Think Big

While the 14 hour power cuts of last November are now a distant memory, the underlying problems with the power system remain. According to KESH, the state energy utility, domestic production met 97% of domestic demand in 1990, but only 47% last year. Not only has demand been increasing, but capacity has been falling. Ordinary people who suffer as a result, and so does the country as a whole. The IMF estimates that last year's power cuts knocked .5% off Albania's economic growth rate.

The Albanian government has an ambitious plan, not only to solve Albania's energy problems, but also to turn the country into an energy exporter. At the heart of the plan is the construction of a series of gas-fired power stations in the south of the country. The biggest of these is to be constructed in the Fier district and it is expected that it alone could generate enough power to meet all of Albania's needs.

Gas for the power stations will come from a re-gasification plant to be built in the same area. This plant will receive Liquefied Natural Gas (LNG) from tankers, converting it back into gas before pumping it to the power stations. This plant is designed to have a capacity of 10 billion cubic metres. Albania's requirement for its new power stations will be 2 billion cubic metres. The rest will be pumped into the European gas network via a pipeline to Italy. As a result, Albania should be able to meet its own domestic needs and to export energy - in the form of gas or -to its neighbours.

It's a huge project. The estimated cost is 1.9 billion dollars. Who is behind it? European and American investors are funding the project - including the US Import Export Bank. A Swiss based consortium, ASG Power SA, is responsible for construction. The main party in the consortium is the Swiss public utility AET, and SAIPEM - a subsidiary of ENI - and General Electric will be involved in design and construction.

Meanwhile the government is also constructing new power lines across the country, both within the country and between Albania and some of its neighbours; KESH, the public energy utility, is being privatised; and the government is in discussions with Russian energy company, Gazprom, about the possibility of linking Albania into the regional gas pipeline network. The aim of all of this is that Albania should be self-sufficient in power-generation from diversified sources by 2008-9.

Not everyone is happy though. Many of the people of the Fier district have a different ambition for their region. They want to see it develop as a tourist resort, taking advantage of the beautiful Adriatic coastline and the nearby ancient site of Apollonia. Re-gasification plants, power plants, and tankers are going to make the district something of a hard sell in the tourism market. If I lived there I probably would not like it either, but it seems like a better long term bet for economic prosperity and development in the region.