Once again, Albania is facing an immediate energy crisis that, according to local experts may be the most challenging crisis of the last fifteen years.
At present, Albania’s hydro reserves are quickly petering out. Since 99 percent of locally-produced power comes from hydro reserves, the country is facing an inescapable “energy siege.” Only 1 percent of total energy production comes from the sole coal power plant in Fier. Other sources of energy such as natural gas and timber are infinitesimally small and therefore the heavy weight of energy production falls wholly on hydro reserves. The emergency situation may soon have dire consequences as 65 percent of the energy produced is used for heating and other basic services. Albanians prefer to use electricity for two simple reasons: first, the country lacks the infrastructure to distribute natural gas. Second, almost all natural gas is imported making it more expensive to use than electricity. During communist times, in all cities and villages people mostly used timber as an energy source but now, most have forgotten about that old but reliable source.
At a time when hydro reserves are quickly reaching their “death point”, the only alternative to a total black out is import…
A Siege Foretold
Until 1990 Albania was exporting energy products such as natural gas, diesel, coal as well as nationally-produced energy. Local experts warned of the pending energy crisis by the end of the eighties. However, since the communist regime was on its last legs and the centrally-planned economy had reached the precipice, nothing could be done to reform energy production. After 1990, the crisis hit hard and it soon turned into a siege, a great obstacle not only to economic growth but also to the basic needs of common people in the winter cold. There were two factors for this crisis. First, power production sources were badly administered. In Albania, 56 percent of energy used is either lost by the antiquated power grid (11 percent) or it is pilfered. This constant leak in energy distribution means that 44 percent of energy consumption is not paid for.
Another factor of the energy crisis is that Albania has been unable or unwilling to replace the power production sources inherited from the communist regime. While power household consumption has grown exponentially, no serious investments in energy production has occurred despite grandiose plans that have been unveiled every now and then.
Hence, despite constant warnings, every winter has seen Albania mired into the vise of power black outs because of a management crisis. Long-term investments such as plans to build a TEC (coal power plant) have been postponed constantly. On the other hand, the state-owned KESH (Albanian Power Corporation) has failed to implement short-term plans that would significantly alleviate the black outs. This year as well KESH failed to buy energy in the regional market in times when energy prices were low and hence it is reduced to buy power now when energy prices are up while supply is at its lowest and transport routes are blocked.
Breaking this Year’s Siege: Insh’Allah it rains
Three years ago, the Prime Minister of Albania asked Albania to look at the sky and pray to the good Lord to send us rain. Mind you, snow would not do as it melts only in spring which would hardly have any effects on the country’s hydro power sources. As a matter of fact, the inshallah factor (“God willing”)has defined the strategy of successive governments on the power crisis.
KESH’s clever public relations slogan (“Paguaj që ta KESH”—a pun on the word “kesh”, or “to have) often transmitted on Albanian TV stations has turned into raw material for local comedians. You can pay as much as you want but in the winter you may be sure that you will not kesh (have) energy. The arrogance of the KESH managers and their political masters in fact goes even further. One month ago, the government claimed that the power problem was solved through imports. Later, the director of KESH stated that in fact enough power had been bought abroad but transport routes were not available. Finally, the government declared that energy imports were quite difficult because of Bulgaria’s closure of nuclear power stations.
As a matter of fact, the closure of these power stations had been foretold much earlier because of EU conditionality on Bulgaria.
Economic effects
In April 2004, Bujar Nepravishta, an expert on Albania’s power issues, claimed that the power crisis would have increasingly more negative effects on the country’s economic growth. As the economy becomes more power dependent, the manufacturing sector will not get off the ground with such extensive power cuts. The service sector will suffer from increased prices. Some basic public services too such as water supply are closely connected to energy provision. According to a 2004 study by the Albanian Institute for International Studies financed by UNDP Albania, 66 percent of the population had running water only for 8 hours a day partly because of the energy crisis.
Of course, the energy siege has been one of the main deterrents to foreign direct investments in the country at a time when it can hardly forego such monies. On the positive side, despite a horrendous crisis in the winter of 2005, the country’s economy grew by 5.5 percent instead of the forecasted 6 percent. Alhamdulillah (“thank God”) for the primitive economy…
