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Why is Kosovo fleeing energy market liberalization? – Latest news

Why is Kosovo fleeing energy market liberalization?

Liberalization of the electricity market in Kosovo, as one of the requirements of the European Union (EU), launched years ago, has not yet managed to be finalized.

Postponement of the electricity market liberalization process is being done since 2017.

The deadline for energy market liberalization was March 31, 2021, but even this date has been extended at the request of representatives of the business community (Kosovo Chamber of Commerce, American Chamber of Commerce in Kosovo, European Investors Council and the Club of Manufacturers) who say that this process should not happen without creating the right conditions.

Arian Zeka, executive director of the American Chamber of Commerce told Radio Free Europe that while in ideal circumstances, the liberalization of the energy market would bring benefits to consumers, in the case of Kosovo this can not happen, as the supply in the energy market is limited.

Despite the fact that in Kosovo are licensed several operators for electricity supply, only one of them has the capacity to function in practice as a supplier and in such circumstances (liberalized energy market). “When the supply in the market is limited, this makes the consumers face limited supply and consequently with a more limited power of negotiating electricity tariffs”, says Zeka.

No conditions for liberalization of the electricity market

Currently the Energy Supply Operator (KESCO) is a supplier that has a license for electricity supply, including the public service obligation set by the Energy Regulatory Office (ERO), to supply customers with the right to universal service.

Also, according to ERO in Kosovo are licensed seven operators for electricity supply.

But, according to business representatives, licensed operators fail to function as regular suppliers in the market.

The Energy Regulatory Office says that as long as those companies are licensed to carry out the supply activity, that everyone should be able to perform this function.

Adelina Murtezaj-Bajrami official, for public relations in ERO, says for Radio Free Europe that there is no indication that they can not fulfill their function.

“Their complaints to perform this function are only related to the lack of demand, as consumers are continuing to insist on staying with the universal service provider, at regulated prices. Also, the lack of local energy can make these suppliers uncompetitive in the market, due to other costs that may be caused to you by the energy that would have to be contracted by producers from other countries “, says Murtezaj-Bajrami .

Kosovo has more than 10 billion tons of lignite and as such, is the fifth country in the world in terms of the amount of this resource, but despite the wealth of lignite, Kosovo continues to face electricity shortages.

Market liberalization can raise energy prices

ERO estimates that the situation of the pandemic in the country, which has affected many businesses in economic terms, as well as the concentration of the market largely on a single supplier, has shown the reluctance of consumers to submit to market conditions (liberalization). , which necessarily, adds ERO, increase the costs of purchasing energy.

Arian Zeka from AMK shows that companies in Kosovo have reported that the offers they have received from suppliers, provide for an increase in electricity tariffs by 30 to 40 percent.

“For a company that spends one million euros of electricity within a year, we are talking about manufacturing companies since they are the largest consumers of electricity, it turns out that within a year they will have to have additional costs for energy 300 to 400 thousand euros “, says Zeka.

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