Renewable energy

State of compliance

  • National Renewable Energy Action Plan

    National Renewable Energy Action Plan

    Albania has made genuine progress towards the 38% renewable energy target for 2020. The statistical data submitted to EUROSTAT revealed that Albania has reached a 37,1% share of renewable energy in gross final energy consumption in 2016, surpassing 34,3%, the median trajectory 2015-2016. This brings the country closer to reaching the 38% target in 2020. Adequate measures to increase investments in renewable energy projects other than hydropower have to continue while energy efficiency measures shall keep the gross final energy consumption under control.

  • Quality of the support schemes

    Quality of the support schemes

    According to the Law, the scheme for granting support to new projects, replacing feed-in tariffs with feed-in premiums (as contract for differences) in compliance with Guidelines on State Aid for Environmental Protection and Energy 2014 – 2020, was postponed until 2021. Nevertheless, the country is on track to reach the 2020 renewable energy targets. In August 2018, the Ministry of Infrastructure and Energy launched the first auction to grant support for new projects. On 14 November 2018, Albania successfully completed the first-ever renewable energy support auction in the Energy Community. The winning consortium is to build the country’s first solar power plant in the Akerni region near the city of Vlora. The auctioned volume was 50 MW with support, to be purchased by the Government at 0.0599/kWh over 15 years, which is lower than the base and peak prices at the Hungarian Power Exchange (HUPX), the reference for the electricity import price in the region, registered in August and September 2018. Another 50 MW, without support, is to be sold at the market price. 

    Besides the long standing support scheme for the promotion of energy from renewable sources from hydropower, ERE adopted feed-in tariffs for solar photovoltaic and wind in 2017. In November 2017, the Government adopted a revised methodology setting the tariffs for existing priority producers to address overcompensation under the existing scheme and ending the period of instability for current investors in hydropower capacities. In January 2018, ERE published the decision with the tariffs for small hydropower producers calculated based on the methodology and valid for 2018.

    To ensure compliance with the Guidelines on State Aid for Environmental Protection and Energy 2014 - 2020, the 2017 Law on Promotion of the Use of Energy from Renewable Sources introduced a support scheme based on contracts for difference, which are equivalent to a sliding feed-in premium system. The total support available will be determined by auctions for producers above 2 MW of installed capacity. The renewable energy producers will sell the electricity in the market and receive the variable premium as the difference between the auction price and the electricity market price. Currently, Albania is working on the introduction of the first competitive procedure to grant support to solar PV projects totaling 50 MW by 2020, as planned in the NREAP.

    A draft regulation on the methodology for the calculation of renewable energy obligation for the promotion of energy from renewable sources and compensation for the priority producers has been submitted by the Secretariat to the Albanian authorities in July 2018 to implement the provisions of 2017 Law.  Currently, the renewable energy obligation is included in a non-transparent way in the distribution access tariff and paid only by the final electricity customers connected to the distribution grid, discriminating against the final customers connected to the transmission network that are excepted.

    The rules for the net metering scheme for PV panels on rooftops with a capacity of up to 500 kW provided for by the 2017 Law have not been finalized and consulted with stakeholders yet.


    Cooperation mechanisms

    The provisions related to possible cooperation mechanisms between Albania and other Contracting Parties or EU Member States to reach the 2020 targets have been transposed by the new Law. Albania has no plans to use the cooperation mechanisms for the promotion of renewable energy by 2020.

  • Integration to the grids

    Integration to the grids

    The Laws on Power Sector and on the Promotion of Energy from Renewable Sources provides for priority and guaranteed access of renewables to the network and priority dispatch of electricity from renewable sources. However, secondary legislation is incomplete and not fully transparent. In practical terms, the distribution system operator has to improve the methodology determining the costs of connection to the grid or grid reinforcements and transparency towards investors. There is no methodology adopted for setting the cost of connection to the transmission network. Standard balance responsibility is introduced by the Law for all renewable energy producers larger than 2 MW, however, an exemption for priority producers is given until the creation of a balancing market but not later than 2022. In 2018, Albania started the implementation of transitional balancing rules, introducing non-discriminatory imbalance settlement. Currently, Albania fails to implement the requirements related to access to and operation of the grids detailed in Article 16 of Directive 2009/28/EC.

  • Administrative procedures

    Administrative procedures

    The Ministry of Infrastructure and Energy together with the Agency for renewable energy sources, as the authorities in charge of the development of renewable energy, have to scrutinize the implementing legislation and review it to ensure compliance with the requirements of Article 13 of the Renewable Energy Directive. This relates to the transparency towards the investors and the need for streamlined and simplified administrative procedures. The designation and implementation of a one-stop-shop for small projects has to be made with regard to the adopted legislation.

    Guarantees of origin

    The regulation on the issue, transfer and cancellation of guarantees of origin remains to be adopted by the regulatory authority as the designated body. Currently, Albania is not in compliance with this requirement.

    Renewable energy in heating and cooling

    Compliance with respect to policy measures to promote the use of energy from renewable sources in the heating and cooling sector remains at a low level, since it is only marginally addressed in the 2017 Law on Promotion of the Use of Energy from Renewable Sources. More progress in this area is expected with the implementation of the Law on Energy Performance of Buildings adopted in November 2016. The Law includes provisions for incorporating renewable energy technologies in newly built or renovated buildings to transform them into nearly zero-energy buildings. The establishment of an energy efficiency fund would also contribute to financing renewable energy projects in the heating and cooling sector. However, no progress in implementation has been registered in the past year.

  • Renewable energy in transport

    Renewable energy in transport

    The compliance status of renewable energy in the transport sector is marked by the total lack of progress in transposition and implementation of the relevant provisions of Directive 2009/28/EC, except setting the target of 10% by 2020 within the country’s NREAP. The 2017 Law on Promotion of the Use of Energy from Renewable Sources only briefly mentions the transport sector, and the 2008 Law on the Production, Transport and Trade of Biofuels and other Renewable Fuels in Transport is not compliant with Directive 2009/28/EC and was actually never enforced. The Ministry had two approaches – to upgrade this existing Law or to develop a new one. The latter approach prevailed, but a new law has not been finalized and brought to the Government in the last two years. Thus, all requirements for the sustainability regime and to establish a certification scheme and the relevant verification body as required by Article 18 of Directive 2009/28/EC, and as announced by the NREAP, have yet to be transposed and implemented. Actually, the production and consumption of biofuels is happening in Albania, only they cannot be calculated towards the targets since sustainability is neither verified nor even required.