The Albanian power system relies practically only on hydropower plants (HPPs) and therefore it is totally dependent on hydrological conditions. According to the National Energy Strategy1. , total annual potential production from hydropower plants in Albania is estimated at 10,000 GWh. This can be derived from an installed capacity of 3,000 MW. Based on this data, at the end of 2014 exploited opportunities represent 58% of the hydro-power potential with a total installed capacity of 1,725 MW.
History of the sector development 2.
During 1945 – 1951 period the power production amounted to an average of 10 KWh per capita. The sector began to develop after 1952, when Selita hydro-power plant started operation, with an installed capacity of 5 MW. Since then medium-sized hydropower plants were built in Ulza, Shkopet in north Albania and Bistrica 1 & 2 in south Albania with total installed capacity of 78 MW. In addition about 90 small HPPs, with a total installed capacity of 14MW varying from 5 to 1,200 KW were built to fulfill energy needs in the mountain areas all over the Country. These small HPPs had an average life of 25 years and generated an average of 200 GWh in normal years.
Three largest hydropower plants of Fierza, Koman and Vau i Dejes were built in a cascade form on the Drini River from year 1971 to 1985 with an installed capacity of 1,350 MW. The sector marked no further developments from 1985 up to the year 2007.
Drini crossing north Albania is the largest river in the country. Studies report further hydropower potential to be exploited on Drini River, such as Skavica in the upstream and Bushati in the downstream of the existing development. Vjosa and Devoll are the second and third largest rivers in Albania. Studies in these rivers several hydropower opportunities for small and medium HPPs.
The hydropower production in Albania is dominated by the public sector. A the end of 2014, the State owned and operated the Albanian Electrical Power Corporation (KESH), the Transmission System Operator (OST) and Electricity Power Distribution Operator (OSHEE).
KESH is the largest producer in the country. With an installed capacity of 1,448 MW or 80% of total installed capacity in Albania built in a cascade over Drini River in the north, KESH contributed with 87% of power output in 2013.. This ratio fell to 72% in 2014, due to increase activity of private HPPs and HPP under concession in the sector.
ERE reported domestic hydro-power output of 6,956 GWh in 2013 and 4,726 GWh in 2014. If estimated using average export prices, the domestic output would have been reported at Lek 25.5 billion (equivalent to USD 243 million) in 2013 and Lek 24.1 billion (equivalent to USD 229 million) in 2014. However, because KESH sells its output at regulated price of Lek 1 per KWh (equivalent USD 0.01 per KWh) sales from the sector did not exceed Lek 11 billion (equivalent to USD 106 million) in 2013 and Lek 9.6 billion (equivalent to USD 91.5 million) in 2014.
The Albanian State subsidizes the power sector through regulation prices of power generation, transmission and distribution. This fact explains the relatively lowcontribution of the sector to GDP, at about 2%.
In 2013, 45% of power transmitted was lost in the distribution system because of its poor technical conditions and informal connections to the system. In 2014, the losses dropped to 37.81% of the power transmitted3. as a result of combined efforts of the Albanian Government and the power distribution company – OSHEE. Foregone contribution of power losses measured at export prices is estimated to be about Lek 22.3 billion in 2013 (equivalent to USD 212 million) and Lek 19.9 billion in 2014 (equivalent to USD 190 million).
The cost structure of domestic power output has changes in the last 5 years with intensification of production from private HPPs and HPPs under concession and is expected to change further in the future when a large number of medium and small HPP under concession enter the production phase.
The sector’s known contribution accounted at 0.2% of the total revenue in to the National budget in 2013 and 0.1% in 2014. In addition to normal cash flows the Government collected also revenue of Lek 15,439 billion from the privatization of the HPPs of Ulza, Shkopet and Bistrica 1 and 2, which were operating under KESH until mid-2013. Had this amount been counted together with normal cash flows, the contribution to the revenue in to the National budget in 2013 would increase to 4.9%.
Data reported from AKBN show that a large number of HPP granted on concessions have not yet commenced the construction or are still under construction as at the date of this report, showing delays of two years and above. More specifically, out of 502 HPPs under concession, 308 HPPs with installed capacity of 1,152 MW and forecasted energy at 5,359 GWh have not yet started the construction phase. While, 84 HPPs are in the construction phase. If assumed that all HPPs were completed within two years from the concession date and produced the energy foreseen in the concession contract the concession fee for the year 2013 would be Lek 1.78 billion and increased further to Lek 1.9 billion in 2014, which is more than 10 times larger than the concession fee collected in both years.
1. National Energy Strategy, adopted in July 2003 can be found on the website of AKBN – www.akbn.gov.al.
2. Information presented in this section is derived from “Hydro-energetic potential” published by AKBN – www.akbn.gov.al
3.Power transmitted includes both domestic power consumption and power losses.