The Strategic Importance of Albanian Offshore Wind Projects and the Otranto HVDC Grid Interconnection with Italy.

Current Status of Albania’s Electricity Generation

Albania’s electricity generation mix is predominantly composed of hydropower and imports. However, significant progress has been made in diversifying energy sources over the past four years, with the country investing in photovoltaic (PV) solar power plants. Currently, these solar installations contribute at least 300 MW to Albania’s power generation capacity.

?Despite this progress, wind energy development remains underexplored in Albania. No wind projects are currently under construction, with only onshore wind projects being in the planning stages. To address this gap, the Ministry of Infrastructure and Energy initiated a competitive bidding process for wind electricity generators with capacities ranging from 10 MW to 75 MW. This initiative aimed to identify projects with a combined capacity of 150 MW, supported through various incentive measures.

?As of June 2023, the first phase of contracts was successfully awarded, resulting in three bidders securing projects with a total installed capacity of 222.5 MW by July 2023. Despite these advancements, Albania’s National Energy and Climate Plan (NECP) for 2025-2030 does not explicitly reference offshore wind projects or allocate specific resources for wind energy beyond the 150 MW target capacity achieved in 2023.

?The Potential for Offshore Wind Development

Albania has significant untapped potential for offshore wind energy development. Harnessing this resource could substantially enhance the country's renewable energy portfolio and reduce its reliance on imports. However, developing offshore wind projects requires substantial support measures to mitigate financial risks, attract private sector investment, and facilitate implementation. Comprehensive government-backed policies and incentives are crucial for enabling offshore wind to play a pivotal role in Albania’s energy future.

?Otranto HVDC Grid Integration with Italy

The integration of Albania’s electricity grid with Italy through the planned Otranto HVDC interconnection is a strategically significant endeavor. The project involves the construction of 2x600 MW, 500 kV DC undersea cables, which will enhance cross-border electricity exchange. However, to fully realize the benefits of this integration, Albania’s existing electricity grid requires extensive upgrades and expansion to support both current and future renewable energy projects.

?In addition to the Otranto interconnection, further southward integration with Greece via a 2x400 kV HV transmission line is essential. Such an expansion would leverage Greece’s burgeoning renewable energy capacity, enabling greater electricity exchange with Italy and other Western Balkan countries.

?Strategic Benefits of Regional Grid Integration

The two-way power exchange enabled by these interconnections will diversify energy supply, enhance grid reliability and efficiency, and promote environmental sustainability. This increased connectivity will bolster the resilience of electricity grids across the Balkan region and Italy. Moreover, it will optimize the utilization of renewable energy resources available in both regions.

?By connecting to the electricity grids of Albania, Greece, Serbia, Kosovo, Montenegro, Bulgaria, and Romania, as well as Italy and the broader European grid, Albania has the potential to serve as a strategic electricity exchange hub. This integration will facilitate energy trade between Eastern and Western nations, driving economic growth and fostering regional energy cooperation.

?The development of offshore wind energy and the implementation of the Otranto HVDC interconnection are transformative opportunities for Albania’s energy sector. By embracing these projects and addressing the associated challenges through supportive policies and strategic grid investments, Albania can position itself as a renewable energy leader in the Balkan region, contributing to a more sustainable and interconnected European energy market.

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