Private and concessions HPPs generated around 6.6 billion lek (Euro 46.5 million) in revenues in 2013, up from 2.6 billion lek (Euro 18 million) in 2012.
TIRANA, May 27 – The launch of the Ashta hydropower plants in late 2012 and the operation of several new smaller HPPs, more than doubled electricity generated by private and concession HPPs in Albania, according to a report by energy regulator ERE.
Some 80 private and concession HPPs were involved in electricity generation in 2013 with total installed capacity of 240 MW, of which 40 MW by new HPPs in 2013. Total electricity generation from these HPPs in 2013 reached 759 GWh or 11.1 percent of total domestic generation in 2013, up from 7 percent in 2012.
The Ashta HPP which in 2013 generated around 211 GWh or 28 percent of the total had a major contribution to the total electricity generation in 2013.
The increased electricity generation has also increased the financial burden to state-run KESH power corporation which rose to 6.6 billion lek (Euro 46.5 million) in 2013, up from 2.6 billion lek (Euro 18 million) in 2012.
The four small and medium sized HPPs acquired by Turkey’s Kurum for around 110 million euros generated around 126 GWh during the second half of 2013 under Kurum’s management.
Review of regulated HPP prices
The Albanian government says it will initiate a reform in the energy sector which targets reviewing the regulated electricity prices that small and medium sized hydropower plants currently apply causing considerable losses to state-run KESH power corporation.
“The electricity producers are not the same, and not all producers have the same electricity costs, and I think the model that has been shaped in Albania regarding electricity prices for private hydropower plants must be reviewed. We will follow the best models which adjust to your investments but at the same time the needs the energy system faces,” Energy Minister Damian Gjiknuri said recently in a conference with HPP operators. He has also announced the approval of a new energy law targeting the liberalization of the energy market and reducing the burden to the state-run KESH power corporation.
The Albanian Energy Association representing several small hydropower plants says a reduction in the regulated electricity prices risks taking these investments toward bankruptcy.
The favourable prices set for electricity purchases from small and medium-sized hydropower plants built under concession contracts in the past seven years is severely affecting the troubled finances of state-run KESH power corporation. KESH lost around 32 million euros in 2013 from the purchase of electricity at regulated prices from private and concession hydropower plants and the losses are expected to increase to 39 million euros this year, KESH sources say as quoted by local media.
The state run power utility buys electricity from small and medium-sized HPPs at an average price of up to 9.37 lek/kWh and sells it to CEZ distribution operator at regulated prices of 2.2 lek/kWh, which is four times lower compared to the purchase price.
The situation has further aggravated the finances of KESH which owes around Euro 11 million only to private and concession HPPs, not to mention hundreds of millions of Euros it owes to commercial banks for electricity imports.
Currently, KESH purchases electricity from 88 hydropower plants with installed capacity at 223 MW but the amount of electricity is projected to increase due to new HPPs expected to be made operational.
Electricity sold by new hydropower plants rose to 9.3 lek/kWh in 2012, up 35 percent compared to 2011 but remained unchanged in 2013 because of the stimulating government policy calculating them on electricity import prices, says energy regulator ERE in its 2013 report. Power prices for older private or concession contracts remained unchanged at 7.77 lek kWh in 2013, up from 7.57 lek kWh in 2011 based on the average household tariffs.
Since 2007, the Albanian government has awarded more than 400 concession contracts to private companies, of which only 70 have already been made operational.
