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Dams expected to open/ KESH failed to sell electricity before floods, due to EU carbon tax

2026-01-07 10:29:00Fokus SHKRUAR NGA REDAKSIA VOX
Albanian Electric Power Corporation

Two days ago, the Albanian Power Corporation attempted to sell a large amount of energy to anticipate torrential rains and avoid water discharges.

But the attempt failed, as no company agreed to buy energy.

After the first failure, KESH offered energy to companies at the almost free price of 15 euros per megawatt hour.

But again, no one agreed to buy a single kilowatt of energy.

The reason?

A new tax imposed by the European Union on carbon and the Albanian government's negligence in receiving carbon credits from the EU have transformed the energy produced by KESH from a blessing into a curse, which will now fall on the company's finances, but also on the backs of the citizens of Shkodra.

From the first day of this year, every product imported into the European Union that is produced by emitting carbon must pay a tax as a measure of compensation for pollution. This group of goods also includes electricity.

The tax, which is part of the so-called "Carbon Border Adjustment Mechanism", has a base level of around 90 euros per megawatt of energy imported into the EU borders, which is even higher than the price.

Dams expected to open/ KESH failed to sell electricity before floods, due to EU

Carbon tax

But the mechanism provides that exporting countries can significantly reduce the tax on their products if they purchase green certificates to cover carbon or if they prove that the products produced come from green sources.

In the case of Albania, which produces almost all of its energy from water and the sun, the tax would have to be negligible, close to zero.

But the Albanian government, like every government in the region, did not put enough pressure on the European Union to determine the appropriate coefficients for each of the Western Balkan countries.

In these cases, Albania is the biggest loser, as Albanian energy would have to have an advantage over all other countries.

But what could have been a blessing has turned into a curse due to government negligence.

It is now practically impossible for KESH to sell energy for export.

This is because, if a company were to buy energy from KESH, at the moment it sold it in an EU country, it would have to pay 90 euros per megawatt in tax.

More than the price of energy is worth. At the same time, this energy cannot be sold to countries in the region, which, like Albania, are facing an energy surplus that they have nowhere to sell.

The inability to sell energy, in addition to severely damaging KESH's finances, has already begun to severely damage families in the northwestern lowlands of the country.

Unable to sell energy, the government announced the day before the opening of the gates for the discharge of water from the Koman and Vau i Dejës hydroelectric plants.

Although Fierza continues to remain closed because it still has water catchment space, the frantic level of flows and expectations that it will remain so could quickly exhaust the Fierza area, imposing water discharges from the country's largest basin.

A scenario that would repeat the "Prifti" phenomenon in 2010, where discharges reached extreme levels, completely flooding the Nënshkodra area.

Three weeks ago, the European Union criticized Albania for failing to implement energy reforms through the Energy Secretariat, disqualifying it from the ministerial.

The Ministerial Council stated that Albania has failed to harmonize its legislation with European electricity market rules in a timely manner.

More specifically, it was about:

-updating the law on the electricity market;

-gradual opening of the market according to EU rules;

-establishing clear rules for producers, suppliers and network operators;

-guaranteeing competition and transparency in the market;

- the adoption of bylaws that make the law applicable in practice./Capital


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