Albania: Green economy pass through the human capital

By Lorenc Gordani, Legal Adviser in Albania Energy Market

The today Albanian energy market, similar to the transformation in many different fields of economy, has taken an in-deep reform that in some way were even difficult to be imagined only some times before. In practise, the country has adopted the same legal framework, integrating the institution and struggling to enforce the rule of law applied to the sector in all the European countries. An effort, first of all to our direct interest, but in same time, as part of integration process with the openness of the energy market in Albania, is giving a contribute to foster the opens of other countries in the South-East Europe.

As know the energy sector, after remove of the major legal obstacles to establishing organised electricity markets, has to adhere to a power exchange or, if economically justified, considering liquidity and economic viability, create an own power exchange, enabling wholesale market trade. As well as establishment of a functioning national balancing market based on above model; eliminate long-term contract in generation, and adopting national action plans for phasing out of regulate price in retail (since January 2016).

How can the above done? With the purpose to keep as much as possible concise, even the issues are complex and need many considerations, a radical game of change is a precondition. Lately, in its report that serve as a map for the Albanian government to achieve the goal of the 2030 development agenda the United Nations agency highlights that three platforms where to be focus: the governance and law, the green economy and investment in human capital.

Maybe due to my personal affinity with academia, I am mostly keen to the idea to start from investing in human capital, to make possible a fully liberalisation at least by 2025 (based to the target post from the new energy strategy). The potential is to our hand, but what we may aspect from the tomorrow when still today our universities do not have at all in their curricula any matter related to regulation of the power sector, market liberalisation and regional integration, sustainable development, efficiency and management of energy, management of renewable investments, etc.

In fact, the matter of the energy market, as interdisciplinary discipline is developing everywhere: in Albania somehow is primary the contribution of regulator with legal background, because within this stage of development, there is a need to lead politics, have investments and create market by laws (or better highly detail decrees). Normally, in developed countries, more space has given to economists, and in the most advanced by engineers, as someway in last is a matter of technology, innovation, electronic platforms, etc. However, the all make fundamental the role and contribute of the universities.

Since the first step towards market integration (or more precisely the market coupling) is seen to be done with Kosovo, it has to be start directly by building a join Energy Council. A body that will help to deal with the main challenges posted, advising the public authorities and helping in creating a regulatory tradition in the field of energy. In public field similar experiences are already present in national level such as the economic council or the investments, but similar experience are seen useful a in a lot of direction even by private initiatives frequently developed in academic level of universities (e.g. Economic Forum of Tirana).

Further, a lot has to be done to enable the public companies. Lastly, the WB has been involved with the reconstruction plan of the energy sector, and the acceleration of the reforms. A consultancy is supporting OSHEE (and of course other KESH and OST), with fully unbundling that need a better determine of the losses. However, the energy market consists of two parts strongly inherent to which other: the wholesale and retail market. The core of issues is that with the first have to do with some (mostly public) companies, but on retail side there are a lot small companies and sensitive consumer. To understand this last challenges, it can be remind that still many developed countries, are continuing to maintain the regulated tariffs (out of 19 from 28 countries).

And for concluding, keeping faith to the promise for staying concise, in the EU’s latest action plan, which has put in the spot the sustainable development and consumer attention, it was prepared a proposal up to 4600 pages! Then the task is rather challenging even only simply to handle all the matter, however, the experience up to here as to serve of something, especially if there will be a particular care on the improve and simplifies of the investment climate, boost the performance of private sector providing support for pre-feasibility study or business plans, combined with technical expertise and advisory to the promote the pilot projects, as well as the increase of access to finances. Nerveless, the all as to be made for the people and of course in last definitely is going to be made by the people.

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