3Power Energy Group Inc (PSPW)

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Energy, the crisis increased private producers and traders
29/09/2023 10:06 PM

Electricity trading is attracting more and more enterprises.

Although it is a volatile business, depending on the needs of state operators to buy energy from imports, the simple model and without the need for much investment, but only with capital, is encouraging new entrants.

In 2022, the annual turnover of all operators in this segment increased significantly, as a result of the increase in prices on the stock exchanges.

The year 2022 marked the peak of the energy crisis, which had started in the summer of 2021. While Albania was in a state of supply emergency, during August there was no longer talk of cost, but of difficulties in securing the necessary amount for consumption.

The prices touched never-before-seen values, reaching at the end of August the value of 1047 euros/MWh or 130 ALL/kWh (remember that a household today pays 9.5 ALL/kWh with an adjusted price).

According to official data in the report of the Energy Regulatory Entity, August is the month with the highest cost of energy provision during 2022, where 1 MWh of energy was provided for 482 euros/MWh, followed by September, for 479 euros/MWh and earlier from July, 439 euros/MWh.

The average purchase price of energy in the free market during 2022 reached 305 euros/MWh, almost 3.5 times higher than the usual average that the country imported energy in the period before the beginning of the crisis. In total, together with the Value Added Tax, energy imports cost around 504 million euros.

In quantity, the imported energy was 1.46 million megawatts/hour. The country's water situation improved only at the end of November 2022, after the onset of rains, reducing purchases on the free market.

In addition to the increase in prices on the stock exchanges, the energy system in the country also faced unfavorable weather, with the concentration of rains only in the first months of the year, which led to a significant increase in imports and contraction of domestic production.

According to INSTAT data, in 2022, the weight of imports in relation to available energy reached 38.4%, from 26.8% in 2021.

According to INSTAT, during 2022, the available electricity decreased by 5.8%. The domestic net production of electricity reached the value of 7,003 GWh from 8,963 GWh of energy produced in 2021, marking a decrease in production by 21.9%.

The gross import of electricity (energy in receipt) reached the value of 3,044 GWh from 2,253 GWh that was a year ago, marking an increase of 35.1%.

The gross export of electricity (energy in delivery) reached the value of 2,123 GWh from 2,800 GWh, marking a decrease of 24.2%.

This situation has stimulated the activity of electricity traders, who saw a strong increase in income in 2022.

" GSA" has become the first largest energy trading operator. In 2022, the annual turnover was almost ALL 50 billion, with an increase of 126% on an annual basis (a part of the activity is occupied by the trading of ferrochrome).

"Ener Trade", part of the "Gjonaj" group , which entered the "Monitor 200" list for the first time in 2020, was the second largest energy trading operator in 2022, after the increase in revenues by 145%, to ALL 42.7 billion.

" GEN-I Tirana", the Slovenian operator, has increased revenues by 63% to 20.1 billion ALL. According to the activity report, "For the following business year 2023, the 'GEN-I Group' has plans to further strengthen its presence in the Albanian electricity market and its activities in the wholesale electricity market.

The stable aim of 'GEN-I Tirana' is to acquire large end customers and therefore, to expand its focus towards end customers SME-Small and Medium Enterprises, in case of good market opportunities".

"Noa Energy Trade" doubled its income to 14.9 billion ALL. The company was established in 2014.

According to the activity report, "The main activity of the Company is to carry out the activity of supplying and trading electricity, using energy sources, which are found in nature and are renewable.

During the year 2018, the Company has included the trading of green and gas certificates in its scope of activity and in its charter. The company employs 3 employees on December 31, 2022, of which 1 employee belongs to Kosovo".

"Tirana International Development-TID", a company that previously specialized in construction, entered the list of "Monitor 200" in 2021 after a sixfold increase in activity, to 3 billion ALL. In 2022, revenues tripled again to 10.6 billion ALL, largely driven by energy.

"Ayen Energy Trading" reported 7.8 billion ALL in revenue, with an increase of 76%.

"Danske Commodities Albania" has halved its income to 2 billion ALL in 2022.

"Albanian Energy Supplier", part of the BALFIN group, which entered the list of "Monitor 200" in 2021, after tripling the activity, to 4.8 billion ALL, has appeared again in 2022, after having an income of only 545 million ALL.

Private power producers, with growth
Large investments in the construction of private hydropower plants have significantly increased the share of energy production by non-public companies. Expensive prices helped them to expand their income several times.

The share of private producers in the total energy produced in 2022 increased by 5 percentage points compared to the previous year, reaching 44.2%.

In 2022, domestic production was realized by public hydropower plants to the extent of 55.1% (from 59.6% in 2021), by private and concessionary hydropower plants to the extent of 44.2% (from 39.9% in 2021) and by other producers (Photovoltaics) to the extent of 0.7% of the net domestic electricity production, according to INSTAT.

"Devoll Hydro power " is the largest private producer of energy in the country, through two hydropower plants.

In 2022, his income doubled to 17.7 billion ALL. According to the activity report, “in 2022, DHP's gross revenue increased due to the increase in energy prices.

The total production of electricity during 2022 was 490 343 MWh, in a reduction of about 28% compared to 2021, due to unfavorable hydrology, in the Devoll river valley with a significant decrease in water flows in the Banja and Moglica reservoirs, resulting in a decrease in the amount of electricity production from hydropower plants".

Banja HPP (72 MW installed renewable energy capacity) started commercial operations in 2016, while Moglica HPP (197 MW installed renewable energy capacity) started commercial operations in the second quarter of 2020. .

The year 2022 was the first complete with operations from both HPPs, Banja and Moglica.

According to official sources from "Statkraft", the two hydropower plants, Banja and Moglica, have an installed capacity of 256 MW.

The company announces that the implementation of the Banja Floating Photovoltaic Plant by Statkraft Renewables Albania Sh.pk in the Banja HPP reservoir has been completed.

"Ayen as Energy" reported an income of 10.5 billion ALL, with an increase of 136% compared to the previous year. The Turkish company is implementing the 2011 contract for the design, construction, commissioning, administration, and maintenance of the Gojan, Gjegjan, Peshqesh, Ura e Fani and Fang hydropower plants.

"Ayen as Energy" built and put into operation at the end of 2017 the HPP of Fang, with a capacity of 74.6 MW. The Fangu HPP, in terms of production capacity, ranks fifth after the Fierza, Koman and Vaut Deja HPPs, which are owned by the state, and Moglica.

This is the second HPP in the country, built by the Turkish company "Ayen" after the one in Peshqesh, with a capacity of 23 MW, which started production a few years ago.

"Energgia Ashta", with an installed capacity of 48.2 MW, is the only one of the large producers that has not increased revenues in 2022. The company's annual turnover was 1.9 billion ALL, with a 15.6% decrease on an annual basis.

The combined capacity of both hydropower plants (Ashta 1 and Ashta 2) is 53 megawatts (MW); 242 million kilowatt hours are produced annually.

During 2022, total production was 236,276 MWh, according to the activity report.

Dog, you are not a crisis

Post-pandemic marked the resumption of economic activity, marking a rapid increase in energy demand globally. In addition there were a number of other reasons which, combined, led to a deep energy crisis.

Such were: the increase in the price of gas, the lack of production from renewable energy sources (wind in this case, which has a significant weight globally), as well as the effect of measures to reduce CO2 emissions.

The rise in energy demand was earlier predicted by economists around the world as part of the industry's post-pandemic recovery, but no one could predict the mix of factors that coincided at the same time.

While Europe struggled with gas, the price of which began to trade 5 times more expensive than in 2020, China on the other hand had its own crisis related to low coal reserves.

If that wasn't enough, in February 2023 the situation worsened, due to Russia's attack on Ukraine.

.https://www.monitor.al/energjia-kriza-rriti-prodhuesit-private-dhe-tregtuesit/