Albania’s Hydropower Dilemma: Environmental Impact and Energy Vulnerabilities

Among all  Western Balkan countries, Albania has the lowest CO2 emissions into the atmosphere, accounting for only 0.01% of global emissions. According to the International Energy Agency, renewable energy sources currently account for around 44% of the energy mix, mostly since 99.6% of electricity is generated from hydropower, which makes Albania one of the few countries in the world whose entire electricity production is dependent on hydropower plants. However, Albania’s dependence on a single renewable source leaves the country’s energy system prone to various vulnerabilities.

Hydropower, while considered a green energy source, shares the inherent instability characteristic of other renewables due to its reliance on weather patterns and changing climates. It was estimated that climate change will plummet the capacity of Albanian hydroelectric power plants by 15-20% by 2050. Moreover, summer droughts are becoming more and more severe, which ultimately dries up hydroelectric plants and local power utilities are left with no other choice than to turn to alternative sources, including fossil fuels. For instance, the 2019  drought significantly undermined the stability of the energy supply and contributed to the increase in import reliance, accounting for almost 30% of the entire value of consumption, which resulted in one of the years with the biggest import values during the recent decade. Additionally, heavy reliance on imports makes Albania particularly vulnerable to price shocks in the regional wholesale electricity markets.

The decades-long overreliance on hydropower has led to significant environmental and social problems, mainly due to hydroelectric construction and operation. Albania has at least 23 operational hydropower plants with a generation capacity above 10MW,  along with numerous smaller ones. Some of them pose a threat to the environment, as is the case of the Ternove hydropower plant, which caused heavy erosion and deforestation in the area, and others like Rapuni 1 & 2 plants have citizens reporting a lack of water due to plants’ extensive consumption.

The problems are further accentuated by announcements of new hydropower capacities, which fuel the overall public distrust. For example, the highly controversial Skavica dam, announced in 2021, is extremely damaging as it risks affecting up to 41 villages and 2,500 people. Not to mention, the project suffers from a lack of transparency, ranging from ambiguities in a tender to missing environmental impact assessment. As a consequence, the Albanian Constitutional Court is currently scrutinising the 210MW hydropower project, which may result in its termination.

Additionally, Albania faces significant electricity losses, with 21% of the total electricity produced lost in the first months of 2023. That is mainly caused by the decades-old and ramshackle energy network infrastructure, which is vulnerable to illegal interventions. And even though Albania is now working with its neighbours to prevent electricity loss by developing a regional electricity market, it is still too early to conclude, as the first delivery day was in February 2024, and only between Albania and Kosovo. Furthermore, the Albanian power industry does not have a complex energy storage system, meaning that significant amounts of electricity produced during low-demand periods or so-called off-peak times cannot be stored for later use. As a result, Tirana needs to make up for the deficit via imports of fossil fuel energy from neighbouring countries, especially during the winter. This indeed undermines the country’s energy security and also creates doubts about its commitment to achieving a net-zero future.