Drought severely affects electricity generation, exports

INSTAT data show grid losses, the overwhelming majority of which belong to distribution network losses, dropped by 7.3 percent to 1.546 GWh, accounting for 38.4 percent of total electricity available for consumption.
TIRANA, Sept. 2 – Prolonged drought in the first half of this year severely affected the country’s wholly hydro-dependent domestic electricity generation and electricity exports but grid losses in the now 100 percent state-run electricity distribution system suffered a moderate decline, according to a report published by the country’s state Institute of Statistics, INSTAT.
Data shows domestic electricity generation, dominated by state-run hydropower plants was down by 47 percent compared to the first half of 2013 and accounted for two-thirds of total domestic generation. Electricity generation by private and concession hydropower plants rose by 8.2 percent to 783.604 MWh in the first half of 2014 after Turkey’s Kurum acquired four small and medium-sized HPPs and several new HPPs launched operations, accounting for one-third of domestic electricity generation.
The drought period severely affected the country’s electricity exports which dropped by 90 percent to only 116.756 MWh, while electricity imports more than doubled to 1.786 GWh, accounting for 44 percent of electricity available for use, up from 20 percent in the first half of 2013.
INSTAT data shows grid losses, the overwhelming majority of which belong to distribution network losses, dropped by 7.3 percent to 1.546 GWh, accounting for 38.4 percent of total electricity available for consumption. Technical losses due to the dilapidated grid remained almost unchanged at 37 percent of distribution network losses while non-technical losses (thefts) were down by 8 percent accounting for around two-thirds of distribution losses.
Electricity consumption in the first half of 2014 rose by 7.2 percent with household and non-household consumption up by 7.6 percent and 6.8 percent respectively compared to the first half of 2013. The moderate increase in electricity consumption also hints a recovery in the Albanian economy as also indicated by INSTAT data for the first quarter of 2014.
The settlement of the dispute with Czech Republic giant CEZ last June ahead of Albania’s granting of the EU candidate status is expected to give a boost to investments in the distribution grid which is now back under full state ownership.
Albania’s Energy Minister Damian Gjiknuri says “the final solution to the conflict with CEZ not only clarifies the legal status of the company, but finally paves the way to investments in the distribution system, which has been facing a collapse because of mismanagement and lack of investments.”
“There is at least USD 200 million pending to be invested, of which 150 million dollars by the World Bank will be activated starting this year. The prolongation of the legal conflict and legal insecurity in the distribution sector made the investments impossible,” he added.
Eighteen months after having its licence revoked and just before an expected EU decision on Albania’s candidate status that could be endangered by a Czech Republic veto, the Albanian government and Czech giant CEZ reached last June an amicable out-of-court solution to the Albanian electricity distribution operator whose majority stake was sold to CEZ in 2009 for Euro 102 million and managed for three and a half years by the Czech company until it had its Albania licence revoked in January 2013.
Under the deal signed by the Albanian government and CEZ, whose 70 percent stake is owned by the Czech government, Prague-based CEZ will get in annual installments in the next four years a total of Euro 95 million, an amount slightly lower to its initial investment in the Albanian distribution system, but half of the Euro 200 million CEZ had warned it would claim in international arbitration proceedings.
In a recent country report, the World Bank says that the combination of total dependence on hydropower generation, and its vulnerability to weather patterns, the lack of self-generation capacity, and the extremely high level of distribution losses that require significant power imports is adding financial stress to the sector and the economy.
Albania’s deputy Prime Minister Niko Peleshi, who heads a nationwide task force targeting to reduce grid losses and thefts, says Albania is estimated to have lost around 200 million dollars in 2013 from power losses which rose to 43 percent. The losses which are a result of massive power thefts and dilapidated distribution system are equal to 70 percent of electricity generation from the Drin cascade in northern Albania, where the biggest hydropower plants are situated.