Executive summary
This study provides a comprehensive assessment of the current landscape of Albania’s renewable energy sector—specifically focusing on wind, and solar energy—in the context of the country’s broader energy transition agenda and on natural gas as a transitional resource. The analysis is conducted through the lens of the 2023 EITI Standard, emphasising the importance of transparency, accountability, and sustainable governance in energy sector development. As Albania advances toward decarbonisation, diversification of energy sources, and regional energy integration, the inclusion of renewable and gas sectors (an energy transitional source) into EITI reporting emerges as both a strategic necessity and a governance opportunity.
The study identifies and critically examines the legal, institutional, and operational frameworks regulating the renewable and gas sub-sectors, highlighting a series of important developments. Albania has made notable progress in liberalising its energy markets and establishing enabling conditions for private sector participation, particularly in solar and wind.
In particular, the renewable energy licensing and auction processes, though improved in recent years, must put continuously mandatory publicly accessible and disaggregated data that would enable effective oversight by civil society and the community. In the gas sector, Albania’s emerging role as a transit and consumer country—especially in the context of the Trans Adriatic Pipeline (TAP) and its future interconnections—underscores the need for, infrastructure development, and contract terms.
Furthermore, the growing role of private sector investment, especially through foreign direct investment (FDI), public-private partnerships (PPPs), and green energy auctions, introduces additional complexity in ensuring that transparency and accountability principles are upheld across all projects. To address these issues, the study puts forward a set of concrete recommendations, including:
- Expanding the scope of EITI reporting in Albania to cover solar, wind, and gas infrastructure projects, including licensing, revenues, and contract terms;
- Strengthening inter-institutional coordination and standardising data collection and publication across key energy agencies;
- Revising or updating the legal and regulatory framework to mandate transparency provisions for all energy projects, including in the renewable and gas sectors;
- Integrating project-level disclosures and beneficial ownership data for all licensed operators in renewables and gas into EITI reports;
- Enhancing the capacity of the EITI Multi-Stakeholder Group (MSG) to oversee non-extractive energy sectors and ensure alignment with the 2023 EITI Standard’s expectations on energy transition reporting.
The 2025 Energy Transition Index (ETI) report published by the World Economic Forum ranked Albania first in the world in terms of energy sustainability, surpassing countries with advanced infrastructure such as Sweden, Switzerland, and France. This ranking is based on the ETI's three main pillars: energy security, equity, and environmental sustainability. In the sustainability dimension, Albania leads globally due to its reliance on renewable resources with minimal environmental impact.
Renewable sources account for over 97% of Albania’s total electricity generation, with one of the highest shares of hydropower per capita in the Western Balkans. Recent investments in solar and wind energy have further strengthened this position, while interest in battery storage systems and gas infrastructure interconnection is increasing, aiming at broader diversification.
Additionally, Albania has implemented effective support policies for vulnerable social groups, offering direct subsidies to low-income households and mitigating the impact of global energy price increases. These efforts have significantly improved the country's equity score, with OECD recognising Albania as the regional leader in energy support for disadvantaged groups.
However, the energy security dimension remains the most fragile. Albania’s heavy dependence on hydropower exposes the energy system to seasonal variability, including droughts and climatic shocks. The WEF report notes that, globally, energy security improvements have been minimal (+0.4%), and Albania reflects this trend due to its limited diversification, lack of strategic reserves, and technological inflexibility.
Albania lacks advanced energy storage infrastructure, LNG terminals, or functional alternative sources like gas-fired power plants, and its electric grid has limitations in handling consumption peaks. Consequently, investments are needed in solar and wind capacities, battery storage, regional grid interconnection, and participation in joint energy security mechanisms with neighbouring and EU countries.
According to WEF, Albania has achieved the fastest annual improvement in the sustainability pillar (+1.2% per year) over the last decade, alongside substantial equity progress through targeted subsidies (+2.2%). However, maintaining this top position requires a more assertive strategy in reinforcing energy security and institutional readiness to face energy crises.
OECD recognises Albania as a regional benchmark in sustainability, but notes that convergence with EU energy standards requires deeper reforms in regulation, market liberalisation, and strategic investment planning. Outstanding performance in one dimension is commendable, yet a successful and resilient energy transition must balance all three: security, equity, and sustainability.
In conclusion, Albania holds a globally unique position with a nearly fully renewable, clean, and socially inclusive energy system. Nevertheless, without strengthening technical security, building energy reserves, and achieving deeper integration with regional and European energy networks, the system remains exposed. A successful energy transition demands not only clean resources, but also a robust, protected, and interconnected system.
The energy transition represents a turning point for Albania, requiring robust transparency safeguards to ensure that investments are sustainable, fair, and aligned with national development goals. By integrating the renewable and gas sectors into its EITI implementation, Albania can position itself as a regional leader in transparent energy governance and reinforce public trust in its transition toward a cleaner and more resilient energy future.
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