Albania, with a population of around 2.8 million, is almost 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 2018, in GWh
Hydropower: 8,552 GWh
Source: Albania Energy Regulator Annual Report 2018
Albania is one of the few Balkan countries producing oil – 959,000 tonnes in 2017. The state-owned Albpetrol is active in the development, production and trade of crude oil, while the largest oil producer is Bankers’ Petroleum, previously supported by the EBRD and IFC and now Chinese-owned.
Albania is not connected to international gas networks at the moment, though the controversial Trans-Adriatic Pipeline has been built on its territory. The country produces a small amount of gas, mostly used in oil production and the refining industry. It also has an outdated pipeline network of 498 km, which is mostly not operational.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 per cent by 2020. By 2017 it had managed 34.6 per cent renewable energy, (this would be higher in a wetter year), 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. A solar auction was held in Albania in 2018, and was won by India Power. The consortium is set to build 100 MW of solar power in the Akerni region near Vlora, consisting of 50 MW with support, to be purchased by the Government at EUR 59.9/mWh over 15 years, and another 50 MW, without support, to be sold at the market price.
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.
IRENA Additional cost-competitive potential
|SEERMAP Decarbonisation scenario 2050 minus 2016||2139 MW
|SEE-SEP EU Road scenario||1910 MW
Albania has significant potential for energy efficiency and has a target to increase energy efficiency by 20 per cent 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 24.4 per cent in 2018.
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