TIRANA, April 25 – A revise downward in electricity prices for concession and private hydropower plants led to a decline in their 2015 income despite increased production due to some new HPPs and favourable hydro situation, according to an annual report by energy regulator, ERE. HPP investors have warned the revised electricity prices risk taking them to bankruptcy and have appealed to court the ERE and government decisions on the new price methodology and their retroactive effects.
The situation is expected to further deteriorate this year when ERE ruled KESH will buy electricity from private and concession HPPs at a unified 7.448 lek/kWh (€0.052), down from 7.636 lek/kWh (€0.054) in 2015 and up to 9.37 lek/kWh (€0.06) for new concession HPPs until 2013. The decision came following a government decision in 2015 which adopted a new formula to calculate electricity prices for private-run HPPs, taking into consideration average prices at the Hungarian stock exchange, a 1.24 coefficient and the average annual euro/lek exchange rate. The government argued the decision with retroactive effects for 2013-2014 with the huge losses state-run power utility was suffering under the previous rates.
The annual energy regulator report shows state-run power utility KESH spent some 8 billion lek (€58 million) on electricity purchase from private and concession hydropower plants in 2015, down 2.4 percent compared to 2014 despite production increasing by 12 percent and accounting for 24 percent of total domestic wholly hydro-dependent electricity generation.
Some 101 private and concession hydropower plants had electricity sale contracts with KESH power corporation in 2015, excluding four small and medium-sized HPPs run by Turkey’s Kurum, currently under bankruptcy proceedings and another new medium-sized plant, the Peshqesh HPP run by Turkey’s Ayen As Energji which became operational in mid-2015.
The Ashta HPP, a €200 million by Austria’s Verbund and EVN, operational since early 2013, increased its production to 200 GWh in 2015 accounting for one-fifth of total production by private and concession-run HPPs. Its 2015 income was at about 2 billion lek (€14 million), according to energy regulator ERE.
State-run KESH is the country’s largest electricity producer, mainly coming from the northern Albania Drin Cascade where the country’s three largest HPPs are situated.
Since 2007, the Albanian government has awarded more than 400 concession contracts to private companies, of which only 100 have already been made operational.
The Devoll HPP by Norway’s Statkraft is the biggest hydropower plant under construction in Albania with a potential installed capacity of 243 MW and production estimated at 729 GWh a year.
Heavy rainfall and a cut in grid losses considerably improved the domestic hydro-dependent electricity generation in 2015 which met 80 percent of the country’s needs, compared to only 60 percent in 2014, according an earlier report by state statistical institute, INSTAT.
The higher domestic generation allowed the country’s state-run power corporation to more than treble electricity exports to 956 GWH and considerably cut imports.
Losses in the dilapidated distribution network registered a sharp 21 percent decline following the late 2014 nationwide campaign to curb electricity thefts and collect accumulated unpaid bills. However, losses still remain high at about 30 percent of total electricity consumption compared to 35 percent in 2014 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.
Billed electricity consumption by both household and business consumers rose by only 1.2 percent in 2015, reflecting higher electricity prices, the cut in power thefts and sluggish consumption and investments.
Back in 2014, electricity consumption in 2014 rose by 10 percent for both household and non-household consumers.
