Carbon costs for planned coal power plants in the Western Balkans and the risk of stranded assets

Briefing | March 29, 2017

This briefing analyses ten coal-fired power plant projects across the Western Balkans and finds that, once the cost of carbon emissions allowances are factored in, they could become a serious liability for both the companies involved and the public.

Promoters of new coal projects, primarily state owned utilities, have so far overlooked these extra costs. For example, the feasibility study summary for Serbia’s Kostolac B3 plant explains that carbon costs had been left out on the assumption that they would be covered by the state. In practice, however, state aid rules that apply to Serbia as a signatory to the Energy Community Treaty forbid this kind of payment.