Project Summary: Addressing the Challenges of Intermittency in Renewable Energy – The Case of Albania
Introduction
Albania’s electricity sector has faced persistent challenges over recent years, which have exposed critical vulnerabilities in generation capacity, grid efficiency, and infrastructure resilience. The 2020 energy crisis underscored these weaknesses, as low power generation combined with high grid losses severely strained the system’s ability to meet demand. This was further exacerbated by the 2022 drought, which significantly reduced hydropower output—a key renewable resource for Albania—and highlighted the sector’s susceptibility to climatic fluctuations. By 2024, continued underperformance in generation made it increasingly difficult to maintain grid stability and satisfy rising energy consumption needs.
These cumulative issues have acted as a catalyst for change, driving the Albanian government and energy stakeholders to prioritize diversification of energy sources alongside crucial investments in grid infrastructure improvements. Recognizing the seasonal nature of supply challenges, it is evident that summer-related generation deficits often extend into autumn, amplifying pressures on the system. As such, there is an urgent need to expand solar photovoltaic (PV) capacity to bolster electricity supply during high-demand periods and reduce reliance on vulnerable hydropower resources.
The financial implications of current generation shortfalls are substantial. Gaps between electricity demand and supply have resulted in millions of euros in lost revenue—funds that could otherwise be channeled into further development and expansion of Albania’s energy generation capabilities. Addressing these losses through strategic investments is essential for fostering a more sustainable and resilient energy sector.
Albania’s power transmission and distribution (T&D) network faces longstanding structural and operational challenges, particularly in terms of efficiency, reliability, and aging infrastructure. Transmission and distribution losses remain exceptionally high, averaging approximately 20%, which far exceeds the European Union average of 4–7%. These excessive losses impose a significant financial and operational burden on the national electricity system, reducing available power and increasing costs.
The physical infrastructure further compounds these issues. The 35 kV network encompasses roughly 1,130 kilometers of transmission lines and 102 substations, many of which have been in service for over 40 years. Similarly, the 110 kV network spans 1,693 kilometers but is characterized by limited meshing and outdated components, which restrict grid flexibility and resilience. Critical lines such as the 220 kV Tirana2–Rrashbull connection are operating at full capacity, creating bottlenecks and reducing the system’s ability to manage peak load demands effectively.
To address these systemic challenges, Albania has initiated several modernization and investment projects aimed at enhancing grid performance and reliability. A Five-Year Investment Plan launched in 2018 dedicated €70 million toward reinforcing the national transmission network. In 2023, a 30-month project to modernize the Supervisory Control and Data Acquisition (SCADA) system commenced, aiming to provide real-time grid monitoring and automated control capabilities, thereby improving operational efficiency and response times.
Additional regional improvements include a $20 million upgrade completed in 2022 in the Shkodra region, designed to reduce losses and improve overall system performance. Moreover, with financial support from KfW, a comprehensive substation modernization initiative began in 2024, targeting 11 substations along the Tirana–Durrës corridor. This corridor is a strategic focus area due to its dense population and industrial concentration, and the upgrades are expected to significantly enhance grid reliability and responsiveness.
Collectively, these efforts represent critical steps toward transforming Albania’s electricity transmission and distribution network into a more efficient, secure, and future-ready system, capable of supporting the country’s evolving energy needs and integrating higher shares of renewable generation.
Results
Progress Made
A phased photovoltaic (PV) deployment plan has been initiated, targeting an annual increase of 120 MW starting in 2025, with the goal of reaching 1 GW of installed PV capacity by 2030. This initiative aims to mitigate summer energy deficits caused by reduced hydropower output during droughts.
A similar phased strategy for wind energy development is under evaluation, aligned with the 1 GW target. Simulations indicate its potential to enhance grid stability during seasonal shortfalls.
Hydropower storage capacity has been assessed to provide at least one hour of full grid supply, offering crucial support during peak demand or renewable intermittency.
Historical electricity demand data has been analyzed, and future growth projections have been modeled through 2030 to inform infrastructure planning and investment strategies.
Current Challenges
The national grid faces high transmission losses and infrastructure limitations, hindering the efficient integration of new renewable capacity.
Many regions with high renewable potential are designated as environmentally protected areas, complicating site selection for large-scale projects.
Key Insights
Hydrological models suggest a potential 15% reduction in water levels by 2050, posing long-term risks for hydropower reliability.
Solar potential is considerable, with average Global Horizontal Irradiance (GHI) of approximately 1,665 kWh/m²/year, supporting large-scale PV development.
Wind energy potential is strong, particularly in regions with consistent wind speeds exceeding 10 m/s, making them suitable for utility-scale wind farms.
Significant hydropower storage capacity presents an opportunity for flexible load balancing and improved integration of variable renewables.
Implications
Strategic investments in renewable energy infrastructure, grid modernization, and energy storage are critical to ensuring long-term grid stability and energy security.
Albania’s abundant solar, wind, and hydropower resources position the country to become a regional energy hub in Southeast Europe, offering opportunities for cross-border energy trade and economic development.
This final projection illustrates electricity demand alongside estimated energy generation from three key renewable sources—hydropower, solar, and wind—for the period 2025 to 2030. Projections are based on current government targets and include analysis of generation trends, efficiency rates, and climatic considerations.
The projection highlights a shortfall between electricity demand and renewable generation during the third and fourth quarters of 2025 and 2026. These gaps emphasize Albania’s current reliance on hydropower and the need to expand solar and wind capacities. By 2027, the integration of these sources begins to fill the seasonal generation gap, supported by enhanced hydropower storage systems that improve grid stability. If demand continues growing rapidly, however, further investments will be needed.
Scenario modeling factored in:
A conservative 3.44% drop in hydropower output by 2030 due to drought effects
A realistic solar efficiency rate of 20% in high-GHI regions such as Durrës and Fier
Wind speeds averaging 10 m/s in regions like Kukës and Karaburun
Grid efficiency improvements simulating 50, 100, and 150 GWh annual reduction in losses
The combined effect of renewable energy expansion, improved grid efficiency, and strategic planning suggests a promising pathway for Albania to meet future electricity needs sustainably—potentially transitioning into a net energy exporter by the end of the decade.