Albania’s Day-Ahead Power Market Is Operational, but Still Not Mature Enough for CfD Support

Albania’s electricity market is making measurable progress, but it is not yet ready to serve as the reference price for modern renewable support mechanisms. That is the central conclusion of ERE’s first assessment of the ALPEX day-ahead market (DAM), which evaluates whether the market is sufficiently liquid and competitive to underpin the future conversion of renewable PPAs into contracts for difference (CfDs). Under Albania’s renewable energy law, ERE is required to carry out such periodic assessments, and it approved the market-readiness methodology in November 2025.

The report’s logic is straightforward: a day-ahead market can only act as a reliable CfD benchmark if it produces a frequent, stable, and credible price signal. To test that, ERE examined price availability, churn, bid-ask spreads, market depth, competition, and the effect of Albania’s coupling with Kosovo. It also benchmarked ALPEX against selected EU markets at the stage when those countries first introduced CfDs, choosing Poland, Hungary, and Croatia as comparators. This approach places Albania in a relevant policy context rather than comparing it with the most mature European exchanges.

The assessment does contain important signs of institutional progress. ALPEX generated a market-clearing price in every hour of the 12-month review period, from 1 November 2024 to 31 October 2025, which satisfies ERE’s criterion for continuous price availability over at least 10 months. The market also appears to be functioning as a shared Albanian-Kosovar trading platform, with coupled prices in more than 99% of hours. In policy terms, that is a meaningful achievement: the market is operational, regional, and capable of producing a continuous price signal.

Yet the core liquidity indicators show that ALPEX remains materially underdeveloped relative to the comparison markets. The churn factor is only 0.102, below HUPX, CROPEX, and TGE, indicating that the ratio of traded volume to total consumption is still weak. The bid-ask spread is also wide: the median is 9.7% of the average market-clearing price, the mean is 17.4%, and the 75th percentile reaches 19.2%. By contrast, the report shows that HUPX had a median spread of just 1.2% and a mean of 3.7%. These figures point to a market that can clear prices, but still struggles to do so efficiently and consistently.

Market depth provides the same message in a different form. ERE finds that in 25% of hours, ALPEX would not have been able to absorb more than about 146 MW of new zero-marginal-cost supply while still maintaining a positive clearing price. That is a critical limitation for a power system that is expected to integrate more renewable generation, especially as photovoltaic capacity continues to expand. In practical terms, the report suggests that the market may face stress at times of low demand or high renewable output, when additional capacity needs a deeper and more resilient trading environment.

Competition is stronger than the liquidity indicators alone might suggest. ERE reports 32 sellers and 33 buyers, with an HHI of 853 on the sell side and 1,220 on the buy side. It interprets this as a competitive sell-side structure and a moderately concentrated buy side. That is an important distinction: the market has participants, but participation has not yet translated into the degree of depth and turnover required for a robust reference price.

The broader policy conclusion is therefore cautious but clear. ALPEX is moving in the right direction, but it is not yet sufficiently liquid to support the transition to CfD-based renewable support. ERE explicitly concludes that the ALPEX DAM is not yet ready to be used as the reference price for support contracts in Albania. At the same time, the report treats this not as a failure, but as a transitional stage: the market has a continuous price signal, a reasonable participant base, and a functioning regional coupling, which are all necessary foundations for future readiness. ERE is expected to continue periodic assessments as the market deepens and matures.

In strategic terms, the report captures Albania’s power-market transition at an important midpoint. The system is no longer at the stage of market creation, but it has not yet reached the level of liquidity, depth, and price stability that would allow it to anchor modern renewable support instruments. For policymakers, the message is that market coupling and institutional setup are advancing faster than commercial liquidity. For investors, especially in renewables, the implication is equally clear: Albania’s market architecture is improving, but the price environment is still not mature enough to be treated as a fully reliable CfD benchmark.

February 17, 2026

by AEA in News

Albania’s Solar Gold Rush: Who Profits, Who Pays?

As Albania races to become a net exporter of electricity, dozens of vast solar parks have sprouted almost overnight on fertile farmland and pastures, igniting fierce resistance from local communities. In Fier’s village of Boçovë, a normally quiet farming district near the Seman delta, families woke one day to find heavy machinery digging up fields they had tended for generations. “It turned out a photovoltaic park was being built here, and our lands aren’t ours anymore,” complained Nikoll Ndoi, a local schoolteacher. Ndoi and his neighbours say they gained these plots in the early 1990s under Albania’s land-reform law (Law 7501), but were never issued legal titles and now discover the state has quietly expropriated them for solar panels. More than a dozen families in Boçovë are locked in a fight to reclaim their soil from a new small company, “Brevi Construction”, where it is mentioned in the media that it is affiliated with the family of Pëllumb Salillari. Such clashes are multiplying nationwide as the government greenlights hundreds of megawatts of solar capacity, prompting farmers and herders to denounce an “energy revolution” that is trampling their rights and livelihoods.

Residents of the Levan Administrative Unit protested again in the village of Boçova, after work began on their agricultural lands to install photovoltaic panels by the company “Brevi Construction”, with administrator Afërdita Salillari.

The Albanian government, led by Prime Minister Edi Rama, has made a dramatic pivot from its traditional hydropower surplus to a sun‑driven future. Since 2018, the Council of Ministers approved dozens of solar park projects and the energy regulator (ERE) licensed over 70 private solar companies. The planned PVs are a total of nearly 1,000 MW, about 30% of Albania’s installed capacity and none of it is guaranteed for local use. Instead, most is slated for export to Italy and beyond. Ex-director of Energy Policies at Ministry of Infrastructure and Energy Gjergj Simaku warns this is a “paradox”: Albania could end up exporting clean power while continuing to import fossil‑fuel electricity during winter. Simaku notes that 1 GW projects have no obligation to sell domestically, leaving local grids and consumers sidelined. Notably, Simaku does not address his own role during his long tenure at the Ministry of Infrastructure and Energy, where he was directly involved in shaping and implementing national energy policies. The governance gaps and regulatory weaknesses he now criticizes were also evident during the wave of small hydropower plant licensing over the past decade—a period marked by widespread concessions, limited oversight, and significant social and environmental consequences for local communities. The current tensions surrounding large-scale solar development bear striking similarities to that earlier expansion, raising questions about institutional continuity and accountability in Albania’s energy policymaking.

Municipal Public Assets Leased by Purpose of Use 2015 – 2024 (in hectares)

This policy u‑turn was codified in 2023 when the government amended the renewables law to allow solar farms on any land even vital grazing areas not just barren terrain. Green activists point out that at least half of Albania’s solar license rush is on former public pastures and forests. A recent survey by the All Green Center found many lease auctions were rushed, with no real competition or community input. “Support for green energy must not come at the expense of natural capital,” says environmentalist Ola Mitre. Birding expert Taulant Bino adds that multiple solar projects have been approved piecemeal, ignoring their cumulative impact on biodiversity. In fertile districts like Fier, dozens of solar parks now ring protected river deltas and migratory corridors. Normally one of Europe’s greenest electricity producers (90% hydro), Albania’s renewable expansion is outpacing environmental safeguards.

Locals report no meaningful consultations. In Boçovë, villagers say a developer quietly re‑zoned their family farms (marked on cadastral maps as “arable” or “forest”) into “unused state land” just as construction began. When the community complained to the Cadastre and Agriculture Ministry, nothing was fixed. In Darzezë (nearby Boçovë), elders who believed promised benefits (new roads, lighting) are now “disappointed,” saying “nothing was done, and they even took our water”. The local mayor’s office in Fier readily absolved itself of responsibility: “These projects aren’t licensed by local government,” Fier’s municipal response notes, adding only that it receives property taxes and nothing else. In effect, powerless villagers have found themselves squeezed: the state offers no legal recourse when it simply rents out “public” pastures to private developers.

A protest by residents of the village of Imshte in the Bubullimë unit in Lushnje.

Across the southwest, similar scenes played out. Last month in Imshtë (Lushnjë), about 70 farmers blocked the road to their police station, demanding authorities halt a planned solar park on 100 hectares they have grazed and farmed for 30 years. They accuse a local businessman, Elton Çekrezi, of quietly buying up the plot once officially designated as non‑transferable state land and forming a shell company SunXpower to install PV panels. MP Erion Braçe, who supports the Imshtë community, blasted the episode on social media as a “robbery of public land” by a clandestine “new agha,” warning that his supporters had been threatened during clashes with men bearing weapons. (Çekrezi’s family insists the land was legally bought at auction from former private owners, and they hold cadaster documents dating back to 1945 and 1998.) In Levan (Fier), villagers of Boçovë protested similarly when the company Bervi Construction began clearing fields they had cultivated for “almost 30 years”. Fourteen families, granted plots under the 1990s land law, but their claims were ignored, and now official records abruptly list the land under Brevi’s name. Farmers like Sandër Mujo have even petitioned prosecutors and the anti‑corruption SPAK agency, warning they will resort to self-vendication if the state does not intervene.

In August 2025, around 40 sheep farmers in Çërravë (Pogradec) held a rally after the local council moved to lease their one communal pasture (35.5 ha) to a solar investor. They decried the measure as a “direct violation of our livelihood” and threatened escalating protests if it proceeded. Independent councillor Arbër Male warned that the vote was a foregone conclusion with the beneficiary company “pre‑selected” by insiders. Such frustrations highlight a growing fear: that the clean‑energy drive is being hijacked by politically connected interests at the expense of ordinary Albanians.

A protest in the village of Çërrava, in the municipality of Pogradec

Critics say the evidence of cronyism is hard to dismiss. The Boçovë solar park was nominally awarded to “Albania Solar Power” (a tiny firm with €100,000 capital) owned by businessman Engjëll Agalliu yet locals see it as Pëllumb Salillari’s project in disguise. Likewise, in Imshtë a construction firm once run by Salillari is tied to Çekrezi’s land deal. Journalist investigations have exposed how clusters of permits went to companies tied to a few elite families, often without competitive bidding. (For example, four solar firms controlled by Armand Lilo’s relatives won megawatt‑scale licenses after a brief ministerial review.) The torrent of approvals has largely skipped formal auctions: as energy expert Simaku notes, “auctions have been forgotten; now licenses are given only on the free market, sold to us as if for domestic use but it’s not true”. NGOs also complain that municipalities have merely rubber‑stamped solar leases, lacking clear strategic planning on where solar parks are appropriate. All Green Center warns that so far, zero hectares of new PV forest have a strategic environmental assessment or master plan to guide them.

A protest in the village of Çërrava, in the municipality of Pogradec

Defenders of the solar boom argue Albania urgently needs a new generation after recent blackouts. The government’s National Energy Plan targets 54.4% renewables by 2030, so big solar projects are deemed necessary for “energy sovereignty”. Prime Minister Rama’s infrastructure ministry underscores that thousands of hectares of mostly unproductive land are available for lease; the projects will create green jobs and revenues. Indeed, Albania’s solar push aligns with EU climate goals and avoids new dams (and displacements) for hydropower. Statisticians note that in the past 10 years Albanian municipalities have leased about 6,350 hectares of public land for all purposes, with over a third (2,325 ha) of that just in 2024 mostly for solar parks. In total some 3,750 ha of state land are now contracted for renewable energy projects. Energy Minister Belinda Balluku, who is under investigation by SPAK, insists each plant needed both a Council of Ministers decision and technical approvals and that “everything is lawful, with environmental studies in place,” though she has not publicly addressed the growing protests.

Photovoltaic power plant in Kolonjë, residents in protest

Nevertheless, the ethical question remains stark. Who really benefits from this boom? Many locals answer: not them. Herders point out that solar panels are theoretically compatible with grazing (the technology allows it), yet companies invariably fence off and occupy the land outright. In Kolonjë, villagers say the developer (Turkish firm Fortis Energy & Construction) even redrew cadastral boundaries to claim around 400 hectares of steep pasture and riverbed (“zall”) that herders need for winter grazing. “If they put up panels, our village will have to leave,” one farmer warned, noting the man behind the project quietly acquired neighbouring plots over decades. Such tensions raise hard choices about property rights and the state’s role in declaring some lands sacrosanct for community use or not.

Protest against PV installation by local communities

For now, many communities are calling for moratoria. Simaku and other analysts urge a strategic pause: map out priority corridors for solar (avoiding protected zones), require genuine public auctions and participatory planning, and bind new plants to domestic needs. Environmentalists warn that Albania’s decades‑old tradition of hydropower should not be cynically traded for a different form of energy dependence. “We risk exporting renewable energy and importing coal,” Simaku says. If that happens, the country may have allowed a green transition to line the pockets of the connected few rather than serve its people’s interests.

In the heated debate over Albania’s clean‑energy path, one thing is clear: expansion of renewables cannot be at the unchecked expense of farming communities. Without transparent governance and respect for local livelihoods, each new solar panel risks deepening rural distrust. Some farmers now speak of taking their case all the way to the European courts. Whether Albania’s solar revolution will shine on as a model of sustainability or become a catalyst for social unrest may hinge on whose voices are heeded in the fields, the villagers who till the earth, or the energy “czars” behind the grid.