Albania Adopts New Support Schemes For Solar And Wind Power Plants

Albania is almost entirely depending on hydro power as over than 95% of the electricity is generated by hydropower plants. This disbalance underestimated the great potential that Albania has in developing other sources of renewables, such as solar or wind power plants.

In February 2017, the Parliament approved the new law on Incentives for Using of Energy from Renewable Sources (the 2017 RES Law), which is partially aligned with the EU RES Directive No. 2009/28/EC, as part of the Acquis - an obligation Albania has as a potential candidate for accession to EU.

The 2017 RES Law establishes the broad framework for the auction mechanism and Contract for Difference (CfD) in future renewable projects. Currently, the state support in support schemes of RES in energy market in Albania is intended to be restructured for renewable energy sources and aims to replace the existing scheme of the feed-in tariff with a system based on CfD.

The new Albanian market model (approved pursuant to law 43/2015 "On energy sector" as amended), provides for the trading of energy from renewable sources, to the advanced/liberalized market aimed to be opened by means of establishment of the Albanian Power Exchange (intended to start from January 2019).

Auction process

The Albanian government has recently passed a resolution in July ("CMD 349/2018 on RES Support Schemes"), designating the means for promoting the use of energy generated from solar and wind power plants and which stipulates the procedures for electing the eligible projects to benefit from such means.

According to the 2017 RES Law, feed-in-premium tariffs for renewables with over 2 MW of installed capacity should be granted through a competitive auction process, on non-discriminatory, clear and transparent basis. Notably, the CfD will not apply to small RES facilities (i.e. projects with an installed capacity up to 2MW and 3MW in solar and wind energy respectively), as these projects are supported by separate measures.

Specific rules on how the auction process will be organised are broadly introduced in the CMD 349/2018 on RES Supportive Measures. It therefore remains to be seen whether the supportive scheme will help to create a suitable investment environment for RES projects in Albania.

Just recently Albania has opened the call for bids to build the Adriatic country's first solar power station, for a 30 years term, which can be renewed, intended to have an initial installed capacity of 50 MW (that will...