TIRANA, Feb. 10 – Private hydropower plant owners have reached a deal on electricity prices charged by state-run KESH power corporation after being offered a 24 percent bonus on the average prices at the Budapest Stock Exchange, which has been set as a benchmark to calculate prices.
Under a deal signed by the Energy Ministry and the Association of Renewable Energy, private and concession hydropower plants will sell electricity to KESH power corporation for 2015 under a formula which takes into consideration average prices at the Hungarian stock exchange, a 1.24 coefficient and the average annual euro/lek exchange rate.
“This methodology is considered to be based on a reasonable rate of return, avoiding as much as possible the transfer of risk from the public sector to the private one,” said the energy ministry in a statement.
Meanwhile, private hydropower plant owners have appealed a decision a decision by energy regulator which revises downward electricity prices for small hydropower plants for the 2013-2014 period, describing the retroactive effects of the late December 2014 decision as illegal and anti-constitutional.
Under a decision made on December 26, the energy regulator ERE, ruled that electricity prices for all existing hydropower plants with an installed capacity of up to 15 MW would be reduced to 7.53 lek/kWh (Euro 0.05), down from 9.37 lek/kWh (Euro 0.06) for the 2013-2014 period.
The energy regulator also ruled that state-run KESH power corporation will pay 9.73 lek/kWh to new HPPs for 2013 and 7.95 lek kWh for 2014.
HPP owners have taken the ERE decision to court describing its retroactive effects as unacceptable.
Albanian and foreign companies which have invested in small private and concession hydropower plants had warned the reduction of electricity prices under an earlier unilateral government decision last December risked taking them to bankruptcy.
In a reaction to the government decision which cut by 30 percent the electricity prices that the state-run KESH power corporation charges on small HPPs, the Association of Renewable Energy, warned the decision affected 70 small HPPs worth Euro 200 million.
State-run KESH power corporation, which sells the electricity purchased from HPPs almost four times cheaper to the distribution operator, lost around 32 million euros in 2013 from the purchase of electricity at regulated prices from private and concession HPPs with a capacity of up to 15 MW.
Some 164 concession contracts were signed by the previous government on the construction of 435 HPPs.
The launch of the Ashta hydropower plants in late 2012 and the operation of several new smaller HPPs, has more than doubled electricity generated by private and concession HPPs in Albania, according to a report by energy regulator ERE.
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.
