Page 82 - SE Outlook Regions 2023

Economists see potential for the development of other sectors. The
World Bank, for example, pointed in 2022 to the potential to grow the
auto parts sector, which lags behind those in fellow Western Balkans
countries such as North Macedonia and Serbia. “Albania may take
advantage of the changes in the vehicle production, processes and
reshoring of value chain related to COVID-19,” the World Bank said.

3.1.4 Energy & power

Albania has one of the greenest power sectors in Europe, as it
produces almost all its electricity from hydropower.

This became problematic in 2022 as poor weather conditions meant the
country was unable to generate sufficient electricity domestically and
was forced to make imports at a time of very high prices on
international markets. This prompted officials to urge Albanians to save
energy, and the government has leased two power generation ships
that will produce up to 15% of Albania’s electricity demand.

Only in the autumn, when the country experienced torrential rain, did
the situation in the sector start to improve.

Longer term, to diversify its energy sector, Albania has launched
investments into renewables. Among the major projects underway are
French Voltalia’s construction of the biggest photovoltaic (PV) park in
the Western Balkans.

At the same time Albania, which is one of the countries on the route of
the Trans-Adriatic Pipeline (TAP), is developing its gas sector. At
present the country currently consumes barely any gas, but it envisages
using 2.4bn cubic metres per year of gas by the end of the decade.
This will require substantial investment in the necessary infrastructure.

In October, Albanian natural gas transmission system operator Albgaz
signed a strategic co-operation agreement with Spain’s Enagas. The
agreement paves the way for a potential investment by the Spanish
company in Albgaz.

Previously, a deal was struck with ExxonMobil to build a liquefaction
plant to provide the Vlora power station with gas, once it has been
renovated. Albania has also obtained a floating regasification and
storage unit (FSRU) for the Vlora LNG terminal.

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