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Phone

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Energy use directly impacts on the environment through the extraction and consumption of natural resources for fuel and air emissions and climate changes resulting from the combustion of fossil fuels. The environmental degradation resulting from climate change is multi-faceted. One simple way of addressing the complex issues related to climate change is to increase energy efficiency and the use of renewable energy, thereby reducing greenhouse gas emissions.

Energy efficiency is a top policy priority. Albania is doing progresses in developing its long-term energy policies and strategies for energy security and efficiency and in creating the appropriate institutions to implement sustainable reforms of energy markets. But, it still needs to develop robust energy strategies and reliable data systems in order to reach market fundamentals.

Albanian Government policies to improve energy efficiency and to diversify the energy mix will remarkably contribute to energy security.

National Energy Strategy ( updated ), 2008-2020 is based on the development of

two scenarios, Passive and Active one.

The last one takes into consideration energy efficiency measurements in

supply and demand side.

For passive scenario the total energy demand up to 2020 will be at level of

4,167 Ktoe.

For Active scenario it will be at 3,061.6 Ktoe.

In Active scenario, specifically energy demand in service sectors projected to

be in year 2020 -540.1 Ktoe compared with Passive scenario-735 Ktoe.

In 2007 “ The total primary Energy supply reached the rate of 2,130 ktoe, from which:

�� the hydrocarbons the hydrocarbons contributed by 1368 Ktoe, or about 64.2%;

�� the electricity the electricity by 501 Ktoe, or about 23.5 %, 8firewood by 215 Ktoe, or about 10 %;

� and the other part the other part consists of the other resources such as coal, natural gas and solar energy;

� In 2007, the energy consumption from residential sector was increased by 12,5 % and the energy intensity was decreased by 2,7%, in comparison with the year 2005.

� Despite the low level of energy consumption per capita, Albania's energy intensity remains high.

� Inefficient use of energy and high use of electricity for heating, in particular, generate high losses.

Industry

15%

Transport

42%

Residential

25%

Service

6%

Other

12%

Final Energy Consumption by Sectors [ktoe]0 .0

10 0 .0

2 0 0 .0

3 0 0 .0

4 0 0 .0

50 0 .0

6 0 0 .0

70 0 .0

8 0 0 .0

19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

RESI D ENC I AL

SERVI C E

T RA NS PORT

I ND US TR Y

A GR I CU LTU RA L

The existing legal framework on energy efficiency is as follows:

� The Energy Efficiency Law of 2005, is the main legal tool to enhance efficient

use and reduce losses in the energy sector. This Law is under reviewing

process for its complete harmonization with the EU directives on Energy

Efficiency.

The new Law states the obligation to prepare a National Energy Efficiency

Programme (NEEAP) 2009-2016. the NEEAP is on the process of preparation.

� Law “On establishing of facilitating conditions for new sources construction of

electricity generation“.

� Law “On Power sector ”

� Law “On regulation of electricity sector”, amended

� Law “On foreign investments”

� Lack of energy efficiency law;

� Lack of secondary legislation;

� Lack of financing instrument for energy efficiency;

� High commercial electricity losses;

� Low electricity prices;

� Unavailability of Public funds for energy efficiency projects;

� Lack of experiences of the banks to finance energy efficiency investments

or/and high interest rates applied by local banks to mid- or long-term loans

and severe requests for collaterals;

� Energy services companies inexistent; (ESCO-s);

� Administrative barriers;

� Lack of the implementation of the legal framework when it exists.

� USAID Different Small Scale pilot projects;

� UNDP (First National Communication);

� World Bank (CDM Carbon Financing);

� KFW Project on RES and Energy efficiency promotion;

� Albanian Italian Cooperation on CDM Projects;

� Under implementation the project “On promotion on renewable and energy

efficiency” financed by German Government, through KfW Bank;

� Under implementation the project on “Financing Energy Efficiency Investments for

Climate Change Mitigation” supported by United Nations Economic Commission for Europe. The goal of the Project on Financing Energy Efficiency Investments for

Climate Change Mitigation is to promote market formation so that self-sustaining

energy efficiency and renewable energy projects can be identified, developed,

financed and implemented locally in participating countries.

� Under implementation the program on “Sustainable development and greenhouse

gases emissions reduction”, a grant from the Italian Ministry for Environment, Land

and Sea (IMELS)

Climate change is expected to have significant impacts on the Albanian energy sector. The predicted raised temperatures, changes in the amount of precipitation, variation in humidity, wind patterns and the number of sunny days per year could affect both consumption and production of energy. Climate change is likely to affect the major end uses such as space heating, space cooling, water heating and refrigeration. It is expected an increased energy demand for air conditioning in residential and service sector

In Albania, hydropower currently provides about 90% of domestic electricity. As climate change mitigation targets and legislation are tightened up, and with other countries struggling to reduce their greenhouse gas emissions, Albania's „green‟production capability is an increasingly important national and regional asset. However, such a high dependence on hydropower also brings challenges.

Adapting to climate variability and change will become increasingly important for the Albanian energy sector.

Acclimatise, WorleyParsons and World Bank, during year 2009, has carry out astudy, that provides high-level assessments of climate risks and adaptation options for Albania‟s energy sector, drawing on existing research and literature.

The study estimates that a reduction in runoff of 20% by 2050 driven by climate change could lead to 15% less electricity generation from Albania's large hydropower plants (LHPPs) and 20% less ii from small hydropower plants (SHPPs).

At the same time, increases in extreme precipitation events could lead to increased costs for maintaining dam security.

Other energy assets are not immune from climate impacts. Rising sea levels and increased rates of coastal erosion will threaten Albania's new coastal thermal power plants (TPP).

Rising air temperatures are also estimated to reduce the efficiency of TPP by 1% by 2050. If river-water cooled TPP were developed in future, these would be affected by changes in river flows and higher river temperatures, further reducing their efficiency.

Efficiency losses of 1% by 2050 are also estimated for transmission and distribution networks. Owing to uncertainties in current and future wind speeds, estimates of changes in wind power generation can not be made. Solar energy production in Albania may, however, benefit from projected decreases in cloudiness – it is estimated that output from solar power could increase by 5% by 2050.

The study identifies key direct risks to energy supply and demand and options for adaptation, to establish where subsequent more in-depth analyses should be focused.

� Integration in the European Union

Integration in the European Union is a major driver for policy reforms aiming at the

establishment of market-based energy systems. The implementation of the acquis communautaire process with the related sets of guidelines and regulations strongly is

supporting the creation of reliable regulatory framework as well as favorable conditions for energy investment projects.

� Energy Community

The Energy Community may adopt measures to foster development in the areas of renewable energy sources and energy efficiency, taking account of their advantages for

security of supply, environment protection, social cohesion and regional development.

Albania has ratified the Energy Community from 2006, aiming the achievements of all necessity steps in order to fulfill all obligations related fro Energy Community

commitment.

� Energy Charter Treaty

The Energy Charter Treaty as an international agreement is a very useful tool and

guideline through its Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA). Albania has ratified and is participating on area of the promotion of energy

efficiency and attempts to minimize the environmental impact.

The Kyoto Protocol is an international agreement linked to the United Nations

Framework Convention on Climate Change. 38 Developed Countries and

Economies in Transition agreed in 1997 to:

� Reduce GHG emissions by 5.2% below 1990 in the commitment period 2008 -2012

� USA did not join KP

� Kyoto Protocol came into force in February 2005 with Russia ratification.

� Reductions: Total demand created for GHG Reductions: ~5000 Mt CO2

� Marrakech Accords: agreed in Nov 2001 set rules of implementation rules of implementation

Acknowledging the significance of the climate change problem and the necessity

to take effective steps for its mitigation, the Government of Albania joined the UNFCCC

on January 1995 as a Non-Annex 1 Party to the UNFCCC, with no emission reduction

targets.

Albania joined the Kyoto Protocol on 16 December, 2004.