Act before the storm

August 20, 2013

Kseniya Lvovsky

This summer, a boat ride between the Komani and Fierza dams is as spectacular as ever. The ferry that I took two years ago is no longer there - local residents have switched to using an improved road network – but one can take a tourist boat. I could see passengers on that boat enjoying magnificent views of dramatic mountain landscapesalong a blue path of abundant water from a speedboat that carried a team of World Bank and KESH experts. We were looking at progress and further needs with rehabilitation of dams along the Drini cascade, one of the major investment programs supported by the World Bank in partnership with several other financiers.

I always find a trip along the Drini cascade a powerful reminder of both the tremendous values and significant risks of the country’s main hydropower project. The abundance of water stored in the reservoirs is the best assurance of reliable and affordable electricity supply and an opportunity, in a wet year, to increase revenues from exports. The touristic and recreational potential is also substantial.

Yet, the risks are daunting.  In a wet year, particularly during massive rains, managing spillover of water without contributing to downstream flooding is a challenge.  Spillway infrastructure urgently needs to be upgraded - with visible erosion of the toe of the Komani dam acting as a vivid illustration of the fury of untamed water. In a dry year, like the one we had in 2012, inability to manage the variability of water resources in an optimal way, amplified by the distribution sector problems, brought the hydropower-dominated energy system to the verge of financial collapse – resulting in mass power shortages.

The combination of a budget-wreaking intervention by the state and favorable weather in 2013 has averted the worst. A better approach, however, would be to initiate electricity imports earlier and save water for generating domestic electricity during months wherein regional electricity prices tend to be higher. The project that brought our team to the cascade is designed to assist with both infrastructure and management improvements.

However, the gravest risk is a seemingly perfect situation on the sunny day of our trip, with plenty of water in the lakes and no storm on the horizon. It is the risk of getting a false impression that the crisis has passed and there is no urgency to take action - some of which could be painful and unpopular. The actions that are needed go well beyond the Drini cascade.

The entire sector is in a state of fragility – vulnerable to weather and the claims of private investors, not able to raise sufficient revenues, not able to meet its legal obligations, or make the others to meet theirs.  To turn it around will require strong commitment and vision of the government that will assume its duties in September. But the government commitment won’t be enough without support and responsible behavior by all other stakeholders - state energy entities, private energy players, businesses, municipalities, and citizens.

Everyone who produces, sells, buys, transmits, distributes, or uses electricity will have to contribute.