Western Balkans, a "magnet" for investors - Expected to add 20 GW of energy capacity by 2040
The Western Balkans could see an increase of 20 GW of installed capacity by 2040, with nearly 65% coming from renewable sources, according to Aurora Energy Research.
The company released its first forecast for the Western Balkans, targeting investor movement. Aurora expanded its market forecasting services, offering full-scale detailed modeling for Albania, Kosovo, North Macedonia, Montenegro, and Bosnia and Herzegovina.
The combined installed capacity in the Western Balkans, excluding Serbia, is expected to increase by 20 GW by 2040 and up to 35 GW by 2060, compared to current levels, the report says. Renewables account for the largest share at almost 65%, while battery energy storage systems, interconnectors and hydrogen turbines account for the remaining capacity additions.
Solar power shows the fastest growth rate and absolute value of capacity, according to the global provider of energy market analysis.
Looking at wholesale prices, the analysis expects the Western Balkans to follow similar trends to other Southeastern European markets, but with regional nuances, based on the evolution of the local energy system. Short-term volatility is projected to keep prices close to or above 100 euros per MWh until 2030, while long-term prices are expected to be between 70 and 80 euros per MWh.
As for the speed of decarbonisation in the region, it will largely depend on the implementation of the EU Carbon Border Adjustment Mechanism (CBAM) or alignment with the EU Emissions Trading System. The move away from lignite may take time, analysts say, with a full shutdown expected by 2045, but its share in the energy system is expected to decline significantly in the next decade.
"The Western Balkans are among the fastest-changing energy markets in Europe. Aging thermal fleets, market liberalization, policy support schemes, and a strong underlying economy are poised to bring the region to the top of developers' agendas," Aurora points out.
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