TIRANA, Feb. 14 – Heavy rainfall during the past couple of months has lifted Albania’s hydro-dependent electricity system out of crisis with state-run KESH power utility now meeting domestic consumption needs and even regularly exporting small quantities.
The situation has also relieved public finances of a huge burden after a prolonged drought in 2017 forced the country to make costly electricity imports of about €200 million in the second half of the year, ranking the wholly hydro-dependent domestic electricity generation as the key threat facing the 2018 budget.
State-run KESH power utility which manages the country’s three largest hydropower plants in the northern Drin cascade says reservoir water levels are at almost peak levels, meeting domestic electricity needs and allowing the country to export part of its production in order to keep compulsory water discharges as low as possible.
Energy minister Damian Gjiknuri says electricity production on Feb. 13 hit a historic high of 28.86 GWh, breaking a previous Dec. 30, 2010 record of 27.8 GWh.
“Such a level of production is a result of the synergy triggered by the favorable hydro situation combined with the performance of KESH engineering and technical staff who monitor and guarantee the availability of generation units in real time,” Gjiknuri said, adding that production at the cascade is at full capacity.
The Drin, Koman and Vau i Dejes HPPs at the northern Albanian Drin Cascades, built in the 1970s and 1980s under communism, currently account for about three-quarters of electricity generation, with the rest being generated by more than a hundred private and concession small and medium-sized HPPs.
KESH power utility has already exported electricity worth millions of euros since the resumption of exports in early December after severe floods hit central and southern Albania regions.
The improving hydro-situation and the resumption of exports also marks a turning point for state-run OSHEE distribution operator which in late 2017 was unable to meet the country’s huge needs of electricity imports and needed government financial support to handle them.
The new circumstances mean OSHEE can now continue with much-needed investment in distribution grid and reduce declining but still high level of electricity losses.
Albania’s domestic electricity generation is currently wholly hydro-dependent triggering the government to offer incentives for liquid gas-fired thermal power plants as the major Trans Adriatic Pipeline bringing Caspian gas nears completion.
In a bid to diversify domestic resources, the government has also urged investors to consider untapped potentials in solar and wind energy following a boom in the construction of small and medium-sized hydropower plants built under concession contracts in the past decade, currently producing about a quarter of domestic electricity, but being at risk of adverse weather conditions such as last year’s prolonged drought.
Meanwhile, a dispute between Serbia and its former breakaway province Kosovo over a long-standing electricity transmission issue continues to hold back a newly built German-funded Albania-Kosovo interconnection line which has been available for use since mid-2016.
The deadlock, which Germany is trying to mediate, has also halted Albania-Kosovo plans to set up a joint energy market and a power exchange helping Kosovo’s lignite-fired power plants and Albania’s hydro-dependent electricity system exchange electricity during their peak production levels, reducing dependency on costly imports.
World Bank concern
As a five-year $150 million World Bank supported power recovery project nears completion by late 2019, the Washington-based lender has downgraded Albania’s overall implementation progress to moderately unsatisfactory from a previous satisfactory.
In a January 2018 update on the project’s implementation, the World Bank says the state-run Albanian power sector is once again under financial stress following a prolonged drought paralyzing domestic electricity generation and failure to meet loss targets in the distribution grid.
Electricity losses in the distribution grid have dropped to 28 percent, down from a record 45 percent in mid-2014 when the distribution operator was nationalized following a failed short-term privatization, but are far from the mid-2019 target of 14 percent, says the World Bank describing overall progress in the past three years as moderately satisfactory.
“The vulnerability of the electricity sector to the meteorological situation in the country is the main risk factor,” says the World Bank.
