Energy crisis at the door

The two biggest energy producing countries of the region, Bulgaria and Romania, have completely blocked any kind of export. Serbia and Macedonia don’t allow their network transmit energy to other countries. Due to these drastic measures, the energy price has reached the maximal levels, 100 EUR per mega.

But this is the least concerning issue, since with the transmission networks shut down, it is impossible for Albania to import energy, even with high prices. In January, the Albanian Power Corporation (KESH) was able to buy only 40% of the energy it needed from import, while in February they were unable to import any of it, being without any offer.

Albania imports 12 million KW hours a day, most of which are contracted by CEZ. But both companies, CEZ and KESH, have contracts that guarantee the energy import by the end of the month. If the snow will continue and the market will be closed, Albania will suffer power cuts, since the water reserves are in the lowest levels. The water level in Fierza is only 259 meters and falling since KESH is obliged to produce with a higher rate for compensating the lack of import.

KESH and snow emergencies “eat out” Reserve Fund

Even if the weather will improve and the regional market will return to normality, Albania will still suffer financial consequences. As never before, the government was obliged to execute the Contingency Fund since February, two months after passing the budget, by giving 2 billion ALL to KESH for the imported energy.

But this money will be also used for the energy bills of December and January, which leaves no funds for the months to come. In the current conditions, with the country facing the crisis caused by the bad weather, the government will be obliged to give other budget funds for helping residents in isolated areas.

The contingency fund for this year was only 4.7 billion ALL in total, 2 billion of which were spent for helping KESH.

The government still doesn’t have a preliminary cost for the crisis created by the bad weather, but together with a high energy import bill, chances are that the Reserve Fund will not be enough, which would oblige the government to make an urgent budget review.

Even if the snow will melt soon and the hydropower plants will receiving more water, KESH will have to import energy for keeping a sufficient reserve during summer, which has proved to be hot and dry in the recent years.

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