TIRANA, Sept. 1 – Almost two years after the launch of an aggressive nationwide campaign to tackle massive electricity thefts and collect accumulated unpaid bills, grid losses in the now state-run electricity distribution system have considerably dropped but still remain high, accounting for almost a third of electricity fed into the grid.
Grid losses in the Albanian distribution network, which still remains dilapidated despite increasing investment, dropped to 29 percent in the first half of this year, down from 31.2 percent during the same period last year, according to state statistical institute, INSTAT.
Back in 2015, grid losses dropped to 30 percent compared to 35 percent in 2014 when a nationwide campaign was launched and a record high of 40.8 percent in 2012 just before Czech company CEZ had its Albanian distribution operator licence revoked in early 2013.
Yet, the launch of a nationwide campaign in late 2014 and the collection of millions of euros in accumulated unpaid bills by both household and business consumers has turned state-run OSHEE distribution operator into one of the country’s most profitable enterprises.
OSHEE registered profits of about 14.9 billion lek (€106 mln) in 2015 following losses of 4.5 billion lek (€32 mln) in 2014 and a record high of 27 billion lek (€192 mln) in 2013 when the company was taken back under state administration following a failed privatization by Czech Republic’s CEZ.
About 115,000 Albanian households continue paying monthly instalments of about 2,500 lek (€18) as part of their accumulated unpaid debts since late 2014 when a nationwide campaign was launched to tackle massive power thefts and accumulated unpaid bills. The number corresponding to about 16 percent of the country’s resident households, has also considerably affected domestic consumption and is expected to continue having a negative impact in the next few years. Huge and unaffordable debts also forced many debtor consumers to seek asylum to EU countries in 2015 when a record 65,000 Albanians left the country, mainly to Germany.
Last year also registered a significant increase in those sentenced for electricity thefts following legal changes making power thefts punishable by up to three years in prison.
The General Prosecutor’s Office says some 2,115 people were sentenced for electricity thefts in 2015 compared to only 561 in 2014.
Albania’s state-run electricity sector continued improving in the first half of this year when the country’s hydro-dependent system slightly increased domestic production and cut reliance on imports.
Private and concession hydropower plants contributed by 31.6 percent of domestically produced hydropower in the first half of this year, up from about a quarter during the same period last year.
Small private and concession hydropower owners have recently voiced concern over some new legal changes the government is undertaking which they claim have increased insecurity among foreign and Albanian investors and warned of initiating arbitration proceedings over what they call “unilateral violation of contracts” no longer guaranteeing the sale of their total production.
Businesses cut electricity consumption by an annual 5.2 percent in the first half of this year, reconfirming the difficulty private enterprises are facing as credit failed to return to positive growth rates and some key enterprises such as Kurum steelmaker are struggling to escape bankruptcy. Business consumers have been facing higher electricity prices starting January 2015.
At Euro 11.6 per 100 kWh (VAT included), household electricity prices were already higher than in eight out 38 European countries in Albania at the end of 2014 just ahead of a new hike, according to a report published by Eurostat, the statistical office of the European Union.
Albania’s GDP per capita, a measure of economic activity, and the actual individual consumption, an indicator of the material welfare of households, ranks among the poorest in Europe, at almost a third of the EU 28, according to the latest Eurostat data.
