Albania, with a population of around 2.8 million, is entirely dependent on hydropower for its electricity supply. This gives it an advantage in decarbonising its electricity sector but also makes it highly vulnerable to the changing climate, and means that it has to import electricity most years. It also has a 98 MW gas/oil fired power plant at Vlora, financed by the World Bank, EBRD and EIB, which has never operated due to technical faults.
Electricity generation in 2015, in GWh
Hydropower: 5,895 GWh
Source: IEA statistics
Albania is the largest exporter of crude oil in the Western Balkans (872 000 tonnes in 2016), with crude oil production of 1.06 million tonnes in the same year. The state-owned Albpetrol is active in the development, production and trade of crude oil, while the largest oil producer is Bankers’ Petroleum. In June 2016, Shell commenced drilling an appraisal well at Shpiragu-3 oilfield.
Albania is not connected to international gas networks at the moment, though the controversial Trans-Adriatic Pipeline is under construction on its territory. The country does produce a small amount of gas (up to 34 mcm in 2015), mostly used in oil production and the refining industry. It has an outdated pipeline network of 498 km, which is mostly not operational.
Albania has undertaken commitments to increase the share of renewable energy under the Energy Community Treaty to 38% by 2020. By 2015 it had managed 34.9% renewable energy but had not diversified its electricity generation at all.
Until 2017 it only offered renewable energy incentives for hydropower and as a result solar PV and wind have remained underdeveloped, while uncontrolled hydropower development has caused increasing discontent and damage to protected areas.
Albania is the only country in the Western Balkans to have completed new large hydropower plants in the last decade and as of the end of 2016 it had new fewer than 17 operational hydropower plants of more than 10 MW. Even for the larger plants, financing is often impossible to trace, but known sources include the IFC, EBRD, Raiffeisen and other commercial banks.
Albania has now started moves to offer incentives for solar and wind developments but as these are not yet operational, it is not clear when they will start to have an impact on actual construction.
Unfortunately Albania also plans to construct new gas power plants, thus undermining its decarbonised electricity supply. The largest of these would be a plant of up to 500 MWe at Korce proposed by Ivicom. The IFC has been involved in supporting its development.
Albania has promising potential for wind and solar, but as with all the countries in the region, different sources put the exact figures at quite different levels, depending among other things on whether they use sustainability criteria.
Additional cost-competitive potential
Decarbonisation scenario 2050 minus 2016
EU Road scenario
Albania has significant potential for energy efficiency and has a target to increase energy efficiency be 20% by 2020 under the Energy Community Treaty. Inefficient use of energy represents a major concern in the country, especially its high distribution losses which totalled 28% in 2016.
- Energy Community Implementation Report 2017
- IEA statistics
- Mott MacDonald: REGIONAL STRATEGY FOR SUSTAINABLE HYDROPOWER IN THE WESTERN BALKANS. Background Report No. 1 Past, present and future role of hydropower, Final Draft 3 November 2017
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