1- Who pays for the 37.6% loss?
The wave of reforms in the energy sector has brought into the background a new advertisement for political use. And so it happened that on May 4 the Prime Minister promising that results from reforms will eventually come, illustrated this with a notable example from April. This month marked profits for OSHEE, which means for the first time in its history OSHEE did not need to ask money from taxpayers to bridge the gap created by energy stealing.
In the meantime, the Prime Minister in a Council of Ministers Decisions, no, 171, of 25.02.2015 ‘’On the approval of a Financial Recovery Plan for the Energy Sector’’, accepts that losses in the system are at 37.56% and this plan aims to reduce losses in the distribution sector with an average of 5% per year, in order to achieve a 14% loss by 2019!
If OSHEE profits and there is a loss of 37%, who pays for the latter? Based on the experience of non-payment of this difference in loss, it is paid by consumers. So, citizens not only pay for what they consume, they also pay the 37% loss and at the end we have a positive balance sheet, does this mean we have a fair policy towards those who pay electricity?
One of the instruments the government thought about using to lower the percentage of losses in the market are intelligent meterings of electricity. Deutsche Telekom started the production of 9300 such meterings. In cooperation with AMC they will be installed in the most problematic areas of Albania in the form of a pilot project. These equipment not only will impact the decrease in consume, they will also exclude every possibility of stealing energy, overpricing and incorrect evaluation from OSHEE employees.
The new measuring system will be directly controlled in an online portal from the consumer, so they know how much energy they are spending in order to better economize their expenses in this item. According to sources from OSHEE, these measuring equipments will be placed in problematic areas of Tirana: Bathore, Paskuqan, Allias and Babrru, which have created many problems with energy payments.
In addition, there are 40 000 intelligent meterings spread throughout the country. While until 2020 the energy sector will benefit from financing in the value of 420 000 million $, with the Distribution part remaining the main area of investment.
The energy reform to fight against losses in the system is translated not only in concrete initiatives such as the ones mentioned above, but at the same time it seems the government has thought about everything in details through financing from foreign financial institutions as well as with the help of foreign and domestic companies. But is this the best and most efficient solution for Albania? What were the experiences considered from which this method was chosen? What will be the financial and non-financial cost of this scenario? The control over consuming figures will remain with the distributing company and the consumer remains a non-engaged reader in the monitoring process.
Lastly, if we consider the information given on these intelligent meterers, that consume can be checked online, will this mean that the government has offered free Internet in each house?
The questions above relate to the family consumer who is still vulnerable to such fluctuations. Let us not forget about businesses that are being used in this pilot project against their wishes, in lack of another choice they become the incubators where the new intelligent instrument is tested.
2- The ‘’shadows’’ of energy investments in Albania!
During meetings with Turkish and Italian investors minister Gjiknuri hesitated to advertise Albania as a potential investment.
This comes at a moment when the government is trying to radically change the energy field in Albania through the undertaken reform in order to consolidate the trust of foreign investors.
The new law on Energy aims to liberalize the production sector, initiate the liberalization of the distribution sector and opening up new opportunities for investment in this regard. Such an opening of the market will promote free competition. Undertaken by a leftist government this might be an indicator that should be monitored. On the other hand the possibility to catch the offer on time for foreign investors seems rather confusing.
The new financial discipline advertised by minister Gjiknuri is an additional stimulus for investors but with a loss of 37% in the system despite the measures and plans that are still in the inception phase, this stimulus remains with a shadow of doubt.
Establishing energy relations with markets in Kosovo and Macedonia is seen under a positive light from investors, although the political situation in these countries is not very sustainable, especially for Albania and its weather conditions.
However, the diversification of the energy portfolio, by becoming part of the Trans Adriatic Pipeline is creating opportunities for the use of gas in Albania. Such a momentum should be used, despite the rules that govern this market are nowhere to be seen. The horizons for this new market remain a challenge for the Albanian government in relation to involved actors and the rules of the game.
The three new areas where companies can search for oil are a test of the will and interest of foreign companies in the hydrocarbons market in Albania.
In essence, the message of minister Gjiknuri, despite attempts to exempt it from political propaganda, remains the invitiation to invest in Albania because this is the right moment, because this government has taken concrete measures with structural reforms that might have political costs, but that are needed for the development perspective, for the sustainability of investments and the further development of Albania.