Albania, North Macedonia, Kosovo and EU member Greece have signed a memorandum of understanding on Tuesday aimed at coupling their day-ahead power markets.

The deal was made possible under the initiative of the US Agency for International Development (USAID) and it was signed by energy regulators, TSOs, and power exchanges of all four countries.

The statement issued by the Greek energy regulator RAE does not mention the timeline for the start of this market coupling. It only states that a working group was created “to coordinate forthcoming actions”.

RAE added that the integration process will be based on the model of Greek market coupling with Italy and Bulgaria.

“The coupling of the electricity markets in the Western Balkans introduces a new era of energy cooperation that promises significant advantages for all countries of the region and consequently for the rest of Europe,” said RAE’s president Athanasios Dagoumas.

Market liberalisation

Kosovo and Albania have already established a joint power exchange, Alpex, which is currently active only on the Albanian side, while day-ahead trading in Kosovo is expected to start in late November. North Macedonia launched its own bourse, Memo, in May.

Both Albania and North Macedonia border Greece, while Kosovo’s market coupling with this EU member state should be achieved via its connection to Alpex and the Albanian TSO Ost.

Ost CEO Skerdi Drenova expects that market coupling will foster a more efficient electricity market.

“This step aligns with the broader objective of market coupling, which is to facilitate seamless cross-border electricity transactions, contributing to price reduction and the advancement of a greener, more sustainable energy sector,” Drenova said according to a joint statement of all four countries’ market stakeholders.

Regional market players see market liberalisation as key to boosting liquidity on the Balkan power exchanges. While Albania and North Macedonia have more advanced liberalised markets, Kosovo has only three consumers buying power on the open market with the rest receiving electricity at subsidised prices.