New tender design for solar with battery requirements
Albania is preparing a new competitive solar power auction that is expected to require battery energy storage, reflecting a shift toward renewable projects able to manage electricity production and delivery more flexibly. The Infrastructure and Energy Ministry is developing the tender in cooperation with the European Bank for Reconstruction and Development (EBRD). The auction could launch before the end of 2026 or in early 2027.
The planned approach marks a departure from earlier solar procurement models that focused primarily on installing additional generation capacity. By integrating battery storage into project requirements, Albania aims to increase the commercial and operational value of solar electricity. It also seeks to reduce exposure to fluctuations in renewable output.
June 2026 legislation enables hybrid renewable-storage framework
The proposed auction follows electricity sector legislation that entered into force in June 2026. The rules establish a clearer framework for combining storage facilities with renewable generation assets. They also provide developers greater flexibility to manage electricity production.
Under the legislation, developers can respond to changing wholesale-market conditions as part of their project operation. This regulatory structure supports the use of storage alongside solar generation within the auction process.
Solar growth and role of storage amid hydropower variability
Albania’s solar sector has expanded rapidly, with installed capacity exceeding 600 MW by the end of 2025. Solar generation accounted for a record 11% of national electricity production during the year. The expansion is notable in a power system historically dependent on hydropower.
Hydropower output can fluctuate substantially with rainfall and reservoir levels, affecting overall generation patterns. Battery storage could allow solar developers to shift part of their output from daytime periods of abundant generation toward higher-value trading hours. This could improve project revenues while reducing exposure to low-price periods.
Market access via ALPEX and factors shaping project economics
The commercial viability of hybrid solar-storage projects will depend on auction design and specific storage requirements. It will also be influenced by grid connection costs and financing conditions, along with the ability to earn revenues from electricity trading and system services. The Albanian Power Exchange, ALPEX, is expected to play an increasingly important role in providing market access for renewable generators.
ALPEX allows producers to sell electricity into the organised day-ahead market, creating an additional commercial option beyond conventional long-term supply arrangements. For banks and investors, combining solar production with battery storage requires more complex financial assessments than standalone renewables. Project revenues depend not only on annual electricity output but also on hourly price differences, battery operating strategies, and contractual exposure to balancing costs.
Link to electricity-market liberalisation and export ambition
The government positions renewable expansion, storage development, and electricity-market liberalisation as central elements of its ambition to turn Albania into a net electricity exporter by 2030. The next auction is therefore expected to test whether Albania can move from expanding renewable capacity toward projects offering greater flexibility and more reliable commercial delivery.
