KESH lost around 32 million euros in 2012 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
TIRANA, Feb. 5 – 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 2012 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 situation 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.
“It is obvious that with this pace of electricity generation by small and independent generators, the financial pressure toward KESH is increasing. With all due respect to private investments in the electricity generation, I think it is high time to review support policies to these investments. Of course this requires that all stakeholders are involved in an all-inclusive and transparent process on the billing system and its relation to cost and the efficiency of generation. We are working on concrete proposals to the Energy Ministry regarding these necessary changes,” says KESH director Agron Hetoja.
The Albanian government has recently approved around 82 million Euros in loan guarantees for KESH power corporation for electricity purchases due to the drought period until early January 2014.
Electricity sold by new hydropower plants rose to 9.3 lek/kWh in 2012, up 35 percent compared to 2011 because of the stimulating government policy calculating them on electricity import prices, says energy regulator ERE in its 2012 report. Power prices for older private or concession contracts rose to 7.77 lek kWh in 2012, 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.
Albania’s deputy Prime Minister Niko Peleshi, who heads a nationwide task force targeting to reduce grid losses and thefts, said 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.
