Albania beats EU on renewable electricity but hydropower reliance brings risks

Renewable sources accounted for 105.2% of Albania's gross electricity consumption in 2025, Eurostat data shows, with only Norway and Iceland performing better across Europe.

Renewable sources accounted for 105.2% of Albania's gross electricity consumption in 2025, Eurostat data shows - a figure above 100% because the country generates more renewable power than it consumes in total. Only Norway and Iceland rank higher in Europe, and Albania outperforms every member of the European Union, a bloc it is striving to join.

The EU as a whole reached 49.9%, up 2.4 percentage points on 2024 and up from 15.9% in 2004, when the series began.

Austria led the EU member states on 90.8% and Sweden followed on 89.2%, with Denmark on 77.7%, Portugal 65.6%, Greece 60.9% and Spain 60.7% all above 60%. At the other end sat Malta on 11.2%, Czechia 19.2%, Luxembourg 23.3%, Slovakia 24.1% and Cyprus 27.5%.

The same Eurostat series put Albania at 85% of electricity consumed in 2016, again ahead of every EU member state and behind only Iceland and Norway. The ranking has barely moved in the nine years since; the number has, by more than 20 percentage points.

Some of that is new generation capacity. Most of it is water. The Komani plant on the Drin alone supplies around 65% of Albania's electricity, part of a hydropower system largely built under communism and extended since with private money, including by Norway's Statkraft.

There has also been a rapid build-out of small hydropower plants across Albania and the wider Western Balkans, which has drawn sustained criticism from environmental groups worried about what is left of Europe's wild rivers.

However, Albania’s renewables output can fluctuate dramatically from year to year since a grid that is nearly all hydropower is a grid whose output is set by the weather.

Net power generation rose 24.1% y/y in 2015 and 21.7% in 2016. Then a prolonged drought hit: generation fell 36.6% in 2017, and private hydropower operators posted double-digit income falls for the year. When the rain returned, output jumped almost fourfold y/y in 3Q18.

These swings land on the state budget: in a dry year Albania becomes a net electricity importer at whatever the regional market is charging, which in 2022 meant buying into a European price spike.

This is only likely to worsen in future, as climate projections for the Mediterranean basin point to drier, hotter summers and more variable precipitation - which is a slow structural risk to the single asset the entire system rests on.

In other ways, though, Albania’s situation looks enviable. This spring, Albania weathered the Middle East energy shock better than most of the Western Balkans precisely because its electricity system barely touches imported gas. The economy grew 3.8% in 4Q25 on household consumption, private investment and services exports, and the Bank of Albania held its policy rate at 2.5% in May, expecting the oil-price shock to lift inflation only briefly.

"The increase in oil and energy prices in world markets will cause a slight and temporary increase in inflation above the target during 2026, as well as a marginal slowdown in the pace of economic growth in the country," central bank governor Gent Sejko said on May 6, adding that he expected no long-term damage.

That insulation is real but partial. Albania still imports oil products for transport and industry, so the shock arrives through the fuel pump rather than the power socket.

The fix for weather risk is not more rivers. Albania has spent the past five years building solar and wind capacity.

Voltalia's 140 MW Karavasta plant, the largest solar park in the Western Balkans, has been running since December 2023, and was followed by the French developer's second Albanian project, the 100 MW Spitalla plant. A subsequent 300 MW solar auction produced eight winners, and licences have now been granted for close to 980 MW of solar capacity.

Meanwhile, TotalEnergies’ subsidiary Total Eren and Austria’s Verbund were among the winning bidders the country’s first wind power auction in 2023.

Albania stands out in a region where coal powered generation is the norm. Unlike the hydropower-based power system Albania inherited, most of the former-Yugoslavian countries had power systems that relied heavily on coal.

Kosovo in particular which still makes almost all its electricity in ageing coal plants, came last in Europe with just 9.4% of electricity consumed generated from hydropower; two countries sharing a border, a grid interconnection and a language, are separated by roughly 96 percentage points.

The Western Balkans generated 65.8 TWh of electricity in 2025, and just under half of it — 48.2% — came from coal, according to IEA monthly statistics. Serbia, the region's largest producer at 34.3 TWh, made 62.0% of its power from coal and 31.5% from renewables. Bosnia & Herzegovina, the second largest at 14.5 TWh, was 56.1% coal against 43.5% renewables. North Macedonia managed 55.3% renewable, though 28.6% of its output still came from coal and another 14.1% from gas. Montenegro reached 77.9%, the closest any of them comes to Albania, with coal supplying the remaining 22.1%.

Strip Albania out and the region generates 39.0% of its electricity from renewable sources. Include it and the figure rises to 46.8% — and Albania contributes just 12.8% of the region's output. One small country is carrying a disproportionate share of the neighbourhood's green generation, and it is doing it with water.

The contrast is sharper than the headline percentages suggest, because the coal is not merely domestic. Bosnia generated 133% of its own final consumption last year and Serbia 110%, both exporting the surplus into a regional grid that Albania also draws on. When Albanian rivers run low — as they did in 2019, when output fell to 5.2 TWh from 8.5 TWh the year before — the power that replaces them is largely Serbian and Bosnian lignite. Albania's 100% renewable generation and its 3.4 TWh of imports last year are the same story told twice: the country is green when it rains, and connected to a coal grid when it does not.