Part I
Bosnia and Herzegovina
Bosnia and Herzegovina is a net exporter of electricity, despite the fact that generation resources are not fully exploited, and therefore there is room for a significant generation increase.
The country’s main energy sources are conventional – coal and water. In recent years, the number of private companies engaged in electricity generation and supply has grown. The owner of the coal mine Stanari and the owner of the concessions for the TPP Stanari and HPP Ulog on the Neretva River is EFT Group.
The electricity market in Bosnia and Herzegovina was liberalized on 1 January 2015, when new rules came into force allowing citizens to choose their supplier. This means that citizens no longer have to buy electricity from the three former and only “national” distributors: Elektroprivreda B&H, Elektroprivreda HZHB and Elektroprivreda RS, but can opt for one of the 29 suppliers, as currently licensed suppliers in B&H.
The largest electricity exporter in Bosnia and Herzegovina in the first six months of 2018 was EFT Rudnik and Termoelektrana Stanari. According to the State Electricity Regulatory Commission of B&H (DERK), in this period, EFT exported 975 GWh of electricity to foreign markets, which is more than 28% of all realized cross-border transactions.
According to the regulator, total exports in the first half of last year amounted to 3.403 GWh, and their value was KM 276 million (EUR 141 million).
After RiTE Stanari, the largest exporter Elektroprivreda Republike Srpske (ERS) with 572 GWh, followed by GEN-I from Sarajevo (514 GWh) and Alpiq Energy Sarajevo (316 GWh).
These four companies, out of the total of 15 energy entities participating in these transactions, accounted for as much as 69% of exports.
It is interesting that Elektroprivreda RS exported more electricity in the first six months of 2018 than during the entire 2017.
At the end of 2018, electricity in the Republic of Srpska had the largest share in total exports, of KM 286 million (EUR 146 million), accounting for 7.6 percent of exports.
Electricity export in B&H in 2017 amounted to 5,161 GWh, at the level of KM 463 million (EUR 236 million). The largest part, 65%, was exported to Croatia, 16% to Serbia and 10% to Switzerland.
EFT Rudnik and Termarielektrana Stanari was also the largest exporter of electricity in 2017, followed by Alpiq Energija, EFT Bileca and Elektroprivreda RS.
On the other hand, although Bosnia and Herzegovina is a net exporter, in 2018, electricity was imported at the level of KM 290 million (EUR 148 million). A similar situation was observed in 2017, when the value of imports amounted to EUR 155 million, of which the largest part, 57%, was imported from Croatia.
Macedonia
Macedonia is a net importer of electricity, since electricity generation in Macedonia is not sufficient to cover domestic needs. Energy balance deficit ranges from 20 to 25 percent. This percentage is mainly dependent on the hydropower plants generation variations. Thermal power plants operated by the state owned ELEM generate 80 percent of the country’s total electricity.
After several delays, on 1 January 2019, liberalization of the Macedonian electricity market for households and small consumers started. This means that they have the right to choose their supplier, while so far the only supplier was EVN.
Namely, all households will be able to choose from whom they will buy electricity, and if they do not, they have the right to universal supply.
Bills show that households will not profit from market opening at the beginning of the liberalization process, as the price will be higher than regulated. However, for small consumers, who are now paying an industrial price for electricity, entering the open market should be cost-effective, as their bills are now have twice as high and in some way subsidize household consumption.
At present, about 80% of the Macedonia’s market is covered by the newly-selected universal supplier EVN Snabdevanje, while 20% of the market is liberalized.
Gross electricity generation in 2018 increased by 0.1% compared to 2017, to 5,607,171 MWh, while imports recorded an annual decline of 0.2% to 2,297,169 MWh. At the same time, exports increased to 377,423 MWh, from 311,026 MWh in 2017.
The value of the competitive electricity market in Macedonia in 2017 amounted to EUR 112 million. Average market price was 49 euros per MWh, and almost half of the sales came from EDS and a quarter of EVN Snabdevanje.
Participants of the Macedonia’s free market consumed 2,280 GWh of electricity in 2017, according to the official 2017 report of the Macedonian Regulatory Office for Energy.
The largest seller is EDS (Electricity Delivery Solutions), which managed to sell 1,120 GWh, which is almost half of the total sold volume. In line with the average selling price of 49 euros per MWh, EDS made a revenue of EUR 55 million and thus became the leading retailer in the competitive market. Since last year, EDS is owned by the Greek electricity utility PPC, while one of the previous owners was Vice Prime Minister Koco Angusev.
The largest competitor to EDS in 2017 was EVN Snabdevanje, daughter company of EVN Makedonija, which is also the largest distribution operator. EVN’s revenue from electricity trading in 2017 amounted to EUR 30 million for delivered 613 GWh.
Other traders lag far behind. ENG Services, ranked third with 86.3 GWh sold, and earnings of EUR 4.3 million. It is followed by EFG, Energy Finance Group, with 71.8 GWh sold, a total of EUR 3.52 million, Future Energy, 65.7 GWh, with EUR 3.22 million and EFT Macedonia – 65 GWh, EUR 3.18 million.
The average price of 49 euros per MWh is 10% higher than in 2016. Average electricity price for large consumers in 2017 was 51 euros per MWh, and it increased by 15.5%. For small consumers, entitled to choose their supplier, the average price in 2017 was 44.9 euros, which is a symbolic decline of 1% compared to 2016.
Albania
When it comes to Albania, the situation with electricity imports/exports electricity is changing literally year after year, since generation is almost entirely dependent on hydropower, i.e. precipitation and hydrological situation.
While 2017 was one of the most difficult years in terms of import – export balance, in 2018 Albania recorded a significant increase in electricity generation, thanks to favourable hydrological situation, with an increase in exports.
During 2018, domestic electricity generation reached 8,552 GWh, compared to 4,525 GWh in 2017, this is an increase of 89%. The share of public power plants in generation amounted to 68.4%, while the share of private and concession hydroelectric power plants was 31.6%.
Positive results in generation also affected imports, which was 1.9 times lower than in 2017. Exports increased by 5.5 times compared to the previous year.
Generation of public hydroelectric power plants in 2018 was 5,851 GWh, compared to 2,917 GWh in 2017, which means that generation has almost doubled. Private hydropower plants produced 2,701 GWh, compared with 1,608 GWh in 2017, which is 1.7 times more.
Gross electricity imports fell to 1,772 GWh, from 3,403 GWh in 2017. Gross electricity exports increased to 2,685 GWh, with 488 GWh.
On the other hand, the total cost of electricity imports in 2017 reached an incredible EUR 205 million.
Only to cover domestic consumption in December 2017, the value of the signed contracts for the purchase of 315,000 MWh amounted to EUR 27.8 million.
For December, OSHEE bought 93,000 MWh in two lots, valued at EUR 6.68 million, at an average price of 70.97 euros per MWh, and 222.704 MWh, whose value is 21.15 million and the average price is 93.36 euros per MWh.
Contracts were signed with EFT AG, Future Energy Trading, GSA, DEVOLL Hydropower, GEN-I Tirana, AXPO Belgrade, AYEN Energy Trading.
In this year, exceptionally, electricity imports were partially taken over by KESH, which spent EUR 21.5 million euros only in three months, September, October and November. For this purpose, funds from the World Bank loan were used.
To cover consumption in November 2017, KESH purchased 129,600 MW, worth EUR 8.8 million euros, out of nine companies – GEN-I Tirana, EFT AG, GSA, Albanian Energy Supplier, DEVOLL Hydropower, AYEN Energy Trading, Network for Trading doo Belgrade, A & A Group and HSE.
This year, Albania is again faced with an extremely unfavourable hydrological situation, which has brought the country literally to the brink of an energy crisis.
Thus, only to cover domestic consumption in January 2019, the OSHEE distribution operator spent some EUR 30 million to import 329,000 MWh.
Official data show that electricity generation at the Fierzes hydro power plant fell in January 2019 as much as three times compared to January last year, from 188 GWh to 64 GWh.
Such drastic fall in generation forced OSHEE again to massively import electricity. In the first two months of this year, the distribution company spent EUR 58 million to purchase electricity to cover domestic consumption, while, according to the forecast, additional EUR 20 million is needed for March.
Such situation is most favourable to electricity traders, since Albania has been changing its status from a net importer to a net exporter year after year. Electricity is, as a rule, imported by the public company OSHEE, considering that the electricity market is liberalized only for high-voltage customers, while the sales tenders are organized by the manufacturer KESH.
Most active traders in the Albanian market are GEN-I Tirana, EFT, GSA, Devoll Hydropower, Ayen Energy, NOA Energy, HSE and Axpo Belgrade.
Some companies in their portfolio combine activities of electricity trade, import and export and generation – Ayen Energy is the owner of the largest private hydroelectric power plant in Albania, HPP Fangu, with a capacity of 74.6 MW and HPP Peskes, 27.9 MW, while Devoll Hydropower owns HPP Banjes, 73 MW.
The relationship between traders came to the spotlight at the end of last year when GEN-I appealed to the Energy Community Secretariat, arguing that KESH disclosed information to other bidders, i.e. the details of the GEN-I bid were submitted to the companies GSA and EFT, and that the bidding rules were not followed.
This situation resulted in a trade war between companies operating within the Albanian energy market. Several traders lost a significant market share, which they are trying to recover.
The ERE Regulatory Agency rejected these accusations, stating that the monitoring of the electricity purchase and sale process during 2017 and January-March 2018 was carried out, and that all procedures complied with regulations approved by the regulator. However, the monitoring report was not publicly disclosed.
