Summary The electricity production in Albania is highly based on hydro-power, accounting for 97% of the total production. However, the amount of electricity produced by the hydropower plants (HPPs) varies much every year due to climate factors such as the amount of rain and snow falls. For this reason, the Albanian electricity sector is often not stable and in need of imported electricity. Studies indicate also that the high dependency of the Albanian electricity sector on hydro-power, makes it also very vulnerable in the long term, due to expected impacts of climate change, including high temperatures and drought. Moreover, technical losses due to the low efficiency in the transmission and distribution system, are higher than 30%. This study attempts to research whether the Albania can make use of its other renewable potentials along with the existing hydro-potentials, for creating a sustainable and self-reliable electricity system by 2030. For this reason, the methodology used is a combination of literature review and model building using the Power Plan modeling software. Firstly, the amount of electricity was researched, which can be saved annually if the losses in transmission and distribution network would be not higher than 8% in 2030. This target was based on the draft of the Albanian National Energy Strategy. Furthermore, literature was revised in order to find the relevant data on the renewable potentials Albania holds, which could be effectively used for electricity production. Based on these potentials, several scenarios were built, including a business-as-usual (BAU) scenario, a scenario where transmission and distribution (T&D) losses are reduced to 8% by 2030, and a fully renewable scenario in which apart from hydro-power the production is also based on wind, solar power and pumped-hydro storage. The findings suggest that a gradual reduction of losses to 8% losses in 2030, can reduce the need for electricity production substantially, up to more than 2000 GWh a year, with an average of 1503 GWh per year over a simulated period of 17 years. Moreover, the electricity needed to meet the country’s demand, can be produced by hydro and solar power, for which Albania holds good potentials. Onshore wind power can also play an important role in the renewable energy mix, even though the potentials are not as high as hydro and solar power. The model built for this research suggests that if no efficiency improvements in the T&D system will occur, the electricity production needed to fulfil the domestic demand in 2030 will reach 11861 GWh, and if new investments will happen only in the hydro-power sector, chances are that the demand will not be fully met and a constant need for imported electricity will be present every year (BAU scenario). Other scenarios suggest that the decrease in losses to 8% in 2030 will drop the needed electricity production to 9086 GWh in 2030. However, the independency from imported electricity can only be achieved if apart of existing and new HPPs, new solar and wind plants are installed, along with enough capacities for pumped hydro storage. Indeed, one of the variants of the fully renewable scenarios shows that without pumped-hydro storage, it is impossible to meet the demand for electricity even if the installed capacities solar installations double. This study is the first one to suggest that pumped hydro storage in Albania is of crucial importance for the sustainable development of the electricity sector. It is advised to continue with further studies in the same direction, to assess better the potentials of the country for hydro-storage both in the national and international context.
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