Albania heading towards energy crisis

The water level in Fierza has fallen to 260 meters, and continues to fall, due to the lowest historical water levels. The water level in November was only 34 cube meters per second, from 204 that was the average of this month in the last 50 years. All hydropower plants produce only 6 million KW hours per day, while consumption is almost four times higher.

In this situation, the Electro-Energetic Corporation has been obliged to import big quantities of energy. The energy import has reached the historical record, almost 17 million KW hours per day, making the financially week corporation spend almost 30 million EUR per month, to buy energy. This situation has started from the beginning of the year. In total, during the entire year, KESH has produced 3.7 billion KW hours in the country, and has been obliged to import 2.6 billion others. Due to this situation, KESH is in urgent financial needs.

The corporation has been obliged to take bank loans for buying energy, but now has reached a point when it cannot secure funds without the state’s intervention. Due to the crisis that has hit the Albanian economy, the government is financially unable to secure funds for the corporation, with the debt that fluctuates around the maximal level and with government finances in the worst position of the last decade, the energetic crisis could bring big consequences for the economy in general.

Privatization that did not solve the crisis

In 2009, when the energy distribution was privatized with the company today known as CEZ, the government built a model that did not resolve the long energetic stalemate. On one hand, the government charged KESH with the legal obligation to secure energy for the country, but on the other, it did not resolve the financing issue, because the scheme does not guarantee revenues for the corporation.

Today, the Albanian Energetic Corporation sells to CEZ only 1.4 ALL per KW hours, but for handling consumption they have to buy with a 7 to 8 times higher price. The annual budget reviews not only have not favored KESH, but have discriminated it financially. Last year, the Regulation Entity reduced the price of the energy that KESH sells to CEZ with 30%, for compensating the growth required by the Czech Company.

During the first two years, the crisis was temporarily hidden due to the heavy rainfalls that increased domestic production by decreasing the cost. But now that the drought has returned, KESH is financially unable to secure energy for the entire country. As long as the government will not give a final solution to KESH finances, the energy market in the country will be in chaos and a source of crisis. And this is also due to the fact that the energy consumption is increasing with a fast pace, to the point that the experts say that KESH will not be able to fulfill the legal obligation to secure energy for the entire country.

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