Sunrise in Vlora, Albania, Photo: Sharon Hahn Darlin, via Wikimedia Commons

In the last two decades, residents of Vlora, a lively tourist city on the Albanian coast, have had a slew of mostly unsuccessful oil and gas projects foisted on them. No wonder a recent event there called on the government to stop its costly fossil fuel experiments and seize the opportunity to declare Albania’s electricity production and consumption 100 per cent renewable.

The city of Vlora hasn’t had it easy in the last two decades. Despite being a long-standing tourist resort, as well as being flanked by the protected Narta Lagoon and Karaburun peninsula, around twenty years ago it was hit by plans for a so-called ‘Industrial and Energy Park’.

The people vs. fossil fuels

In the early 2000s, a 97 megawatt (MW) oil and gas-fired power plant was planned by public utility KESH, aimed at stabilising Albania’s hydropower-dependent power sector. Nearby, Petrolifera Italo Rumena planned a storage terminal for liquid petroleum gas (LPG) and oil products. And the Albania-Macedonia-Bulgaria oil pipeline (AMBO) was also planned to terminate there.

But local people, headed by the Civic Alliance for the Protection of Vlora Bay, had other ideas. The plans were met by protests of up to 3,000 people, a request for a local referendum, construction site blockades and complaints to the World Bank Inspection Panel, the European Bank for Reconstruction and Development (EBRD)’s Independent Recourse Mechanism (IRM) and the Aarhus Convention Compliance Committee about lack of public consultations. 

All three complaint mechanisms found breaches regarding the power plant, and the Aarhus Committee confirmed a lack of public consultation on the wider industrial and energy park as well.

White elephants and oil spills

The AMBO pipeline was never built, but the Petrolifera storage terminal and KESH’s power plant were. The power plant was financed by the World Bank’s International Development Association (IDA), the EBRD and the European Investment Bank (EIB), with loans totalling around USD 100 million. The EBRD also considered financing the Petrolifera terminal, but pulled out in 2008. It is unclear how financing was finally secured.

In May 2016, residents’ fears about Petrolifera were realised. An oil spill at the terminal spread five kilometres along the coastline and led to a temporary shutdown. 

But the only thing spilling from KESH’s power plant is money. Despite being completed in 2009, it has never operated. But it is still maintained, even now – costing millions of euros per year for Albanian electricity consumers, though the exact amount is disputed. 

According to the World Bank, when testing was done in October 2009, a problem was detected with the submerged cooling water intake. In July 2011, a rebuild of the intake was completed. Tests re-started in December of that year, but in January 2012 the plant tripped due to a new failure in the cooling water pipe. Quite why such a fixable-sounding defect has floored the plant for more than 14 years since its completion is still not clear.

Numerous plans for the resurrection of this costly white elephant have been announced, but so far to no avail. Ultimately it stands as a monument to poor planning and unaccountable decision-making.

Renewables diversification is underway

Albania’s in-country power generation is already 100 per cent renewable – but not sustainable, either environmentally or economically. The country’s dependence on hydropower has led to vastly fluctuating electricity generation and costly electricity imports in recent years. And until 2017, its renewable energy support scheme only offered incentives to build yet more hydropower.

As well as putting increasing pressure on biodiversity and communities, the result has been expensive: In the first eight months of 2022, alone, KESH spent EUR 350 million on electricity imports. In addition, 2022 payments to renewables producers cost more than EUR 136 million (ALL 14.5 billion). Almost all of this went to hydropower plants below 15 MW, whose generation decreased exactly when increases were needed.

But the country is diversifying its renewable production, and the results are starting to show. As of June 2023, 119 MW of solar was installed for self-consumption, in 1,249 households and businesses. And a 140 MW solar plant was this week reported to have generated its first electricity.

The problem is, the government – encouraged by the EU and US – is still being distracted by fossil fuels. 

The Trans-Adriatic Pipeline (TAP), completed in 2020, has been built across Albania to take gas to Italy, but with no provisions for Albania to actually use the gas. But the government wants to change this. 

In 2018 it adopted an EU-funded Gas Master Plan, which foresaw ten major projects. First on the list was a transmission line joining TAP to the Vlora power plant, with a potential gas distribution system in Vlore. This was to be followed by connections between TAP and Fier, Ballsh, Elbasan, Durrës and Tirana, a gas storage facility at Dumrea, and in the longer terms pipelines to North Macedonia and Kosovo, and more gas power stations at Korça and Kuçova. Not once in the document are the words ‘decarbonisation’ or ‘phase-out’ mentioned.

In early 2021, Albania also signed an agreement with the US companies Excelerate and Exxonmobil to examine the feasibility of building an LNG terminal at Vlora – a project which even the ambitious Master Plan had not included.

Some of the gas plans also appear in the country’s National Energy and Climate Plan (NECP), which was adopted in December 2021 but needs to be updated. 

Many civil society groups are concerned that Albania and other Western Balkan countries are locking themselves into new dependence on fossil fuels and diverting attention from decarbonisation. And we are not the only ones. In response to Albania’s NECP, the Energy Community Secretariat urged caution, warning the government about potential stranded assets, and recommending a review of its plans for the sector, given that the assumptions in the Master Plan were already ‘outdated’.

In October 2021, Albania declared an energy emergency. Like most Western Balkan countries, it was hit hard by high electricity import prices caused by high gas prices in the EU. 

In January 2022, KESH published a call for expressions of interest to lease a power generating facility that could be quickly deployed as a response to the crisis. The following month, it accepted an offer from US company Excelerate and Italy’s Renco to lease a pair of floating oil power generation plants at a cost of USD 64 million, not including fuel.

The plants, both 25 years old by now, arrived only in September 2022. They were greeted by protests, fuelled by concerns not only about oil spills and air pollution, but about increasing nearby sea water temperatures and damaging this very touristic area. 

But as of December 2023, according to local people, the plants have not operated at all. Sounds familiar?

Since the decision was made to lease the plants, the folly of increasing reliance on fossil fuels has become even clearer. 2023 has smashed all climate records, while Russia’s full-scale invasion of Ukraine has crudely exposed the weaknesses of relying on imported gas. 

Nor is relying on Azerbaijan instead a smart strategy. This October, the European Parliament demanded that the EU undertake a comprehensive review of its relations with Baku, suspend any negotiations on a renewed partnership and reduce its dependency on Azeri gas imports.

How Albania might look in a few years

Albania has twice tried to ensure its energy security using fossil fuels, and neither time has it worked. This is surely a sign that it’s time to try a different model.  

This was also the message sent by participants at an event held in early December, where the Vlora Declaration on a 100 per cent renewable Albania was launched. The Declaration, signed by a group of local people, experts and environmental organisations, asks the government to do the following and pledges its commitment to support such a model: 

• Removal the floating power plant from the Bay of Vlora
• Cancel of the Gas Master Plan for Albania approved by VKM No. 87, dated 14.02.2018, and avoid the use of gas for electricity and heating
• Eliminate artificial procedural barriers to investing in renewable resources, especially in self-consumption photovoltaic systems
• Redouble efforts to transition to a green energy efficient economy based 100 per cent on sustainable forms of renewable energy
• Recognize the fact that the lack of electricity production systems with fossil fuels is no longer a deficiency in relation to the security of energy supply. It is a strong advantage, making Albania well positioned to be a leader in this transition. 
• Harness its potential and move straight to 100 per cent electricity production and consumption from renewable sources.

Albania’s energy future can be bright, but only if it stops being distracted by false solutions.