Introduction
On 18 June 2026, the Albanian Parliament adopted Law No. 59/2026 “On the Electricity Sector” (the “New Law”), which entered into force on 15 July 2026 following publication in the Official Gazette. The New Law repeals in its entirety Law No. 43/2015 “On the Electricity Sector” and represents the most comprehensive overhaul of Albania’s primary electricity legislation in over a decade.
The reform is an important milestone in Albania’s EU accession process. Building on the framework established by Law No. 24/2023 “On the Promotion of the Use of Energy from Renewable Sources” (“Law on Renewable Energy”), it incorporates key elements of the EU Clean Energy Package into domestic law and extends concepts such as aggregation, renewable energy communities, net metering, and energy storage across the broader electricity market.
At the same time, the law significantly expands the range of regulated activities beyond generation, transmission, distribution, and supply to include aggregation, demand response, energy storage, and the operation of electric vehicle charging infrastructure, reflecting the transition toward a more flexible and consumer-oriented electricity sector.
New Licensing Framework
The new electricity framework significantly reshapes market entry and project development. Most notably, it expands the licensing regime by introducing two additional licensed activities, energy storage operation and aggregation, each eligible for licenses of up to thirty years.
At the same time, the law preserves proportionality through targeted exemptions where storage facilities with a nominal installed capacity of no more than 1 MW are exempt from licensing, while active clients and other producers connected to the national grid enjoy a corresponding exemption from production licensing for installations of the same size. To ensure a smooth transition, storage facilities already under development or in operation without a license must register with the Energy Regulator Authority (“ERE”) within sixty days of the law’s entry into force and submit a formal licensing application within the following twelve months.
The New Law also simplifies the authorisation process for new energy projects by raising the threshold for ministerial approval of generation facilities up to 10 MW and for storage projects up to 5 MW, with larger projects requiring the approval of the Council of Ministers.
Complementing these structural reforms is a new fiscal measure whereby, except for producers operating under concession agreements or through competitive award procedures, all electricity producers are subject to a royalty obligation equal to at least 2% of their annual output, which may be fulfilled either through the delivery of the corresponding electricity or through payment of its equivalent monetary value.
Aggregation and Energy Storage
The New Law establishes a more complete framework for aggregation within the electricity sector. Aggregation, the pooling and coordinated management of the electricity consumption, generation, or flexibility of multiple customers so that it may be offered as a single service in the market, may now be procured independently of a customer’s existing supply contract. Customers are therefore free to enter into aggregation agreements without the involvement of their supplier. Upon the conclusion of such an agreement, the aggregator must promptly notify the customer’s supplier, balancing service provider, and the relevant network operator. To safeguard customer choice, suppliers are expressly prohibited from taking adverse action against customers who engage an aggregator or from imposing discriminatory technical, administrative, or financial conditions on them. Detailed rules governing the licensing of aggregators and the implementation of aggregation contracts are to be adopted by ERE within twelve months of the Law’s entry into force.
The Law also introduces a dedicated regime governing energy storage facility operation, namely installations that absorb electricity, store it for a period of time, and subsequently re-inject it into the grid or make it available for consumption, thereby enhancing system flexibility and reliability. Operators of such facilities are entitled to own, develop, manage, and operate storage assets, participate in electricity trading, and access transmission and distribution networks under tariffs approved by ERE. In return, they must comply with licensing conditions, follow the instructions of network operators, and satisfy applicable transparency and reporting obligations. To preserve the independence of the transmission system, the Transmission System Operator is, save for limited exceptions, prohibited from owning, developing, managing, or operating energy storage facilities.
Active Clients and Net Metering
The New Law introduces the concept of the “active client” into the general electricity regulatory framework, as a concept broader than the existing “self-producer of renewable energy” under the Law on Renewable Energy. Active clients are not limited to renewable sources, empowering final customers to participate more actively in the electricity market without being subject to disproportionate technical requirements, administrative procedures, or discriminatory charges.
Active clients may operate either individually or through aggregation, consume electricity generated on their premises, store electricity through their own facilities, and sell self-generated electricity, including through power purchase agreements (PPAs). They may also provide demand response and flexibility services, participate in energy efficiency schemes, and delegate the management, operation, or maintenance of their installations to third parties, without such third parties acquiring the status of active clients.
A key transitional provision provides that, from 31 December 2026, active clients will no longer be permitted to participate in self-consumption schemes based on net billing where injected and consumed electricity are not separately measured, effectively marking the gradual transition away from traditional net metering arrangements.
Energy Communities and Licensing Exemptions
The New Law introduces the “civic energy community”, which complements but is distinct from the “Renewable Energy Community” established under the Law on Renewable Energy. The civic energy community is broader in scope as it is not limited to renewable energy and may engage in the full range of electricity sector activities, including production, distribution, supply, aggregation, storage, energy efficiency services, and charging point operation.
In addition, new non-licensed activities are introduced, including energy re-selling and energy sharing, allowing certain entities and active clients to provide electricity to final customers under conditions established by ERE.
The Law also recognises electricity charging point operation as an electricity sector activity, bringing it under ERE supervision and establishing obligations for the Distribution System Operator regarding charging infrastructure development.
Further Key Changes
The new law significantly strengthens consumer protection and market transparency. Suppliers providing universal service, as well as suppliers serving more than 200,000 customers, must offer dynamic electricity pricing contracts to customers equipped with smart meters. Universal service protection is simultaneously extended to small and micro enterprises, and the concept of energy poverty is formally incorporated into the regulatory framework, requiring the Ministry to identify and monitor affected households. Existing regulated tariffs for households and micro-enterprises will remain in place until the end of 2027. To facilitate informed consumer choice, ERE must also establish a free and independent comparison platform covering all electricity offers, designed to be accessible to persons with disabilities and to operate with minimal data requirements.
Household customers, as well as small and micro enterprises, are fully shielded from supplier-switching fees, while any early termination charges imposed on other customers must be proportionate and clearly disclosed in advance. Additional procedural safeguards are introduced for debt enforcement, as suppliers seeking to secure unpaid electricity claims through a mortgage lien over real property must first obtain a court-issued enforcement order. Finally, the sanctions regime is reinforced through the introduction of a minimum fine of ALL 500,000 (approx. EUR 5,300) for standard infringements, subject to a cap of 3% of the offender’s annual revenues, while particularly serious breaches by the transmission system operator may attract penalties of up to 10% of annual turnover.
Conclusion
The New Law marks a significant step in the modernisation of Albania’s electricity sector, creating a broader framework for emerging market activities and more active consumer participation. Its implementation will be further shaped by secondary legislation and rules to be adopted by ERE.
FAQ
When did Albania’s new Electricity Sector Law enter into force?
Law No. 59/2026 entered into force on 15 July 2026, replacing Law No. 43/2015 in its entirety.
What are the main changes introduced by the New Law?
The New Law expands the regulatory framework to cover aggregation, demand response, energy storage, active clients, civic energy communities, and electric vehicle charging infrastructure, while strengthening consumer protection and market transparency.
Which new activities require a licence?
Energy storage operation and aggregation are introduced as licensed activities, with licences available for periods of up to 30 years.
Are smaller generation and storage facilities exempt from licensing?
Yes. Storage facilities with a nominal installed capacity of up to 1 MW are exempt from storage licensing, while active clients and other producers connected to the national grid benefit from a corresponding exemption from production licensing for installations of the same size.
What changes apply to project authorisations?
Ministerial approval applies to generation projects up to 10 MW and storage projects up to 5 MW, while larger projects require approval from the Council of Ministers.
What rights do active clients have under the New Law?
Active clients may generate, consume, store and sell electricity, enter into PPAs, participate through aggregation, and provide demand response and flexibility services.
What happens to existing net metering arrangements?
From 31 December 2026, active clients may no longer participate in self-consumption schemes based on net billing where injected and consumed electricity are not separately measured.
How does the New Law strengthen consumer protection?
It introduces dynamic pricing requirements for certain suppliers, extends universal service protection to small and micro enterprises, restricts supplier-switching fees, recognises energy poverty, and requires ERE to establish a free electricity offer comparison platform.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
