Albania has opened its electricity market to battery storage and aggregation, establishing regulatory groundwork for a more flexible system. The move comes as the hydro-dominated power sector adds increasing volumes of solar generation. Electricity Sector Law 59/2026 recognises storage and aggregation as regulated electricity-market activities.
Legal framework for storage and active customers
The law introduces the concept of active customers able to generate, consume, store and sell electricity. It also sets the basis for participation by energy-storage operators within the regulated market framework. The energy regulator ERE advanced implementation on 19 August by approving rules on notification and registration of energy-storage operators.
The regulatory change is expected to be commercially relevant given the structure of Albania’s power system. Hydropower remains a dominant source, resulting in a low-carbon generation mix while linking domestic supply and trading positions to rainfall and reservoir levels. Strong hydrology can support export volumes, while dry conditions can quickly increase import requirements.
Managing solar variability with batteries
Solar expansion adds diversification but also introduces additional variability into the system. Photovoltaic generation is concentrated during daylight hours and can weaken sharply into the evening. Storage is positioned as a tool to manage both solar output and hydropower resources more efficiently.
Batteries can absorb solar output during low-price periods and discharge later, while reservoir hydro can be conserved for longer-duration or higher-value needs. This approach can reduce reliance on hydropower for short intraday balancing. The framework also recognises aggregation as a regulated activity within the market structure.
Aggregation portfolios and cross-border market context
Aggregation creates the potential for portfolios combining batteries, small renewable plants and flexible consumers to participate collectively in future balancing or wholesale markets. Industrial and commercial users could similarly combine behind-the-meter solar and storage to reduce peak demand and potentially trade excess electricity. ALPEX participation is part of the regional context, with Albania interconnected with Montenegro, Kosovo and Greece.
Albania participates in the ALPEX market structure with Kosovo, where greater domestic flexibility could help manage exports and imports around hydrological conditions. Rather than selling large volumes of surplus electricity during weak-price periods and buying back power during scarcity, storage could retain more value within the system. Detailed implementing rules will influence how quickly investment activity develops.
Project economics will depend on grid charges, balancing-market access, connection procedures, and how charging and discharging are treated under the new arrangements. The regulatory foundation is now in place as Albania’s power-market transition moves beyond questions focused only on adding solar capacity. The next stage centres on how renewable electricity can be stored, aggregated and traded around Albania’s volatile hydro balance.
