New Law on "Promotion of the use of energy from renewable sources"

On 14 April 2023, the Albanian Parliament adopted the Law no. 24/2023 on "Promotion of the use of energy from renewable sources" (the "Law"). The Law was published in the official gazette no. 64, dated 14 April 2023 and has entered into force on 29 April 2023.

The Law substitutes and repeals the existing Law no. 7/2017 having the same scope. The secondary legislation approved under the previous act will however remain into effect until new secondary legislation is approved on the basis of the Law no. 24/2023.

Below is a summary of the main provisions of the new Law.

The Law, which partially approximated with EU acquis (Directive of 2018/2001 (RED II), aims to promote and incentivize the sustainable producing and the use of energy from renewable sources as part of the national policies on diversification of energy sources and the security of energy supply in the Republic of Albania. 

The Law determines the national objectives for the use of energy from renewable sources and the measures for meeting them. According to the Law, the national objective for the consumption of energy from renewable sources as at 2030 is to reach 54.4% of the overall gross energy consumption.

The state authorities will provide support for the production of energy from renewable sources in one of the following forms:

a) energy purchase agreement;

b) contract for the difference;

c) premium contract.

The above forms of support will be provided to producers of energy from renewable sources through bidding procedures. The Law regulates in detail the criteria and the procedures to be applied with regard to the support measures and incentives, responsibilities related to balancing and flexibility, as well as the rules and the steps for the bidding procedures.

As an exemption from above, the Law provides simplified procedures for “demonstrating projects”, which within the meaning of the Law are projects that demonstrate a new technology for the first time in the EU or Energy Community and representant an important innovation. Demonstrating projects with a capacity of less than 10.8 kw are subject to simplified procedures of connection to the network by addressing the notification of connection to the network to the Distribution System Operator.

The Law presents a new concept of “Self-producers of renewable energy”. Self-producers of renewable energy can be any SME (small and medium enterprises) or household consumer who is eligible to install a total capacity of up to 500 kW for the production for self-consumption, as well as to inject and sell the excess energy produced into the distribution network. For this purpose they have the obligation to install a two-way meter at their own expense that will serve to measure the net balance of the energy.

Furthermore, the Law determines the functions and competences of state authorities as well as of other public and private entities in relation to the rules of organization and operation of the market of the energy from renewable sources.

One of the key actors will be the Renewable Energy Operator (REO), which will play the role of the contracting party with the producers of energy from renewable sources eligible for support in one of the forms provided by the Law. The REO will buy the electricity from the producers of energy from renewable sources and will distribute this energy directly to the organized market.

The REO’s main responsibilities will be maintenance of a public online registry of producers of energy from renewable sources eligible for support, management of the renewable sources support fund which will mainly be used for cover of the costs of support schemes, calculation and systematic updating of the renewable resources support fund, keeping detailed records of all measures of the Support Scheme, etc.

The REO will be guaranteed with access to the transmission and distribution networks of energy based on the criteria and rates provided by the Energy Regulator Entity.

The Law provides that in the event that a reductions of the electricity in the network is necessary, the electricity produced from renewable sources will be limited only after all other reducing sources are exhausted.

The costs of connecting the renewable energy power plants to the network, change of the connection point, change of capacity as well as the equipment for recording of the energy supplied and received are borne by the producer of renewable energy.

The Law provides for the organization of the Renewable energy community as a legal entity, which is entitled to:

• to produce, consume, store, distribute, sell renewable energy and offer aggregation, including power purchase agreements; 
• have access to all appropriate energy markets, directly or through aggregation, in non-discriminatory manner; 
• be supported as a producer with a priority in accordance with the Law.

The renewable energy communities’ members can be:

• any family in need or with low income;  
• any private entity, as long as its membership does not represent its main commercial or professional activity; 
• any household consumer and final consumer.

The Energy Regulator Entity (ERE) is the national competent body to issue the Guarantee of origin for electricity produced from renewable sources in Albania. It will create a system for the issuance, transfer, repayment and revocation/cancellation of guarantees of origin regarding energy produced from renewable energy sources.

The guarantee of origin will be issued at the request of the producer of energy from the renewable sources only once for a net unit quantity of 1 mwh of electricity produced and measured at the point of connection to the transmission or distribution system or closed system of distribution. The guarantee of origin is valid for one year starting from the last day of the production period for which it was issued. Guarantees of origin that have not been canceled, expire 18 months after the production of the power unit. The guarantee of origin is transferable. The ERE shall maintain an electronic register of guarantees of origin and shall publish the data from the registry on its website.

KPMG team remains at your disposal for any inquiries you may have or assistance needed.

Juliana Mateeva
Partner, Legal Advisory Services
Tel: +359 2 9697 600

Arjola Goxhaj
Manager, Legal Advisory Services
Tel: +355 42274 524

Ergisa Hasanbelliu
Senior Associate, Legal Advisory Services
Tel: +355 42274 524