collection 190,993 €
Collection level Collection level

62.23% 78.90%
Billing 6,347,930 € Billing 242,069 €
Fig. 6.1 Billing and collection of DH Termokos and DH Gjakova – season 2016/2017
6.5.2 Heating surface
DH Termokos, in 2016/2017 season, had a total customer heating surface of 1,235,382 m2, which
represents an increase of 59,767 m2 or around 5% compared to the heating surface in 2015/2016
season (1,175,615 m2).
While DH Gjakova, due to the above mentioned reasons, in 2016/2017 season significantly reduced
the heating surface in just 71,933 m2.
Graphs presented below show the heating surface for DH Termokos and Gjakova, divided by the
customers groups.
2
DH Termokos- - Heating surface [m ] DH Gjakova- Heating surface [m ]
2
681,197 44,718
58% 502,752 62%
27,215
42% 38%
Household Commercial and institutional Household Commercial and institutional
Fig. 6.2 Heating surface by groups of customers in 2016/2017 season
120
ANNUAL REPORT 2017
7 NATURAL GAS SECTOR
7.1 Development perspective of natural gas sector in Kosovo
Despite the fact that currently in Kosovo there is no functional infrastructure and natural gas
market, the Assembly of Kosovo, in order to create the perspective for development of natural gas
sector and fulfil obligations that Kosovo has as a full member in Energy Community Treaty, in June
2016 has adopted the Law No. 05/L-082 on Natural Gas within the energy laws package.
Law on natural gas lays the foundations of legal and regulatory framework for the transmission,
distribution, storage and supply with natural gas and the operation of gas transmission and
distribution systems. Consequently, this law determines the organization and functioning of the
natural gas sector and access to networks and gas market.
Kosovo Energy Strategy 2017-2026 (adopted by the Assembly of Kosovo on 26 January 2018)
included in Objective 4 the Natural Gas Development Infrastructure through the connection with
gas infrastructure projects in the region of Southeast Europe, especially with the TAP pipeline
project (“Trans-Adriatic-Pipeline”) and gas ring of Energy Community. In this regard, it should be
emphasized that a gasification project, namely the development of gas infrastructure is ranked in
the priority infrastructure projects – area of energy, approved by the National Council for Investment
and the Government of Kosovo.
The TAP pipeline project is considered to have a positive impact on the development of gas
infrastructure in the Energy Community, namely Southeast Europe region, by providing
opportunities to connect the planned regional projects as Ionian – Adriatic Pipeline and ALKOGAP,
where both these projects supplement the so-called ‘Gas Ring of Energy Community’.
TAP is currently in the construction phase (it started in the beginning of 2016), and in 2019 is
planned to start with the first gas flows through TAP, while in 2020 is expected the full operation of
TAP pipeline. TAP’s initial capacity is planned to be 10 billion cubic meters (bcm) per year, with the
possibility of increasing up to 20 bcm per year. TAP will allow interconnections along pipeline to
supply with gas other regional projects. Thus, state agreements with “host countries” (Greece,
Albania and Italy) have pre-defined connection sites and quantities, namely gas capacities.
7.1.1 Project: Albania – Kosovo Pipeline (ALKOGAP – “Albania-Kosovo Gas Pipeline”)
The connection of Kosovo through Albania with TAP projects namely IAP is regarded as a favourable
option. In this way Kosovo jointly with Albania have applied with a joint project for natural gas to be
included in the list of projects of Energy Community interest (PECI). Gas supply is expected to be
done by the TAP pipeline directly or through IAP pipeline. The project proposal has been jointly
developed, including specific data and information for both countries. As following figure shows,
this project represents a deviation from the original concept”.
121
ANNUAL REPORT 2017
Fig. 7.1 Regional Gas Infrastructure Projects and options for Kosovo's connection (including ALKOGAP)
7.1.2 ALKOGAP project details
This project, with total length of 260 km, aims to create a new route to supply natural gas from the
Middle East and the Caspian Region, through the TAP pipeline, towards the northern zone of
Albania, Kosovo and beyond to other countries in the region.
The pipeline route will be assessed in two scenarios:
1. Lezha - Prishtina: This scenario pre-assumes that IAP pipeline project advances in the
implementation phase and is supplied through this pipeline;
2. Fier - Lezha - Pristina: This scenario will be considered in case there will be no progress in the
implementation of IAP; this case foresees the direct supply of gas through TAP pipeline.
The project would create preconditions for the establishment and further development of the
natural gas markets of Albania and Kosovo in the anticipated annual level of 2 bcm (1- 1.3 bcm for
Albania and Kosovo 0.5-0.7 bcm). The project cost is estimated to be around € 200 million.
Current status of ALKOGAP project

After the evaluation of the Working Group of Energy Community on "PECI", according to the
evaluation criteria, the project is eligible for the "PECI" list, which is approved by the Ministerial
Council of the Energy Community in 2016.
Albania and Kosovo have also jointly applied to WBIF – “Western Balkans Investment Framework”
for financial support for ALKOGAP project, and WBIF steering committee decided to allocate 300
thousand Euros from the WBIF’s platforms to prepare the prefeasibility study. The leading financial
institution is the European Bank for Reconstruction and Development (EBRD). During the second
half of 2017, Terms of Reference have been drafted to prepare the prefeasibility study, which is
expected to commence in the first half of 2018.
122
ANNUAL REPORT 2017
It should be mentioned that ERO, in cooperation with MED, provided relevant inputs with regards
to the drafting of the project proposal for ALKOGAP project, as well as the work of the Working
Group of Energy Community for “PECI”. ERO also actively participates in the work of the Energy
Community, more specifically in Gas Working Group of Regulatory Board of the Energy Community
and Gas Forum.
123
ANNUAL REPORT 2017
ERO addresses
Energy Regulatory Office
Street: Dervish Rozhaja no. 12
Prishtina 10000, Kosovo
Tel: +381 (0) 38 247 615
Fax: +381 (0) 38 247 620
Email: info@ero-ks.org
Web: www.ero-ks.org
Energy Regulatory Office Board:

Tel: +381 (0) 38 247 615 ext. 101
Secretary:
Tel: + 381 (0) 38 247 615 ext. 104
Department for Consumer Protection:

Tel. + 381 (0) 38 247 615 ext. 116 and 125
Email: ankesa.dmk@ero-ks.org
124

ERO - Annual Report For 2017

Uploaded by

Copyright:

Available Formats

ERO - Annual Report For 2017

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ERO - Annual Report For 2017

Uploaded by

Copyright:

Available Formats

ANNUAL REPORT 2017

Prishtina, March 2018

Address: St. Dervish Rozhaja no. 12, 10000 Prishtina, Kosovo

1 ENERGY REGULATORY OFFICE .................................................................................. 9

4 FINANCIAL REPORTING FOR ERO .................................... Error! Bookmark not defined.

4.1 ERO budget ................................................................. Error! Bookmark not defined.

5 ELECTRICITY SECTOR ...................................................... Error! Bookmark not defined.

6 THERMAL ENERGY SECTOR ............................................. Error! Bookmark not defined.

7 NATURAL GAS SECTOR ................................................... Error! Bookmark not defined.

Tab. I. Comparison of 2017 data and balances to 2016

1 ENERGY REGULATORY OFFICE

1.1 Description of the Energy Regulatory Office

1.2 Organizational Structure and Human Resources

Fig. 1.1 Organizational Scheme of ERO

Tab. 1.1 Organizational structure with the job positions

Legal and Licensing Department (LLD)

1.3 ERO’s Board

1.4 ERO’s Departments

Legal and Licensing Department (LLD)

Energy Market Department (EMD)

Tariffs and Pricing Department (TPD)

Customer Protection Department (CPD)

Thermal Energy and Natural Gas Department (TENGD)

Administration Unit (AU)

1.5 Training of ERO’s staff

 long-term trainings and courses inside the country and abroad;

1.6 Technical Assistance Projects

1.7 Procurement Activities

1.8 ERO funding

ERO collects fees for:

2 ACTIVITIES OF THE ENERGY REGULATORY OFFICE

2.1 Completion of legal and regulatory framework

2.2 Licensing of energy activities

2.2.1 Licensing of electricity supply activity

Electricity supply Neighbourhood Arbëri, Str. Ismail Qemali

Kosovo Energy Electricity supply Str. Nënë Tereza, No.36, 10000

Electricity supply Str. "Adem Jashari" No.280, Hani i

Wholesale supply Str.Luan Haradinaj, B.9 E.17

2.2.2 Licensing of electricity production activity

2.2.3 Modification of licenses

2.3 Renewable Energy Sources (RES)

Tab. 2.3 Targets according to the MED Administrative Instruction

Renewable Energy Sources Targets according to

2.4 Authorization - construction of new capacities

2.4.1 Issuance of preliminary authorization

RES preliminary authorizations No. of decisions issued

Hydro Power Plant 7

2.4.2 Applications under review by ERO

2.4.3 Termination of preliminary authorization

2.4.4 Projects in the process of extending the preliminary authorization validity

Hydro Power Plant HPP Vica, Municipality of

Wind Park, Selac3,

2.4.5 Projects pending of final authorization

N.P.N. Renelual Tahiri HPP Dragash, Municipality

2.4.6 Issuance of final authorization

2.4.7 Modification of the Final Authorization

2.4.8 Entry into operation of generators from RES

Fig. 2.1 Images from the HPP Brezovica facility

2.5 Monitoring the construction of new generating capacities