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| Photovoltaics |
The second hydropower plant on the Devoll River, that of Moglicë, has been completed by paving the way for filling the reservoir and launching the tests. Tom Kristian Larsen, Managing Director of Devoll Hydropower, the Norwegian company Statkraft, says that the construction activities in this work are in the final stages.
In an interview to Monitor, he underlines the main company's objective of expanding its renewable energy sources, such as the sun and the windRegarding the energy market in Albania, Larsen points out that there are still many things to do, that have been put on paper and are left there like the Stock Market of the Energy or the factual separation of three new OSHEE companies.
Can we make the summary about the energy sector in general, referring to the developments of 2018?
For us as a company, things have gone well. We have in operation the Banja hydropower plant and a license to export. The climate of energy exports outside Albania is going very well and I think that the changes in the law of 2015 were very important and created the opportunity to export freely. We also sell some of the energy to public institutions in the country such as OSHEE. We think that the process that is being pursued during the auctions of OSHEE is a good process.
Of course not everything is perfect. For example, the recent change introduced by OSHEE for payment terms ranging from 3 months to 6 months, increasing the waiting time for execution, came suddenly. Although OSHEE has fulfilled so far its payment obligations, long waiting periods for completing financial transactions may hinder the company's liquidity.
Moreover, there was some expectation for more progress regarding the opening up of the Albanian energy market, something that did not got materialized. Changes made to primary and secondary legislation have paved the way for raising the Energy Exchange, but related sub-legal acts like the creation of APEX or the time of its establishment were not approved by the government. We hope that the process will advance faster now. However, we recognize that with the establishment of the Stock Market of Energy, there should be a preliminary testing period, which means it will take several years before the Stock Market of Energy is fully operational.
How does Energy Exchange affect the energy sector in the country and what benefits does it bring?
Makes the market more transparent and more open, and through this, promotes more investment. It also enables the implementation of certain regulatory schemes in secondary legislation, such as margin contracts, which are not yet functioning properly. Currently energy trading is based on the Hungarian Energy Exchange, while the establishment of the Albanian Energy Exchange will enable Albania to advance in the region.
Likewise, from what we have understood, OSHEE's division into three new companies is done on paper, but the factual operation of these entities is still pending. It should be understood that moving forward towards the functional operation of these three entities is a requirement established by the Energy Community Secretariat and in line with the energy market model.
It is commented during the liberalization process that started last year. How do you see this process and its advancement?
We welcome such developments but again need an Stock Market Energy to support it, because ultimately, where will they find the energy and the unregulated markets those emerging from the regulated market? This is another reason why an Energy Exchange is so important. We think it is important for the entire market. It is important for Albania, for transparency and becomes even more important for energy trading in Albania, as well as for other supporting mechanisms related to Contracts for Difference.
What are some of the goals that Statkraft has for 2019 and lets talk here especially about Moglicë, which is already in a final stage?
Moglicë Hydropower Plant is in the last year of construction activities. Our objective is to start filling the reservoir in April this year. So share it with us just a few weeks from this important moment for the project. Creating the Moglicë reservoir will take a while and will depend heavily on other elements like weather, rainfall. With the creation of the reservoir, we will proceed with the turbine testing phase that is likely to be somewhere from the third quarter of this year. Then, with the successful completion of all the tests, we will start the operation of the Moglicë Hydropower Plant.
Statkraft applied for a floating photovoltaic plant on Banjë. At what stage are you in touch with this project?
We have received prior authorization from the Ministry of Energy and Infrastructure to continue with the project, an authorization that gives us a range of rights. This means that we are already in the process of selecting different contractors for different parts of this project, such as panel installation, feasibility project, or other requirements related to the final application.
When we have the final authorization, we will also start ordering the materials. We signed a contract with a Norwegian company, Ocean Sun. It is a 2 MW project, not very large, and the investment value is about 2.5 million euros. What we are trying to achieve in this project is very important for the company's objectives. First, the market for floating photovoltaic plants is growing fast, but the cost is far higher than the photovoltaic plants on the ground, and are not yet competitive. Currently, companies use plastic boxes and over them, placing solar panels on a part of the lake.
This works well, but there are some disadvantages, starting with the fact that there are many plastics and the production of these modules within the country would not be feasible, so they should be imported. Many containers and air accessories are not very environmentally friendly.
We are looking at the interest of a company and another technology that will make this project in another way. We hope to use the format of a fish farm, which is pretty much used in Norway and other countries. The idea is to place the membrane within a format that is used for fish tanks and over it to place the panel. This technology has been tested and seems to be working.
If successful, over time we expect this technology to be more competitive compared to the existing technology for floating panels. We aim to find alternatives that give us competitive advantage. We hope that if the technology we have selected will prove successful, we can apply it on a wider scale in different countries. In places where there is potential for solar energy, companies are finding ways to combine the Water and the Sun to better manage the energy.
Normally, hydropower plants do not operate at maximum capacity during the months when there is not much water available. Instead, to compensate, you can use the necessary infrastructure and network connections and use solar production resources for power generation. We expect the cost of this new technology to decrease significantly in the coming years, so the floating photovoltaic plants are another part of interest that Statkraft is seeing.