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Ekonomia

Adrian Çela makes the forecast, shows what is expected to happen with prices in the energy market during the rest of the year: This will increase the impact on the financial performance of society

Adrian Çela makes the forecast, shows what is expected to happen with

2020 was a year of major reforms for the Electricity Distribution Operator (OSHEE). From the beginning of 2020, OSHEE Group Sh.A., became the first Albanian Public Corporation, owning 3 companies, the Universal Service Provider, the Free Market Supplier and the Distribution System Operator (DSO).

The three companies have started operating as separate from January 1, 2020, after the division of functions.

Adrian Çela, administrator of "OSHEE Group", claims that the model selected as "OSHEE Group", resulted during the implementation as a successful structure, not only to ensure the continuity of group activities, but also to cope with emergency situations, such as "pandemic" or "drought", the effects of which have been felt in other societies, not only in the energy sector.

Cela adds that the forecasts for the extraordinary increase of prices in the energy market during the rest of the year are expected to increase the costs of purchasing energy and the impact on the financial performance of the company.

 

For the first time in 2020, the operation of three separate companies owned by "OSHEE Group" began. How has their performance been and what synergy will the division of companies bring?

The division of companies, exercising functions independent of each other, is one of the major major reforms implemented in the energy sector. I want to emphasize that the model selected as "OSHEE Group", resulted during the implementation as a successful structure, not only to ensure the continuity of group activities, but also to cope with emergency situations, such as "pandemic" or "drought". the effects of which have been felt in other companies as well, not only in the energy sector.

During 2020, which was the first year of activity, despite the pandemic, all three societies in particular, as well as in the group, managed to perform positively, achieving the set objectives, to overcome the difficult situation in the country.

Regarding the separation process itself, let me explain how the implementation of the new structure was carried out. Within the process of separation of OSHEE JSC, as a legal obligation in the framework of the reform in the energy sector, OSHEE has continued with the process of division of the company on January 1, 2020. Currently, the subsidiaries operate independently , with their boards of directors and the General Assembly, referring to the legislation on companies.

While each of the daughter companies operates independently, to fulfill the main object of their activities, OSHEE Group sh.a., in the framework of service agreements (SLA) offers administrative services such as: Human Resources, Legal, Support , IT Services, Economic Services, etc., helping to optimize costs.

Being within a group highlighted the fact of efficient interaction between societies, bringing, as a whole, a good management of several challenges at once, always keeping in mind, operating in conditions of pandemic and drought.

How much have the OSHEE Group companies been affected by the 2020 pandemic? How much did it affect your investment plans? What was your reaction to this situation?

Even in the difficult conditions of the COVID-19 pandemic, OSHEE managed to provide a continuous supply of electricity and quality parameters to consumers throughout 2020 and especially in the period of almost total closure of all activities in Albania.

Despite the extraordinary efforts of the management of the company, the created difficulties brought consequences in:

Reduced revenue per unit sold, because the sales structure changed (household customers, who have a lower price increased consumption, and businesses, which have a higher price, reduced consumption).
Reduction of the average selling price of energy, from 11.02 Lekë / KWh to 10.8 Lekë / KWh.
Reduction of the revenue collection rate from 97.5% in 2019 to 93.4% in 2020. The
realized investments, mainly due to the low presence of employees at work, were about 51% of those planned.

How has the performance of the group companies been so far in 2021?

The 7-month period of 2021, when electricity supply from KESH and prices in the energy market were normal, significantly improved the performance of the company, with a profit of about ALL 2.7 billion.

Losses in the power grid have been reduced as forecast and are expected to average 20.5% for 2021, while the collection rate has improved to the planned level of 95%. However, forecasts for tremendous price increases in the energy market over the remainder of the year are expected to increase energy purchase costs and impact on the company's financial performance.

How is the liberalization of the energy market going? How do you assess the output of the connected subjects in the 35kv voltage? When is the output of the connected subjects in 20kv voltage expected to start?

The process of liberalization of the electricity market for the 35 KV connected entities has been completed. It is managed, providing support to every 35 KV connected supplier and customer. The next step will be the involvement in this process of customers / consumers at medium voltage level, who at the end of the first phase, are equipped with an intelligent metering system.

About 700 consumers in the medium voltage network (20/10/6 kV) are equipped with intelligent metering system. OSSH SH.A. / OSHEE GROUP is working to create the entire technical infrastructure, "software" to enable and manage this process with high standards. The intelligent metering system will be extended very quickly to 0.4 kV level customers, the largest number of whom belong to household customers and medium and small businesses.

 

How does the creation of an energy exchange affect OSHEE? What advantages does it bring to the energy market?

"OSHEE Group" and more specifically FTL Sh.A. (Free Market Supplier) is the main actor in the sale and purchase of energy in the free market, buying electricity to cover losses in the distribution network, to meet the uncovered demand for end customers of FSHU, as well as the purchase of energy from producers with Advantages of electricity and resale of surplus of this energy in the free market.

All these processes, which today take place based on bilateral procedures and contracts, with the opening and development of the energy exchange, will be operated on this platform.

The energy exchange is an activity, which will be managed by the Market Operator, part of OST Sh.A. The trading structures of the OSHEE Group, which will participate in the Energy Exchange, will influence the increase of transactions and the finalization of a more competitive price for the sale and purchase of energy. The stock exchange, in itself, will increase the participation in the market of energy sales, as well as a greater transparency of unit prices.

However, the procedures followed today by FTL / OSHEE are completely transparent, based on the online platform and in which there are more than 10-15 bidding companies.

In 2019 was procured a procedure known as "Technical Assistance to the Ministry of Infrastructure and Energy, Energy Distribution Operator, Electricity, Transmission System Operator on the establishment of Metering Strategy and Standard Policies in the Albanian Energy Sector." Has this project been completed and what are the conclusions drawn regarding OSHEE regarding the reduction of losses, receipts, as well as the cost-benefit ratio of replacing inductive meters with new electronic meters and the possible inclusion of a PPP?

The project as a consulting service has been completed. The project recommends the best case scenario, which consists of reducing losses, managing the free market, increasing revenue and reducing costs.

OSHEE Group's vision is in line with the measurement strategy, starting very quickly with the first step - intelligent measurement in 25000 cabins and then continuing to the end customer. Currently, with intelligent metering system, all customers connected to medium voltage are installed.

FTL, during this year, also engaged in energy sale procedures for surpluses resulting from energy-priority producers. How do you assess the new stage of this company, part of OSHEE, which turns the company, not only into a seller to the final consumer at regulated prices, but also in the free market?

Due to the climatic conditions, in wet periods of the year, surplus electricity generated by hydropower plants (producers with priority electricity) has been created, the company "Supplier of the Free Market" JSC. / OSHEE GROUP, based on the Decision of the Council of Ministers, no. 244, dated 30.03.2016, "Conditions for establishing the public service obligation, which will be applied to licensees in the electricity sector, who exercise the activity of generation, transmission, distribution and supply of electricity" as amended, has sold on the free market / unregulated these surpluses, after covering the losses in the distribution network.

The sale of surpluses will be realized by the company "Supplier of the Free Market" JSC. / OSHEE GROUP until the establishment of the Renewable Energy Operator.

What are the group's plans in terms of investment and loss reduction?

OSHEE Group's vision is in line with the metering strategy, starting very quickly with the first step - intelligent metering in 25,000 booths which have a measurable impact, with a 1.5% reduction in grid energy losses, and continuing then to the end customer. Consequently, in the investment plan 2021 we have reallocated a budget to the Metering System.

Currently, with intelligent metering system, all customers connected to medium voltage are installed. Concrete steps have also been taken in the intervention of tourist nodes, to reduce the losses caused during periods of maximum consumption in the summer months./Monitor