Opening of the market launches the relevant projects

Opening of the market launches the relevant projects

Author: Dr Lorenc Gordani

Legal Adviser in Albania Energy Market

market liberalization brings closer projects by dr lorenc gordani brings closer the big projects dr lorenc gordani big projects by dr lorenc

Albania, like the rest of the Western Balkan countries, intends to promote the liberalization of the energy market and complete regional integration. Further, the fulfilment of the renewable and security targets of the country, determined by the absence of additional fiscal space available, has pushed continually to encourage the investors from the private financial system, especially the foreign capital to enter in energy sector.

The foreign investments that have already reached about 1 billion euro by 2017, stimulating a growth to 3.8%. The largest share of foreign investment stocks, with over 70% is focused in energy (including oil and gas). The above mixed with the favourable technical potential in hydroelectric investments has made the reach over $ 1 billion investment in HPP. A compressive amount with a growth in real terms by around 10% only in 2017.

A situation becoming more and more dynamic, based to the latest data published by the regulatory authority in 2017, with installed capacity increased by 86 MW, or more than 14.5% over 2017, reaching a capacity in greenfield project of approximately 590 MW. The tendency in consolidation is seeing the develop of the medium size plants and phasing out of feed-in PPA, were the first signal came with the 73 MW of Hec Banje by Devoll Hydropower, and now the Hec Fangu 74.6 MW by Ayen Energi a.s.

This trend is following in the photovoltaic parks, with the launch of the international tender for the construction of the PV plant above 50 MW in Akerni (Valona). Then, completing with HPP “Peshqesh” by 27,94 MW and the coming soon HPP Moglicë by 183 MW, as well as also with the planned big round tender in PV of the EBRD, to further continue the complete of the gigantic turbo gas of Korca by 480 MW support by IFC, and revitalise of the strand invements, that will make very close that major part of energy came from IPP instead of up to now 137 HPP privileged producer up to 446 MW covered with PPA by feed in tariffs for 15 years.

In more, consider the lower cost of hydropower production, to remember is that unexploited hydropower potential, around 615 MW is made more by medium and big size power projects. As well as there are also to calculate the eventually contribute of capacity already awarded in wind above the 2 GW, part of which after the cancellation has been putted again in the terms for their deployment. In more, to highlight is the high factor of production of CCGT and also HPP with dam but also wind technology compared to already build SHPP.

Then the obvious question is to what is due this revitalise of projects without need or with very few of direct subsidies? Why this has not happen up to here and similar. This trend for certainly reflect the imminent opening of the market and the close plans for the launch of the energy market. To maximize the sustainability part of the energy strategy, by putting into practice the EU’s Third Energy Package since 2015, the country is working in parallel with the advancement of the national electricity exchange platform (APEX), that of intraday market and balancing as well as expanding network capacity physically and through optimization management by the joint auction office (SEE CAO) of Podgorica.

Moreover, the up to here delays with 2 -3 years, by the beginning of 2019, the Albanian market is expected to be coupled with that of Kosovo or directly in the broader context, among many option, more possible seems the coupling with Italy, Montenegro and Serbia (AIMS project kicked-off in January 2018). A process that is contributing to the acceleration of the opening of the energy market in Albania, which in turn affects other countries of the Southeast Europe.

Then consider the above tendency is turning attention to the develop of large power plan, which see by first the large HPP. The huge project directly reduce production costs and promote the stand by market-based incentives. As well as the development of the regional electricity market ensures that project developers have a wider opportunity for their production. In more, the new road network in development throughout Albania also enables projects that were considered up to here to be unattainable.

As the increase of interest in larger plants has also its positive affect in the environment and the face with an integrated approach toward the territory, due to the entrance of larger companies with more financial resources and knowhow and at same time avoids the current fragmentation practice such as happen with small HPPs. For the economy it become also a pivotal effect for the attraction of big international companies, creating employment and industrialisation of that part of projects which are competitive in regional and international level.

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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