Kostolac power station

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Kostolac power station is an operating power station of at least 1010-megawatts (MW) in Kostolac, Braničevo, Serbia with multiple units, some of which are not currently operating.

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Kostolac power station	Kostolac, Kostolac, Braničevo, Serbia	44.723674, 21.171605 (exact)

The map below shows the exact location of the power station.

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Unit-level coordinates (WGS 84):

• Phase A Unit 1, Phase A Unit 2: 44.723674, 21.171605
• Phase B Unit 1, Phase B Unit 2: 44.730686, 21.211403
• Phase B Unit 3: 44.72954, 21.212146

Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year	Retired year
Phase A Unit 1	operating	coal: lignite	100	subcritical	1967	2028 (planned)
Phase A Unit 2	operating	coal: lignite	210	subcritical	1980	2028 (planned)
Phase B Unit 1	operating	coal: lignite	350	subcritical	1987	–
Phase B Unit 2	operating	coal: lignite	350	subcritical	1991	–
Phase B Unit 3	construction	coal: lignite	350	supercritical	2024 (planned)	–

Table 3: Unit-level ownership and operator details

Unit name	Owner	Parent
Phase A Unit 1	Elektroprivreda Srbije Beograd AD [100%]	Elektroprivreda Srbije Beograd AD [100.0%]
Phase A Unit 2	Elektroprivreda Srbije Beograd AD [100%]	Elektroprivreda Srbije Beograd AD [100.0%]
Phase B Unit 1	Elektroprivreda Srbije Beograd AD [100%]	Elektroprivreda Srbije Beograd AD [100.0%]
Phase B Unit 2	Elektroprivreda Srbije Beograd AD [100%]	Elektroprivreda Srbije Beograd AD [100.0%]
Phase B Unit 3	Elektroprivreda Srbije Beograd AD [100%]	Elektroprivreda Srbije Beograd AD [100.0%]

Project-level coal details

• Coal source(s): Drmno mine, Drmno mine, Cirikovac mine, Klenovnik mine

Background on Kostolac A and B

Kostolac A consists of one 100 MW unit and one 210 MW unit, commissioned in 1967 and 1980, respectively.

Kostolac B comprises two 350 MW units, B1 and B2, commissioned in 1987 and 1991.

In October 2020, Elektroprivreda Srbije began a feasibility study surrounding the potential modernization and operational extension of Kostolac A. The company was evaluating the economic viability of keeping the units online until 2038. As of July 2022, those plans appeared scrapped. Instead, they may instead opt for an early retirement for Kostolac A, in line with the National Energy Climate Plan.

In November 2022, the Higher Court in Belgrade ruled in favor of the Renewables and Environmental Regulatory Institute (RERI), ordering that Elektroprivreda Srbije must cut sulphur dioxide emissions at its coal power plants. Kostolac power station was among those impacted. The court utilized medical evidence stating that sulphur dioxide can cause respiratory and cardiovascular diseases. The lawsuit was filed by RERI in January 2021.

In February 2023, EPS announced that Kostolac A will be shut down by the end of 2028.

Kostolac A and B produced 6,136GWh in 2022.

Coal source

An Elektroprivreda Srbije (EPS0 subsidiary, OPM Kostolac, currently operates three open-pit mines -- the Drmno mine, the Cirikovac mine and the Klenovnik mine -- which supply the Kostolac A and B power plants.

As of February 2024, the Kostolac B plant was planned to source coal from the Drmno Coal Mine, with 3 million tonnes per annum required for the operation.

Kostolac B3 extension project

In February 2010 EPS and China Machinery Engineering Corporation (CMEC) signed a $US1.25 preliminary contract for the redevelopment of the Kostolac Power Plant and the construction of a new 350 MW unit, called block B3. Under the terms of the preliminary contract CMEC will contribute 85% of the cost of the refurbishment of the plant and the installation of sulphur controls. Xinhua News Agency also reported that the project would include expanding the capacity of the Drmno mine to 12 million tons of lignite per year and "the construction of the new block B3, by the turnkey system."

In January 2012, the Export-Import Bank of China approved a US$344 million loan to cover CMEC's 85% portion of construction costs. Of the debt, US$176.31 million will be used for the existing blocks Kostolac B1 and B2; US$130.5 million for the construction of the desulphurisation plant; US$15.86 million for port access on the Danube River; and US$21.96 million for railway infrastructure upgrade.

In 2013 it was reported that construction on the new 350 MW unit at Kostolac would begin the following year, with an estimated completion date of 2019.

In late June 2016, the Serbian Administrative Court ruled the approval of the plant's environmental impact statement by the Ministry of Agriculture and Environmental Protection was illegitimate. According to the ruling, the decision did not contain justification of reasons for not taking the cross-border impact of the new plant on neighboring Romania into account. Serbia might also face a challenge over whether financial guarantees given to the China Export-Import Bank breach restrictions on subsidies.

Although it was reported in Reuters in January 2017 that construction had begun on the project, the new environmental impact assessment for the coal plant has yet to be completed, although a new conveyor system does seem to be being put in place.

A new EIA report was published for consultation in February 2017. Public hearings are planned for March 2017. The EIA report was approved in September 2017.

On November 23, 2017, the Serbian government announced for the third time that construction would begin on the unit, now planned for operation in 2020. In response, environmental groups requested the building permit. According to Bankwatch, the only document disclosed was a permit for the B3 chimney (not for the whole plant) and was dated July 2017, before the environmental assessment was approved.

As of November 29, 2017, the plant's EIA is being challenged in court, and the Integrated Pollution Prevention and Control permit has not been issued, although it may be issued after construction. The Drmno coal mine is also being challenged. According to the NGO Bankwatch: "There have been no environmental and social impact assessments of expanding the Drmno mine that will feed the power plant, and the local community’s request to be relocated from the mine borders has not been taken into account. The project is also not in line with the latest pollution standards adopted this year by the EU." In September 2018, the Centre for Ecology and Sustainable Development (CEKOR) and CEE Bankwatch Network submitted a formal complaint to the Energy Community Treaty Secretariat, saying the country had failed to require an environmental impact assessment for the expansion of the Drmno mine that would feed the plant.

In April 2019 a construction permit was issued for the turbine and generator. According to Elektroprivreda Srbije, 85% of the needed construction permits have been secured.

In March 2021, with construction work by CMEC under way and scheduled for completion towards the end of 2022, Deputy Prime Minister and Minister of Mining and Energy, Professor Zorana Mihajlovic, met with representatives of the company to warn them about the project's slow pace of construction as well as the quality of the delivered equipment. An announcement on the Ministry of Mining and Energy website quoted Mihajlovic as saying: "The current dynamics and delays with Kostolac B3 project do not benefit anyone. Serbian side is here, we will not stand by and observe the realization of the project, we will work even harder to help you, but you have to invest more effort and work, to make up for the delays, because the realization so far is unacceptable, and there is no compromise on quality."

Planet imagery captured between March 2019 and July 2022 showed evidence of some construction progress.

In October 2022, Elektroprivreda Srbije announced that the construction of B3 was entering its final stages. The unit was slated for commercial operation in September 2023. In November 2022, the last shipment of equipment arrived at the site. The Minister of Mining and Energy said the unit could come online "as soon as" October 2023.

As of September 2023, the plant was undergoing trials. In February 2024, the project was said to be in its final phase. In early November 2024, the commissioning process was reportedly nearing completion.

Fraud investigation

In February 2023, six people associated with the expansion project were arrested for allegedly defrauding Elektroprivreda Srbije of $7.48 million USD. Those arrested were responsible for overseeing construction, and payments were approved for work that was never done.

Financing for B3

Source of financing: US$608 million in debt from China Exim Bank; US$143 million in equity from the Government of Serbia

In December 2014, it was reported that China's Exim Bank would finance the new 350-MW unit through a US$572 million loan. The Government of Serbia will provide US$143 million in equity. In January 2015, the agreement was ratified by the Serbian parliament, with a higher loan amount of US$608 million. The Serbian government took the loan on behalf of EPS, which may have been in breach of the state aid obligations Serbia agreed to under the Energy Community Treaty.

Draft NECP (2023): No New Coal

It was reported in April 2023 that Serbia was soon expected to officially announce its intention to phase out coal as soon as possible or by the end of 2050 at the latest. The obligations to decarbonize and shut down thermal power plants are part of a bill on the ratification of a contract on guarantees for the EUR 300 million loan that Elektroprivreda Srbije secured from the European Bank for Reconstruction and Development (EBRD).

In July 2023, Serbia’s draft National Energy and Climate Plan was on public consultation. As Bankwatch summarized, no new coal plants seemed to be planned after Kostolac B3, but there was no information about the phase-out timetable for existing plants. In November 2023, Energy Community Secretariat released comments and recommendations on the draft NECP. Serbia should present the final draft by June 2024.

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.