In 2006, the former government of Albania undertook an aggressive policy to encourage construction of huge energy works.
Licenses were given for hundreds of new hydropower plants, followed by strong guarantees for the private sector.
The state decided to use the Albanian Power Corporation (KESH) to buy all the energy produced by them with a privileged price, higher than that of the market.
During these eight years, the construction of some of these HPPs is over and have started producing energy.
From the outside, this might seem good news for the increase of the domestic product. The Albanian Power Corporation has bought 1 billion KW hours of energy with an average price of 9.3 ALL per KW.
Only the additional cost in the price that the Energy Regulation Entity has decided for the Albanian Power Corporation mounts up to 32 million EUR. Losses for this year will be higher, respectively 39 million EUR.
The cost in the years to come will be even higher. The increased production from private HPPs and the obligation of KESH to buy all of their energy through subventions, is ruining the corporation financially. But the ones who really pay are the citizens.
The losses of KESH will be covered by the budget taxes or the increased price of energy. The government action eight years ago for orienting investors in the production of energy has made possible the construction of inefficient HPPs. Experts say that if KESH doesn’t buy energy with a higher price than the market, they would go bankrupt. But the other question is if it is right to charge the citizens for this?
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