Time for a paradigm shift from hydro to photovoltaic?

Time for a paradigm shift from hydro to photovoltaic?

Author: Dr Lorenc Gordani

Legal Adviser in Albania Energy Market

government decision installed capacity mw capacity granted thought

1. A Snapshot in Albanian Generation Capacity

Albania is fully dependent on hydropower for electricity generation; nearly 100 per cent of the country’s domestically produced electricity comes from hydropower. The mountainous nation is home to eight major river systems and more 140 mid-small fluvial streams. The major of them, Drin River located in northern Albania, hosts a relevant cascade with four hydropower stations for an installed capacity around 1,400 MW.

Notwithstanding more than 25 years of efforts to develop the private sector of generation, the public incumbent still represents around 65% of the country’s total electricity production. The remaining 100 MW of installed capacity, distributed over the country, have passed in the hand of privates. To which attracted by the generous incentives are added new hydroelectric capacities build by private investors for about 700 MW.

Then, the renewables have started to take off, even with some difficulties and the problem that the most is concentrated in the north hydropower sources, except few individual small projects, such is Urban Waste Processing Plant of Elbasan by 2.85 MW, Photovoltaic Central of Korça (UKKO) by 1 MW, etc. A dominance on hydropower (and imports!) that made necessary a shift of the paradigm toward a diversification thought the protecting of the environment!

2. A new regulatory framework on alternative renewables

The need to reduce dependence on hydro with the rapid falling technology costs on PV landscape, has led to favourably provision on PV and wind, introduced with the new RES Law at the begin of the 2017. A choice to PV was most logical and emphasized by the perfect match that the periods with lack of rains are compensate by more radiation of the sunshine: the country has in average 240-300 days with sun for year, with exploitation of solar energy production range among 1500-1700 kWh/m²/a.

Then, from the mid-spring 2017, there was by first the open of opportunities for self-consumption in Net-metering regime, for households and companies up to 500kV, granted thought a simplify permission procedure (taking in all around 30 days). Further, on May 2017, the MoU among MIE-EBRD, span the way to the government decision to guarantee the purchase of electricity with PPA by 100 €/MWh, granted thought authorisation procedure for central up to 2MW for a total capacity 20 MW.

3. A Revolution Era to Photovoltaics Deployment?

Notwithstanding the above acceleration these are strongly finance intensive investments and need for the put in row all the aspect before taking in consideration their implements. Above all are compose by many phases, from design to final approval and signature of contracts and PPA. As it is important to note that involvements to such procedures implies the submission of reliable empirical studies, business plans, and similar, and must be brought by companies that have expertise and liquidity.

The boost of their outcome learning from the past mistakes is a must especially for mid and large project! Then, a recent government decision, has sets the criteria and conditions for new building capacities auctions over 2 megawatts, introducing also the concept of call for tender for new capacity to be active very shortly through organized auctions for plants among 10-30 or even by 50 MW. To this direction, recently the country has increased the capacity offered for photovoltaic investments for a total up to 120 megawatts, conform the plans made public for media by Entela Çipa, high executive senior of the Minister of Energy from March 2018.

Thus, the legal framework was prepared by fully responding to the concerns verified so far in practice, aiming for a shift paradigm towards photovoltaics. The fact is that the costs of photovoltaics are continuously decreasing. However, regard the skills needed, the hydroelectric is the only one that traditionally seen deployment in practice so far in Albania. Therefore, the companies involved in photovoltaics have yet to show-off their skills. In any case, for both type of investments, the preliminary phase is fundamental for the take-off of any reasoned decision-making, and as the experts who have long worked in this sector as Ismail Beka admonish that important this time is “not to be burned by the sun”.

Disclaimer: The ownership and the opinion expressed pertain to the author. While all the effort are made to ensure the accuracy of this publication, it is not intended to provide legal advices 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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