1 / 14

Analyzing the impact of electricity reforms in Albania and Serbia

Analyzing the impact of electricity reforms in Albania and Serbia. Alexandru Cojocaru and Caterina Ruggeri Laderchi World Bank International Conference “Poverty and Social Inclusion in the Western Balkans” Brussels, Belgium, December 2010. Key findings.

marlie
Download Presentation

Analyzing the impact of electricity reforms in Albania and Serbia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Analyzing the impact of electricity reforms in Albania and Serbia AlexandruCojocaru and Caterina Ruggeri Laderchi World Bank International Conference “Poverty and Social Inclusion in the Western Balkans” Brussels, Belgium, December 2010

  2. Key findings • Poor households most affected by reforms • High reliance on electricity • High share of electricity expenditures in consumption • There is a need to ensure adequate protection to vulnerable households • Tradeoffs between coverage and targeting

  3. Motivation of the study • Electricity sectors in Western Balkans undergoing necessary reforms • Growing energy demand • Need to attract investments and upgrade infrastructure • Tariffs remain below cost-recovery levels and are bound to increase • Key questions: • How will vulnerable households be affected by increasing tariffs? • Are adequate protection mechanisms in place?

  4. Overall methodology • Examine electricity expenditure patterns • In overall energy expenditures • In overall consumption (energy poverty) • Electricity consumption patterns • Types of households • Types of electricity use • Distribution of subsidies • Implicit (via tariff blocks) • Explicit (via the SP system) • Welfare impact of price increases • Consumer surplus • Changes in electricity expenditure shares • Poverty impact

  5. Affordability

  6. High reliance on electricity Share of total energy spending Share of total household spending

  7. Energy affordability supported by • Block tariffs • 1st block: 300kWh • 2nd block: 300+kWh • Earmarked transfers • HH on social welfare • Old-age pensioners residing alone • Disability pensioners residing alone • Civil servants earning less than 35,000 Lek • Discount is 640 Lek / month • Block tariffs • 1st block: 350kWh • 2nd block: 350-1,600kWh • 3rd block: >1,600kWh • Earmarked transfers • 35% discount for first 450kWh for social welfare recipients • 35% discount for first 350kWh for some other HH in social need Albania Serbia

  8. In practice: who benefits from lower tariffs? Serbia Albania

  9. Albania – explicit subsidy better targeting but low coverage Implicit subsidy (via tariff blocks) Explicit subsidy (via social assistance)

  10. … and similar situation in Serbia • MOP coverage is low • 12% of the poor in 2009 • Transfers in 2009 • 27% of MOP-eligible HH • 19% of other HH in social need category • Low take-up due to arrears conditionality? Implicit subsidy (through block tariffs) Explicit subsidy (transfers)

  11. Vulnerability to increases

  12. Patterns of vulnerability – e.g. of 10 percent increase in electricity tariffs Serbia Albania

  13. Even small tariff increase affects poverty Serbia Albania

  14. Summing up • Tariff reforms will continue in the upcoming years • The poor are going to be most affected … unless adequate protection mechanisms are in place • Several protection schemes are currently employed…but assistance can be targeted better • Tradeoffs between coverage and targeting

More Related