Energy Policy
As a member of the Energy Community, Albania must implement the EU acquis, including the rules for the internal gas and electricity market, transmission and interconnections (Third Energy Package). Albania has submit a final draft of the National Energy and Climate Change Plan (NECP) in July 2021 and received recommendations by the by the Energy Community Secretariat in December 2021. The Government of Albania adopted the first version of the National Energy and Climate Plan (NECP) on 29 December 2021. Albania’s first NECP will continue to be developed and updated, taking into account the recommendations of the Secretariat.
Electricity market
In 2015, a new Power Sector Law transposing the European Directive 2009/72/EC was approved by Parliament. It addresses the liberalisation of the retail electricity market, the unbundling of transmission, and the powers of the national regulatory authority. The electricity law set a 20-35 kV eligibility threshold for market liberalisation (20-30% of the market). The new Power Law introduced an obligation to switch to competitive supply for large consumers (over 50 GWh/year) connected to the 110 kV grid.
In 2016, the government adopted the market model for the regulation of the electricity market and a plan phasing out price regulations and enabling free trade on the market. Albania is taking part in the Coordinated Auction Office in Southeast Europe (SEE CAO); monthly and daily auctions within the CAO platform started in 2015 on the Montenegro border and with Greece.
In 2018 the law from 2015 was amended to establish a dayahead electricity market and to remove obstacles to the creation of a power exchange.
In 2020 it was amended again to improve its compliance with the EU acquis and complete the unbundling of power transmission and distribution companies OST and OShEE.
Since March 2020, 35 kV customers can no longer be supplied by the supplier of last resort and customers at 20 kV, 10 kV, and 6 kV should enter the liberalised market in the coming years.
In October 2020, OST and KOSTT agreed to set up a joint power exchange, ALPEX, with a day-ahead market and an intraday market in the future, which should ensure market coupling in the first half of 2021.
In December 2020 the new 400 kV line for the power exchange between Albania and Kosovo entered into operation.
New balancing regulations have been in effect since April 2021, as market participants can now provide balancing services individually and collectively. Independent hydropower producers, who are currently in charge of their imbalance, are anticipated to band together.
Oil & Gas market
In 2011, Albania adopted the EU requirement to hold 90 days of oil stocks, but the current system does not yet comply with this. In 2018, Albania finalised a first draft law on emergency oil stocks, which aims to create a central stockholding entity from 1 January 2023; the final law has yet to be adopted.
There is no wholesale gas market. All retail customers are eligible and can choose and change their gas supplier; households and small businesses can benefit from regulated gas supplies under public service obligations.
In 2015, the Parliament adopted the new Law on the Natural Gas Sector (implementation of the EU's "Third Energy Package"). It introduces unbundling and certification requirements for transmission, distribution and storage.
The Energy Strategy 2018-2030 aims to increase the share of gas in the energy mix from 1% (2018) to 20% in 2030.
Source: Enerdata
Last update: 07 2023