The price of energy for large businesses is expected to increase by up to 30 percent, warn representatives of several companies licensed to supply electricity in Kosovo.
These companies have currently increased their efforts to secure energy, on the eve of the launch of the energy market liberalization process.
What does energy market liberalization mean?
The process of liberalizing the energy market in European Union countries began in the late 1990s with the aim of increasing competition, efficiency, security and choice for consumers. In the Western Balkans, however, this process is still under development.
In Kosovo, the liberalization of the energy market is foreseen by the Law on Electricity adopted in 2017, but its implementation has been postponed due to various circumstances.
The Energy Regulatory Office (ERO) has now decided that as of June 1, all large companies – specifically those with over 50 employees or an annual turnover of over 10 million euros – will move to the open energy market. According to ERO, their number is over 1,000.
Currently, these businesses are supplied by the Energy Supply Operator (KESCO), as the main licensed energy supplier at prices regulated by ERO.
As of June 1, large companies must choose their own supplier, with unregulated prices, which are determined by market demand and supply.
Currently, 18 companies are licensed to provide electricity supply in the free market of Kosovo, most of which are from Kosovo, but there are also companies from the region.
Some of them have begun negotiations with energy producers in the region to secure the necessary capacities to supply new customers.
Meanwhile, some businesses, like Frutex in Suhareka, are looking to local companies to negotiate the price for electricity.
Businesses facing the choice of new suppliers
Drilon Brahimi, general director of the company Tredint Group LLC, which was licensed to supply electricity at the end of last year, says that they are in the market research phase to secure more affordable prices, but have not yet signed any contracts with production companies from the region.
"Many local companies, specifically manufacturing companies, have started sending us their annual energy consumption profiles and are requesting information about the price. We are in the phase of preparing the offers. The concrete response for each is expected to be sent to them in early May," he tells Radio Free Europe.
However, Brahimi emphasizes that the price for the first months is expected to be up to 30 percent higher than current energy tariffs.
Currently, for household and commercial consumers who consume up to 800 kilowatt hours within a month, the price of electricity during the day is 7.79 cents per kilowatt, while for those who consume more than 800 kilowatts, the portion above this is calculated at a price of 13.29 cents.
New tariffs come into effect from May 1, with an increase of 16.1 percent, but they will not apply to businesses with over 50 employees.
Diamant Dalladaku from Enerco LLC also warns of a 30 percent increase for large companies.
He also says that he has not yet signed any contracts with foreign companies and that they are in the process of researching the market.
"The liberalization of the energy market is a new process and challenges are emerging during implementation. A problem at the time of preparation is the lack of information on the energy consumed by businesses that are entering the open market," Dalladaku tells Radio Free Europe.
The ERO's annual report states that last year, over 5,400 gigawatt hours (GWh) was the total amount of energy sold to all consumers in Kosovo. Of this amount, 3,156 GWh or 58.4 percent were consumed by household consumers, while the remaining 2,041 or over 37 percent were consumed by non-household consumers, and this category includes all businesses.
Palushi: We still don't have concrete offers for energy
The Frutex juice production company in Suhareka is one of the companies that will find its own electricity supplier starting in June.
Its owner, Shaqir Palushi, says they have sent a request for a meeting to all licensed energy supply companies in order to negotiate the price. However, Palushi has not yet received any response from them.
"I am waiting in the coming days... but I do not believe that they are prepared for this process, especially in the conditions of turbulence that have prevailed in recent years regarding electricity prices," he emphasizes.
Palushi says that he spends up to 40 thousand euros on energy per month. If the price increases by 30 percent, he would pay over 52 thousand euros for the same amount spent.
"Of course, this will increase operating expenses, but we will make efforts to initially have an impact on reducing the company's profits and not increase prices," he says.
Licensed companies, unprepared?
The chambers of commerce in Kosovo have requested the postponement of this decision, as according to them, even though the companies are licensed, most of them have not had end customers and have existed only "on paper", without real commercial activity.
This transition, according to them, will destabilize supply and will affect the increase in prices of other products.
For this reason, on March 21, the Kosovo Chamber of Commerce requested the Ombudsman to initiate this case at the Constitutional Court and request the suspension of the decision for at least one year.
The Ombudsman confirmed to Radio Free Europe that it has received the complaint from the Kosovo Chamber of Commerce and is reviewing it.
"For the Ombudsman, this is a complex situation due to the fact that these developments have taken place at a time when key institutions are still being established," the response states, adding that the increase in electricity tariffs will have consequences for the socio-economic rights of citizens.
However, ERO reiterated that existing capacities are sufficient to supply businesses with energy after market liberalization.
"Most suppliers are making the necessary technical and administrative preparations to be functional in the market," it says in a response that ERO sent to Radio Free Europe.
ERO says it is holding regular and informative meetings with all licensed suppliers in order to inform them as clearly as possible about the steps and opportunities offered by market liberalization./ REL (A2 Televizion)
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