Annalise by Dr Lorenc Gordani
Legal Adviser in Albania Energy Market
The today Albanian energy market, similar to the transformation in many different fields of economy, has taken an in-deep reform that in some way were even difficult to be imagined only some times before. In practice, the country has adopted the same legal framework, has proceeded with integrating the institution and struggling to enforce the rule of law applied to the sector in all the European countries. An effort, first of all to our direct interest, but in the same time, as part of the integration process with the openness of the energy market in Albania, is giving a contribution to foster the opens of other countries in South-East Europe.
As know the energy sector, after removal of the significant legal obstacles to establishing organised electricity markets, has to create an own power exchange, enabling wholesale market trade or if economically justified considering liquidity and economic viability, to adhere to power exchange. As well as the establishment of a functioning national balancing market based on the above model; eliminate long-term contract in the generation, and adopting national action plans for phasing out of regulating price in retail (since January 2016).
How all the above can be done? With the purpose to keep as much as possible concise, even the issues are complex and need many considerations, a radical game of change is a precondition. Lately, in its report that serves as a map for the Albanian government to achieve the goal of the 2030 development agenda the United Nations agency highlights three platforms were to be the focused: the governance and law, the green economy and investment in human capital.
Maybe due to my personal affinity with academia, I am most keen to the idea of the start from investing in human capital, to make possible a full liberalisation at least within the next years (based to the target post from the new energy strategy). Then, the potential is to our hand, but what we may aspect from the tomorrow depend in what our universities do or do not have at all in their curricula, related to regulation of the power sector, market liberalisation and regional integration, sustainable development, efficiency and management of energy, management of renewable investments, etc.
In fact, the matter of the energy market, as an interdisciplinary discipline, is developing everywhere. But, in Albania somehow is primary the contribution of the regulator with a legal background, because, within this stage of development, there is a need to lead politics, create market and have investments through the legal support (or better highly detail decrees!). Usually, in developed countries, more space is given to economists, and in the most advanced to engineers, as someway in last is a matter of technology, innovation, electronic platforms, etc. However, above all fundamental is the role and contribution of the universities.
Since the first step towards market integration (or more precisely the market coupling) is seen to be done with Kosovo, it has to start directly by building a join Energy Council. A body that will help to deal with the main challenges posted, advising the public authorities and helping in creating a regulatory tradition in the field of energy. In public field similar experiences are already present in national levels such as the economic council or the investments, but the similar experience is seen useful an in a lot of fields even by private initiatives frequently developed in the academic level of universities (e.g. Economic Forum of Tirana, etc.).
Further, a lot has to be done to enable public companies. Lastly, the WB has been involved with the reconstruction plan of the energy sector, and the acceleration of the reforms. The consultancy are supporting in continue the OSHEE (and of course other KESH and OST), with fully unbundling, need a better determination of the losses, etc. However, the energy market consists of two parts strongly inherent to each other: the wholesale and retail market. The core of issues is that with the first have to do with some (mostly public) companies, but on the retail side there are a lot of small companies and sensitive consumer. To understand this last challenges, it can be reminded that still many developed countries are continuing to maintain the regulated tariffs (out of 19 from 28 countries).
And for concluding, keeping faith to the promise for staying concise, in the EU’s latest action plan, which has put in the spot the sustainable development and consumer attention, it was prepared a proposal up to 4600 pages! Then the task is rather challenging even only to simply handle all the matter, however, the experience up to here as to serve of something, especially if there will be a particular care on the improve and simplifies of the investment climate, boost the performance of private sector providing support for pre-feasibility study or business plans, combined with technical expertise and advisory to the promote the pilot projects, as well as the increase of access to finances. Nerveless, the all have to be made for the people and of course in last definitely is going to be made by the people.
Disclaimer: All opinions expressed pertain to the author. While all efforts 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 its related topics, may contact us through “firstname.lastname@example.org”.
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