Albania foster progress on sustainable energy markets by Dr Lorenc Gordani

Photo Source – Energy Community Secretariat’s WB6 Sustainability Monitoring Report 06.2017

Albanian landscape of energy sector has recently seen introduce of the important changes. The country in parallel with the process of liberalization is working to achieve a future with reduced carbon emissions and sustainable power sources. Keeping here to the pillars of the Western Balkans Sustainability Charter singed in Paris 2016, there is still need of a lot of work for putting in place the road map targets taken in framework of the 6 Western Balkans (third step of Berlin process).

I. Improve the Governance for Energy Efficiency

Even the progress in efficiency field are still very limit, a first positive outcome is related to the institutional configuration came out after the political election, that seen the merger to one authority such as the Ministry of Infrastructure and Energy of the previous Ministry of Energy and Industry and the Ministry of Urban Development. Further, on the begin of December 2017, the country has adapted the 2nd and the 3rd Energy Efficiency Action Plan (EEAP).

The last period have seen also the going ahead with the first large scale projects in building renovation. While it is already in implementing a project worth 9m euros for the renovation of university campus of Tirana it was signed a grant agreement by 6.5m euros among Albanian public authorities and German government. Saving energy through improving efficiency is one of the key components promoted by German government in Albania, bringing through the KfW the investments package above 15m euros.

However, in this stage essential will be the speedy adoption of the set of by-laws to implement the new legislation by Albania’s, as well as the setting up of a dedicated energy efficiency fund. Nerveless, consider the actual lack of expertise, durable impact can only be achieved through a significant amount of additional technical support and assistance, and the leaders embrace of the principle ‘energy efficiency first’ as a really beginning of a game of change on efficiency process.

II. Implement Smart Support Measures Improving Sustainability of Energy Systems

Albania has made particular progress compared to other countries of the region in the field of renewable. By first, the new RES Law has introduced a substantial change of the support schemes, by substituting the feed-in-tariff scheme (fixed-price FiT payments), with the so-called ‘contracts for difference’ scheme. This means that renewable energy producers will compete for the investment to be made and the support of the energy sold in the market, receiving a variable premium based in the price that will come out from the market auction.

By the other part the adoption of the Net Metering Scheme was a significant step towards ensuring compliance with the Renewable Energy Directive (“RED”) and formulating the policy needed to deployment of Distribute Renewable Resources (“DER”). Specifically, to meet the requirements repeatedly expressed by the World Bank reports, in particular the “Doing Business 2014”, the recent interventions of the Ministry of Energy and the Energy Regulatory Authority have already opened the way for the network to receive energy input produced by businesses and households by generating distributed resources based on net energy measurement scheme up to 500kW – still non functionally.

Further, following to the sign on May 2017 of Memorandum of Understanding among the European Bank for Reconstruction and Development (EBRD) and the Albanian Ministry of Energy and Industry (MEI), it was span the way to the government decision on methodology and the Albanian Energy Regulator ERE on establishment of the regulated tariff for central solar central up to 2MW and wind central up 3MW with 15-year contract respectively by €100/MWh and €76/MWh. Process that have seen the receive more than 20 projects to be granted thought authorisation procedure still under evaluation process by ministry of energy.

In same time, the new law on renewables has not overlooked the “existing preferential energy producers”, that have concluded concession contracts with the ministry of energy before the entry into force of the new law and have completed or are planning to complete their plants within 31 December 2020. Then, they have been subjected at the end of this year of a new agreed methodology for setting the price for the electricity produced along 2017.

In last, based on the above MoU among MIE-EBRD, on cooperation to develop the regulatory framework for solar power and the subsequent development of solar power projects, the EBRD has proceed on begin of January 2018, with the open of tender call on “Support to the Government for Development of Solar Powered Capacities” to assist in the implementation of a competitive bidding process up 100 MW solar PV capacity in Albania.

III. Foster Climate Action

On this direction, it see of particular interest the propose of a law on climate changes by the ministry of the environment. However, the above based at the assessment that it considers impossible to adopt any scheme for the fact that Albania is not a member country of the EU and is considered as a country with low emission levels. The finding that it is currently not based on data measured directly, consistently and accurately, since there has not been any complete legal framework and necessary infrastructure capacities in Albania.

Then it can be observe that the law in preparation by the Ministry of Environment does not optimally address the essence of its intervention, since did not establish a scheme for the release of greenhouse gas emissions permits within the Kyoto Protocol mechanisms recently amended by Directive 2009/29/EC. In fact, Albania as a country that aims to become part of EU, should seek to establish a trading scheme to further align with Community schemes.

Moreover, not only within the framework of the WB6 process on 4 July 2016 by means of the Paris Sustainability Charter, but also those overtaken in the framework of the obligations of the country and the region regarding the COP 21 process, etc. it must advance rapidly towards the creation of a transparent and functional framework for issuing and trading green and white credits. A scheme that go in harmony with the new framework in the renewable energy sector, which already foresees that the construction of new capacities will be made on the basis of auctions.

Disclaimer: The consultation of this article can be made through its original source. The authorship and the opinion expressed pertain to their authors. While all the effort are made by Esc Adriatic to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations may differ and should be discussed with an expert and/or lawyer. For any specific technical or legal advice on the information provided and related topics, contact us through “esco@albaniaenergy.org”.

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