Albania, Kosovo to Delay Power Market Liberalisation

Albania has indefinitely postponed the tender process to set up the country’s long-delayed power exchange due to the Covid-19 outbreak, while Kosovo is now expected to form a common power block with Albania by June the earliest, two months later than initially announced.

Albania was due to receive bids until 27 April for the establishment of a power exchange operator as part of a tender launched last month. But the tender has been delayed indefinitely because of the Covid-19 pandemic, the country’s energy ministry has said.

The Albanian government last May approved plans to launch an energy exchange in July this year.

The first phase of the exchange includes the establishment of a day-ahead market. Liquidity will be supported on the platform as state-owned generator Kesh shifts on to the exchange surplus volumes that are left over from supplying the regulated market, estimated by Albanian grid operator OST at 250GWh in the first year. Kesh has previously bought or sold its volume surplus or deficit through tenders.

And Kosovar grid operator Kostt is no longer expected to act as an independent grid operator by the end of this month, as previously announced.

Kostt last December signed an agreement with OST for the establishment of the Kosovo-Albanian control block (AK Block). The agreement, signed with the knowledge of European transmission system operators’ association Entso-E, is a prerequisite for the independent operation of Kostt.

But Kostt postponed the tender for contracting a manual Frequency Restoration Reserve (mFRR) provider until 30 April and could further delay the process, market participants said. Kostt cannot act as an independent grid operator until an mFRR operator is contracted.

And OST already held the tender for cross-border capacity at the Albania-Kosovo interconnector for 1-15 May delivery. Flows between both countries at present are managed by OST and its Serbian counterpart, EMS, as the latter has been unable to form an agreement with Kostt.

EMS announced a tender for the Albania-Kosovo power link at the start of this month but did not offer any capacity on the border for May, according to the tender document.

The dispute between the grid operators has meant that a 400kV interconnector built between Kosovo and Albania four years ago has never started operation because of disagreement over how cross-border auctions and congestion revenues will be managed. A number of institutions in Europe have pushed for a resolution, as EMS managing Kostt’s balancing power requirements has resulted in deviations in the frequency in Kosovo’s grid, which spread across the whole of the Entso-E grid.