Kosovo’s electricity crisis exposes years of neglect and policy missteps

Kosovo has once again found itself grappling with one of its most persistent and damaging problems: an unreliable electricity supply.

Despite years of warnings from the business community and energy experts, successive governments have failed to develop a serious and sustainable agenda for the sector, leaving the country vulnerable to exactly the kind of crisis now unfolding.

According to the Kosovo Chamber of Commerce and Industry (CTIK), the situation has become particularly acute since December 2025, when prolonged and often unannounced load shedding began affecting large parts of the country.

This has come on top of an increase in electricity prices and the liberalisation of the power market implemented last year, measures that were supposed to stabilise supply and improve efficiency but have instead deepened pressure on businesses.

“Despite the 16.1% price increase and the liberalisation of the electricity market that took place last year, businesses—already hit by these decisions—are now suffering from frequent and unannounced power outages,” the chamber said in a recent comment to bne IntelliNews.

Businesses hit 

According to the chamber, the consequences for the private sector have been severe. “Many member companies have complained to us about significant damages,” it said. “Due to the lack of electricity, many businesses have been forced to send workers home.”

The damage goes beyond lost working hours. “Others have suffered losses because much of the machinery used in factories is based on new technologies and is not designed to withstand abrupt power cuts, resulting in costly technical failures,” the chamber noted.

In the manufacturing sector, the impact has been particularly visible. “Some manufacturing businesses had to discard products that were in the process of being produced when the power supply was interrupted.”

Companies that tried to mitigate the problem by relying on generators faced additional costs. “Other companies that relied on generators were forced to purchase fuel derivatives, the prices of which are not low,” the chamber said.

Even when electricity was restored, the problems did not necessarily end. “Many businesses have informed us that even after electricity was restored, it came back either on a single line or at reduced capacity.”

The chamber argues that these difficulties were predictable and that warnings were ignored. “When we opposed the increase in electricity prices and the forced transition of 1,300 businesses to the open market, we stated that a thorough technical assessment of the system’s condition should first be conducted and that discussions should take place with the stakeholders who would be affected by these increases.”

However, it added, “there was no willingness from the Energy Regulatory Office to engage in such a process.”

The chamber links the current crisis directly to this lack of preparation and consultation. “As a result of the absence of these measures, we are now seeing increases in product prices and production costs—both of which are also confirmed by data from the Kosovo Agency of Statistics.”

In this sense, the electricity crisis has become a broader economic problem, adding to inflationary pressures and undermining competitiveness.

Deep technical failures 

The technical side of the crisis has also come into sharper focus in recent weeks. Power cuts resumed after the transmission system operator KOSTT warned that it was facing extraordinary difficulties in maintaining real-time system balance. The problem stems from large discrepancies between nominated electricity volumes and actual consumption.

On January 20, KOSTT said that power supplier KESCO had nominated about 26.17% less energy than was actually consumed. This created an average imbalance of roughly 211 MWh within the KOSTT control area, with some hours exceeding 260 MWh. The operator described the situation as unacceptable, warning that it posed a direct threat to the stability of Kosovo’s power system.

“To maintain safe system operations, load shedding has been implemented as a last resort,” KOSTT said, calling on all operators to ensure that their energy nominations reflect real demand and to make immediate corrections.

In addition, Kosovo’s electricity supplier KESCO said on January 14 that the power system is under extraordinary strain as a surge in consumption has outpaced domestic generation capacity.

Calls for urgent reforms

Against this backdrop, Kosovo Chamber of Commerce and Industry has laid out a broad set of urgent measures that it says are needed to stabilise the electricity sector and reduce pressure on the economy.

“First and foremost, we need fully functioning institutions as soon as possible, along with swift measures to unblock investments in clean energy, which are currently being stalled due to the Public Property Law.”

Kosovo has effectively been without fully functioning institutions for almost a year after Vetevendosje, led by acting PM Albin Kurti, failed to form a government following the February 2025 election. Vetevendosje is expected to form the next government after winning the snap election in December 2025, but the country is still awaiting official results of the vote.

The chamber added that, “there must be a strong commitment to increasing investments in electricity generation, as well as close cooperation with the business community—something that has been lacking in recent years.”

In the short term, the chamber believes fiscal relief could help. “A temporary suspension of certain taxes in selected sectors should be considered in order to help reduce prices.”

On the technical side, the chamber called for a comprehensive overhaul of the grid. This includes “the modernisation and strengthening of substations and distribution lines, automation of the grid, reduction of technical losses, the creation of a compensation fund for damages caused by unannounced power outages, and strict measures against operators who violate regulations and cause frequent interruptions.”

It also demanded accountability. “Rapid investigations should be launched into certain electricity transmission contracts that, according to media investigations, were concluded at exorbitant prices.”

Regional integration is another priority. “Additional cross-border interconnection lines should be developed,” the chamber said, arguing that stronger links with neighbouring systems would improve stability and security of supply.

At the same time, regulatory barriers need to be lowered. “Legal and regulatory reforms are also needed to reduce bureaucracy in the permitting process for self-consumption of electricity, both for the private sector and household consumers.”

The chamber also called for investment in flexibility tools: “Energy storage capacities through batteries should be expanded.”

Gas remains part of its longer-term vision. “The gas agreement should be swiftly reinstated, alongside capital investments that would enable gas to be used for heating and household consumption.”

For households, the chamber urged a rethinking of subsidy policy. “Finally, subsidy schemes should be introduced for household consumers to invest in energy efficiency measures—not in air conditioners or other energy-intensive appliances, but in genuine efficiency improvements.”

Together, the warnings from CTIK and KOSTT paint a picture of a system under severe strain. For businesses, the crisis is no longer just about higher prices, but about reliability, predictability and survival. Without urgent institutional reforms, infrastructure investment and meaningful cooperation between authorities and the private sector, Kosovo’s electricity sector risks becoming an even greater bottleneck for the economy.