Interview with Mr. Benet Beci, administrator of the Albanian Electricity Corporation (KESH) The project for the construction of the Skavica Hydropower Plant has aroused high interest among potential donors and financiers. The hydropower plant, which would turn the country into a regional leader in sustainable energy production, is estimated to cost between 308m and 510m euros, depending on the height of the dam. Mr. Benet Beci, administrator of the Albanian Electricity Corporation (KESH) says in an interview for “Monitor” that the project will be public and he repays the value of the investment within the first decade after commissioning.

What are the plans for the construction of Skavica and its estimated costs?

As noted in previous communications, the Skavica Hydropower Project will be a public investment. The Skavica hydropower plant will be located upstream of the existing HPPs on the Drin River cascade and will have an impact on the operation of the entire cascade. In this way it is very useful for the country and our power system for this project to be a public investment. A few months ago, a memorandum of cooperation was signed between the Government of Albania and the Government of the United States of America. Part of the memorandum is the cooperation agreement for the construction of the Skavica hydropower plant by the American company Bechtel, which is one of the most prestigious companies in the world in the field of construction of hydro works for the production of electricity. The estimated costs up to the pre-feasibility phase for this project are respectively 308 million euros for the low dam alternative (up to 388 m.m.n.d) and almost 510 million euros for the high dam alternative (up to 443 m.m.n.d).

Where will the funding sources come from?

Funding sources for the project are still being discussed between the Albanian Government and potential donors. So far we can say that there is a high interest in financing the project, as one of the largest possible investments in the region, in renewable energy sources.

What is the profitability of this project, both financially and in terms of energy management?

If we refer to the alternative of building the Skavica hydropower plant with a high dam, which is also the most feasible and valuable alternative for the country and our power system, it turns out that this project repays the value of the investment within the first decade after commissioning . If we take into account the fact that the lifespan of these investments is up to 100 years, then the economic viability of the investment is clear. First, electricity generation: currently Albania, in an average year, imports electricity in significant quantities and the expected production of the Skavica hydropower plant, which will be up to 1,000 GWh / year would significantly contribute to reducing imports and in the energy security of the country.

On the other hand, the profitability of this project lies in optimizing the production of electricity from the existing hydropower plants of the Drin River cascade. This is related to the fact mentioned above that the Skavica hydropower plant will be the first hydropower plant located in the Drin River cascade and its construction will have an impact on other cascade hydropower plants. The development of the Skavica hydropower plant, according to the high-dam alternative, would have a significant effect on optimizing production at the existing hydropower plants of the Drin River cascade, where it is estimated that existing hydropower plants will produce an average of 80 GWh / year more electricity. if Skavica is developed according to this alternative. The positive impact of the high dam alternative is as a result of the high regulatory capacity that the Skavica hydropower plant reservoir will have, due to its volume, which enables you to “store” electricity in the form of a hydro reserve, reducing water discharges without power generation in existing hydropower plants. Another reason that affects the optimization of production in existing hydropower plants is the fact that, through the Skavica hydropower plant we will have more opportunities to maintain the water level in the reservoir of the Fierza hydropower plant at the most optimal production quota from this hydropower plant, reducing specific water consumption from this hydropower plant and consequently, we will also optimize production.

What are and will the effects on the environment and the ecosystem and population of the area be taken into account?

Of course, the development of projects of this nature is associated with a socio-environmental impact in the area affected by the project. Even in this case, the construction of the Skavica hydropower plant will cause floods in the area where the reservoir will be created. For the evaluation of the effects that this project will have on the environment, ecosystem and the population of the area, a careful study is being carried out, which, among other things, will determine the necessary mitigation / compensatory measures according to the best international practices. It is worth noting that the construction of the Skavica hydropower plant will not only have negative effects on the environment, ecosystem and the population of the area where the reservoir will be created, but will also have many positive effects in this area, even positive effects will be dominant. . Specifically, the development of this project is an extraordinary opportunity for economic development and employment in the area. During the construction phase there will be a massive employment directly, but also indirectly of the inhabitants of the area. Upon completion of construction, the operation and maintenance of the hydropower plant will create jobs that will be sustainable and quality. It is worth noting that currently, the existing hydropower plants of the Drin River cascade are the largest employers in the areas where they are located.

In addition to employment, the construction of the Skavica hydropower plant will create favorable conditions for the development of other sectors of the economy, such as tourism or fishing. The construction of the Skavica hydropower plant will be accompanied by an improved infrastructure. In this regard, we will have new constructions in infrastructure, such as bridges, roads, residential centers, service buildings, health centers, education, etc. On the other hand, if we look a little wider in the entire Drini basin, one of the most positive social and environmental effects of the construction of the Skavica hydropower plant will be the significant impact on reducing floods in the area of ​​Sub-Shkodra, increasing capacity for the accumulation of inflows into the reservoirs of cascade hydropower plants in years when inflows are high.

In the face of these costs, what will be the advantages in the economy?

The economic advantages of this project will be ascertained in the early stages of the construction of the hydropower plant, creating new jobs and creating extraordinary opportunities for the development of other sectors of the economy. The construction of the Skavica hydropower plant will have a great impact on the electricity sector in our country. If we refer to the amount of energy we have imported over the last 10 years, it turns out that on average, we spend 100 million euros per year on these imports and the development of the Skavica hydropower plant would reduce by an average of 55% annual electricity imports. In this way, the Skavica hydropower plant will directly affect the increase of the security of the country’s electricity supply and will reduce the bills that our country pays for the import of electricity.

In this year’s interconnection projects, a project for the rehabilitation of the Fierza HPP was approved, worth 42.7 million euros. What is the aim of the project?

Fierza Hydropower Plant is currently the most important generating unit of the power system, which produces an average of 1328 GWh / year and plays the role of 1-year regulator of the Cascade. The units of the Fierza hydropower plant were installed about 40 years ago and underwent only a partial rehabilitation in 2004-2006, during which two rotors of two turbines were replaced, while the two rotors of the other two turbines and the four generators did not have never been involved in full rehabilitation. In such conditions, the technical condition of the electromechanical aggregates and systems is depreciated and their rehabilitation is necessary. The European Union, through the Western Balkans Investment Framework instrument, has for the first time selected to financially support the rehabilitation of a hydropower plant in the Western Balkans, with a grant of 8.5 million euros. This investment will be supported by KfW and the Albanian Government. The investment will realize the complete electromechanical rehabilitation of the hydropower plant of Fierza, which more specifically, consists in the replacement of 4 generators, 2 turbines, as well as the electromechanical system of this generating unit. The realization of this investment will enable the increase of electricity production from the Fierza Hydropower Plant, due to the increase of production efficiency by at least 4%, the reduction of costs for periodic maintenance, the increase of work readiness, as well as the increase of lifetime of the offense and with at least 25 years.

What is being done in the long run to diversify energy production sources in order to reduce dependence on hydropower?

Diversification of electricity generation sources is a criterion for our country, as currently, energy production in our country is based only on hydropower sources. In this regard, the Albanian Power Corporation is also working with medium and long term plans. We are currently preparing a project for the construction of a floating photovoltaic plant on the surface of the Vau i Dejes reservoir. The project will be the first in our country in terms of installed capacity and technology to be used. The development of this project is being carried out in close cooperation with our financial partner, the EBRD, which will financially support the construction of this plant. We are nearing the end of the study phase and very soon we will start the subsequent procedures for the construction of this plant. In parallel, we are working on another project in the field of solar energy, which consists of the construction of a photovoltaic plant of about 5 MWp, in one of the dams of the Vau i Dejes hydropower plant. According to the current forecast, within this year, both of these projects will be in the construction phase. Of course, these projects, in the future, will be followed by others that will lead to the diversification of the electricity generation portfolio by the Albanian Electricity Corporation.