Numerous press reports over the last days speak of requests by the main electric energy operators in Albania, OSSH and KESH, for price increases. OSSH (Operatori i Sistemit t롓hp쳮darjes, OSSH) the Electricity Distribution Operator of Albania is the operator who takes care of the distribution of the energy. KESH (Korporata Elektroenergjetike Shqiptare, KESH) is the operator who takes care of the local production of energy as well as the importation and exportation of energy.
“KESH also will ask for the increase of energy prices,” writes Panorama (13.10.2009), informing all that after the request of the OSSH for a substantial increase of energy prices amounting to 23 % for 2010, KESH has also asked to raise the price at which it will sell energy to the OSSH. The increase asked for by KESH is also a substantial one. From 1.6 Albanian Lek per kilowatt/hour, KESH wants to bring the price to 2.5 Albanian Lek per kilowatt/hour, informs Panorama.
But for the moment the price increases asked for by KESH and OSSH are only requests and intentions. If ERE, the Energy Regulatory Entity (Enti Regullator i Energjis묠ERE), approves the increases, they will be effective from March 2010 informs Panorama.
Will life become more expensive?
The Energy Regulatory Entity (Enti Regullator i Energjis묠ERE), may approve the requests such as they are or limit the increases to less substantial amounts. It seems improbable that ERE will not agree to any increase at all, but it looks more probable that these increases will be capped.
Both demands either by OSSH or by KESH represent major changes from the actual prices. OSSH is reported to ask for an increase of 22-23 % of all its prices, while calculations on the price increase requested by KESH manifest an intended increase of 56 % (request for 2.5 Albanian Lek per kilowatt/hour instead of the existing 1.6 Albanian Lek per kilowatt/hour). To what degree they will be capped and how they combine in the pay-bill of the final consumer is yet unknown. But any increase in energy prices is expected to make life in the country more expensive.
Though Albania does not have the profile of an industrial economy, and generally the economy will not suffer to pay more in the production process and produce more expensive products, price increases in energy will touch every small business and family in Albania. Such price increases as asked for, if not capped at levels where the general economy can stand them, may be the cause for life to become more expensive and inflation to become a serious threat.
Job cuts
Besides price increases intended by OSSH, the latest news concerning the company speak of a reorganization that will cut numerous jobs throughout the country. “OSSH, plans for reducing numbers of workers” writes Shqip (12.10.2009) which explains that the energy distribution operator aims to arrive at 3 regional directories from the 12 existing ones. These new directories will cover respectively the north, the center and the south. 76 % of the shares of OSSH, the only Albanian electric energy distribution company, were bought by the Czech energy company CEZ at the beginning of June 2009. The Czech company paid 102 million Euros for the shares and engaged to modernize the Albanian distribution grid with a later investment of 200 million Euros. The remaining 24 % of the shares belong to the Albanian state. As CEZ will invest 200 million Euros in modernizing the power distribution grid, the company will progressively reduce the number of workers. 6400 employees are reported to be working for OSSH and their numbers are expected to fall to 2400 (Shqip, 12.10.2009). The investments by CEZ will aim at installing electronic-operating systems that will reduce the need for human labor which highlights that tests on the actual employees needed have already been carried out. The new technologies that will be adopted will require more qualification and press a need for qualified workers. The number of employees working for the OSSH is considered as “largely abundant” compared to the rate of power consumption in the country.
Power consumption and loss control
The district of Tirana, capital of Albania, is the district that consumes the biggest part of electric energy consumed in Albania, but is at the same time the most problematic district as concerns payment and waste of energy. Data published by ERE (Enti Regullator i Energjis묠ERE) and echoed by Agon (6.09.2009) inform that the district of Tirana consumes 34.2 % of the energy distributed in Albania, pays 81.5 % and counts a total of wastes in the distribution network amounting to 28.6 %. Durr쳠drains 12.9 % of the energy distributed in Albania, pays 74.8 % and counts a total of wastes in the distribution network amounting to 32 %. Fier takes 12.2 % of the distributed energy, pays 85 % and loses 28.9 %. To Shkod철goes 10.3 % of the energy, while payment covers only 72.2 % and losses amount to 44.1 %.
The best-ranging districts as regards payment are the districts of Kor諬 with 97.9 % of the energy paid; Elbasan, 97 % and Gjirokast철94.5 %. Agon reminds that the Czech company (CEZ) which bought the majority of the shares of the Albanian distributing operator (OSSH) has engaged to lower by 17 % losses in the network in a five-year span and to reduce by 1 % each year the amount of non-paid bills. An investment of 200 million US Dollars will be invested in the electric network to increase the overall payment and distribution efficiency.
