Albania paves way to auction for solar parks

Albania paves way to auction for solar parks

Author: Dr. Lorenc Gordani

Legal Adviser on Energy Issues

auction for solar parks 2 mw july 2018 auction for solar energy

The up to here experience with photovoltaic parks by 2 MW serves as a good base for more relevant investments. A new procedure released aims auctions by 10-30 MW for a total of 100 MW. Thus, fundamental became the learn lessons from mistakes in hydropower plants but also those made by other countries in photovoltaics!

Today, the possibility of producing solar energy in Albania is no more a novelty! Even recently, the government has increased the capacity offered for photovoltaic investments for a total up to 120 megawatts. For plants by to 2 MW, the current purchase price based on the formula that is calculated on the parameters of return on long-term investment, thus guaranteeing 100 euros per MWh for 15 years, as recently reconfirmed also in an interview for media by Entela Çipa, advisor to the Minister of Energy.

The novelty, in the same interviews was related to the new trend of investments in PV. There it was noted that the remaining 100 megawatts will be given very shortly through organized auctions for plants over 2 megawatts, and only after a further redistribution can be taken for those below 2 MW. Actually, this statement comes in confirm of the recent government decision, which sets the criteria and conditions for new building capacities auctions over 2 MW.

In practice, based on the new framework for renewable sources, the tariff that investors will receive will come out by the auction procedure. This make a breakthrough up to now practise based to direct agreements for the installations by 2 MW. A framework that introduce in practice the idea of auctioning for new capacity, transposing the recommendation come from the main international stockholders of the energy sector in Albania.

A transformation indeed similar to what is happing now everywhere with the introduction of the market base concept for the deployment of the new renewable. Auctions that will list the criteria that are in process of preparation with the technical support provided by the EBRD. A procedure that will be open at least for a period of 30 days.

Among the most important details are multiple guarantees from the Ministry of Energy through the state own distribution company, which has also recently been assigned the role of the renewable energy operator. In this regard, OSHEE assumes the public service obligation (PSO) to connect the photovoltaic system to the national electricity network and to withdraw and pay all the energy produced through a preliminary contract for the sale of electricity (pre-PPA). In addition, a particular innovation is the mechanism envisaged to guarantee penalties for any delay.

Then, on above while the will of the legislator is very clear to incentive these investments with the tariffs coming out from the investors themselves, it is essential that it be maximized in the best way in individual projects. So, depending on the feed-in premium fee, the decision making of each project should be considered as a result of pure sound technical studies. This means that it will have to go through long-term sensitivity scenarios linked to specific investment conditions, including them in construction, management, legal, regulatory, political risks.

On above, the legal framework is prepared in full response to those concerns that have so far been verified in practice. However, the fact is that the energy field is constantly in changing, and challenges have not been missed anywhere in other European countries. For this reason, the more it is worked in the preliminary stage on future scenarios, better the solutions can be reflected in studies, contracts and other documents, hence the better will be the preparation for any future development. However, it remains that mitigating risks are skills that are acquired only with long and direct experience in practice.

This article was first published in Albanian version on the official site of Radio Television Scan.

Disclaimer: The ownership and the opinion expressed pertain to their author. While all the effort are made 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. For any specific technical or legal advice on the information provided and related topics, contact us through “lorenc_gordani@albaniaenergy.org”.

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