{"id":348,"date":"2026-08-12T10:14:28","date_gmt":"2026-08-12T10:14:28","guid":{"rendered":"https:\/\/emini-lawfirm.com\/transformation-of-the-legal-framework-in-the-electricity-sector\/"},"modified":"2026-08-17T10:41:49","modified_gmt":"2026-08-17T10:41:49","slug":"transformation-of-the-legal-framework-in-the-energy-sector","status":"publish","type":"post","link":"https:\/\/emini-lawfirm.com\/en\/transformation-of-the-legal-framework-in-the-energy-sector\/","title":{"rendered":"Transformation of the Legal Framework in the Energy Sector"},"content":{"rendered":"\n

Legal analysis of Law No. 59\/2026 \u201cOn the Electricity Sector\u201d<\/em><\/strong><\/p>\n\n\n\n

The adoption of Law No. 59\/2026 \u201cOn the Electricity Sector\u201d represents not merely an improvement to the existing legislation, but a complete reshaping of the legal and regulatory framework of the sector. The new law expressly repeals, in Article 136 thereof, Law No. 43\/2015, as amended, and establishes a new regime for the organization, functioning and supervision of the electricity market in Albania. <\/p>\n\n\n\n

WHAT ARE THE KEY CHANGES?<\/strong><\/h2>\n\n\n\n

1. Deepening alignment with the European Union acquis<\/h2>\n\n\n\n

From a legal perspective, one of the key elements is the partial alignment with the European legislation of the Clean Energy Package. Law No. 43\/2015 had also been drafted within the framework of aligning the Albanian energy sector with the EU acquis. <\/p>\n\n\n\n

The novelty lies in the new level and scope of alignment. Law No. 59\/2026 aligns the Albanian framework with the more recent European acts of 2019, specifically with: <\/p>\n\n\n\n

    \n
  • Directive (EU) 2019\/944 on common rules for the internal market for electricity;<\/li>\n\n\n\n
  • Regulation (EU) 2019\/943 on the internal market for electricity;<\/li>\n\n\n\n
  • Regulation (EU) 2019\/941 on risk-preparedness in the electricity sector;<\/li>\n\n\n\n
  • Regulation (EU) 2019\/942 establishing and governing the functioning of the European Union Agency for the Cooperation of Energy Regulators \u2013 ACER.<\/li>\n<\/ul>\n\n\n\n

    The use of the wording \u201cpartially aligned\u201d is legally significant: the adoption of the law does not automatically complete the harmonization process. Effective implementation will depend on the adoption of secondary legislation, the adjustment of market rules, and the harmonization of administrative and regulatory practice. <\/p>\n\n\n\n

    The \u201ctransitional\u201d period<\/h2>\n\n\n\n

    The repeal of Law No. 43\/2015 does not mean that the entire existing regulatory framework is immediately replaced in practice.<\/p>\n\n\n\n

    The law contains transitional provisions and deadlines for the adjustment of operators, procedures and technical rules. At this stage, important interpretative issues may arise: which act applies, to what extent the effects of existing licences and authorizations continue, and which obligations require immediate adjustment. <\/p>\n\n\n\n

    What legal risks arise during the transitional period between the old law and the new framework?<\/strong><\/p>\n\n\n\n

    The transitional period also creates legal risk because Law No. 59\/2026 has repealed Law No. 43\/2015, while not all regulations, methodologies and implementing procedures can be replaced immediately. Article 136 addresses the repeal of the previous framework, but the wording of paragraph 2 concerning secondary legislation requires careful interpretation, because the published text provides for their application, insofar as they do not conflict with the new law, \u201cuntil its entry into force\u201d. This may create uncertainty as to the secondary legal basis that should be used after entry into force and until the new acts are adopted. <\/p>\n\n\n\n

    The first risk concerns identifying the applicable rule. An operator may hold a valid licence and operate under a previous regulation, while the new law has changed the classification of the activity, licensing criteria or reporting obligations. In such a situation, it must be assessed whether the previous act continues to apply, whether it conflicts with the new law, or whether there is a gap requiring intervention by ERE. <\/p>\n\n\n\n

    Another risk is the failure to identify a new obligation in due time. Energy storage is an illustrative case: operators with facilities under development or in operation, without a separate storage licence, must notify and register with ERE. This shows that a project lawfully initiated under the previous framework may require a new administrative adjustment without necessarily having been unlawful at its origin. <\/p>\n\n\n\n

    Uncertainty may also affect existing contracts. Supply, sale and purchase, balancing, grid-connection or capacity-use contracts do not automatically become invalid, but certain clauses may need to be amended when they conflict with mandatory rules of the new law. In particular, provisions on licensing, metering, balancing responsibility, separation of activities, customer rights, etc. should be reviewed. <\/em><\/strong><\/p>\n\n\n\n

    There is also a risk of non-uniform administrative practice. Until ERE adjusts its rules and procedures, there may be differences in the way applications initiated before entry into force, licence renewals and new activities are handled. ERE itself has presented Law No. 59\/2026 as the new framework and has begun the process of implementing it, while classifying Law No. 43\/2015 as repealed. Therefore, during the transitional period, operators should not rely solely on the fact that they \u201chave always operated this way\u201d or that a previous licence formally remains in force. A specific compliance review is required to determine whether the existing activity is still covered, whether notification, registration, amendment of a licence or contractual adjustment is required. <\/p>\n\n\n\n

    What will happen to licences, authorizations and contracts concluded under the old law?<\/strong><\/p>\n\n\n\n

    The repeal of Law No. 43\/2015 does not mean that licences, authorizations and contractual relationships created during its application automatically become invalid. In principle, individual acts lawfully issued continue to produce effects until their expiry, amendment, replacement or repeal in accordance with the relevant procedure. Law No. 59\/2026 must be read together with its transitional provisions and with the acts that ERE will adopt for implementation of the new framework. <\/p>\n\n\n\n

    However, the continued validity of a licence does not exempt the entity from the obligation to adapt to the new requirements. If the new law changes the conditions for carrying out the activity, introduces new reporting obligations, or recognizes an activity that was previously not licensed separately, the operator must verify whether the existing licence still covers the actual activity or whether an amendment, supplement or new licence is required. <\/p>\n\n\n\n

    The clearest case concerns energy-storage facilities. Operators who, at the time the new law entered into force, had facilities under development or in operation but did not hold a separate storage licence must notify and register with ERE pursuant to Article 51. ERE has announced that registration must be completed within 60 days from the entry into force of the law; this shows that the new framework requires concrete adjustments even for projects that were initiated earlier. <\/p>\n\n\n\n

    Existing contracts, such as supply, sale and purchase, grid-connection or balancing contracts, are likewise not cancelled merely because the law has changed. However, their provisions must be reviewed against the new mandatory rules. Where a contractual term conflicts with the new law or with a new ERE act, contractual autonomy cannot justify a regime that is incompatible with the law. <\/p>\n\n\n\n

    3. Expansion of the scope of regulation<\/h2>\n\n\n\n

    The law is no longer limited only to electricity generation, transmission, distribution and supply. Its scope now also includes: <\/p>\n\n\n\n

      \n
    • aggregation<\/li>\n\n\n\n
    • demand response;<\/li>\n\n\n\n
    • electricity storage;<\/li>\n\n\n\n
    • operation of recharging points;<\/li>\n\n\n\n
    • balancing markets and ancillary services;<\/li>\n\n\n\n
    • the day-ahead market and the intraday market;<\/li>\n\n\n\n
    • integration of the Albanian market with regional and European markets.<\/li>\n<\/ul>\n\n\n\n

      This expansion has direct legal consequences for determining the status of operators, authorization and licensing procedures, contractual responsibilities, grid access and reporting obligations.<\/p>\n\n\n\n

      Can an entity sell or share energy with other businesses within the same premises?<\/strong><\/p>\n\n\n\n

      Law No. 59\/2026 recognizes this possibility, but makes a legal distinction between energy sharing, energy resale and ordinary supply activity. According to Article 3, point 73, energy sharing means the supply of a final customer by an active customer or a citizen energy community, where the energy has been produced by the entity sharing it and the generation facility is located at the same location as the purchasing customer. This may be relevant, for example, to a business centre that produces photovoltaic energy and shares it with entities operating within the same complex. <\/p>\n\n\n\n

      By contrast, resale concerns energy that the entity has previously purchased from a licensed supplier and passes on to other users within its premises. Therefore, the main distinction lies in the origin of the energy: in sharing, the energy is self-produced, whereas in resale the energy has been purchased and subsequently invoiced within the same environment. <\/p>\n\n\n\n

      According to Article 40, point 9, both resale and energy sharing are exempt from the requirement to hold a supply licence. However, this exemption does not apply automatically. Article 40, point 10 requires ERE first to determine the maximum-price conditions; only after their approval and after notification to ERE may the entity carry out sharing or resale without a supply licence. <\/p>\n\n\n\n

      This means that a business cannot treat self-generation as an unlimited authorization to become the supplier of all surrounding entities. The exemption is linked to defined conditions: the same location, the origin of the energy, the maximum price, notification to ERE, and compliance with market and grid rules. If energy is supplied outside this configuration or the activity takes the form of regular supply to third-party customers, a supply licence may be required pursuant to Article 40, point 2, letter \u201c\u00e7\u201d. <\/p>\n\n\n\n

      Thus, the law creates new opportunities for shopping centres, industrial parks, multi-tenant buildings and tourist complexes, but the legal boundary remains clear: sharing or resale without a licence is permitted only within the exemption and the conditions to be determined by ERE. Until those conditions are approved, the provision cannot be treated as a right that is immediately exercisable in practice. <\/p>\n\n\n\n

      From passive consumer to active participant<\/h2>\n\n\n\n

      One of the conceptual changes of the new legal framework is the shift from the traditional model, in which the final customer was mainly limited to purchasing and consuming electricity, toward a model in which the customer can participate actively in the market.<\/p>\n\n\n\n

      In addition to generation, transmission, distribution and supply, Law No. 59\/2026 includes within its regulatory scope aggregation, demand response, electricity storage and the operation of recharging points. This follows expressly from Article 2 of the law and demonstrates the expansion of the legal relationships now covered by energy legislation. <\/p>\n\n\n\n

      In practical terms, a customer who installs photovoltaic panels is no longer necessarily treated only as a recipient of energy from the grid. Depending on the legal and regulatory conditions, the customer may: <\/p>\n\n\n\n

        \n
      • produce energy for its own needs;<\/li>\n\n\n\n
      • store the energy produced through batteries;<\/li>\n\n\n\n
      • sell surplus energy;<\/li>\n\n\n\n
      • adjust consumption in response to market signals;<\/li>\n\n\n\n
      • participate in the market through an aggregator;<\/li>\n\n\n\n
      • become part of an energy community.<\/li>\n<\/ul>\n\n\n\n

        Illustrative example: a commercial entity that has installed photovoltaic panels and a battery system may consume the energy produced during the day, store the surplus, and use it during hours when the price or demand is higher. If it operates through an aggregator, its capacity may be combined with the capacities of other customers and offered on the market as demand response. <\/em><\/p>\n\n\n\n

        From a legal perspective, this creates new contractual and regulatory relationships between the customer, supplier, aggregator, grid operator and, where applicable, the operator of the storage facility. The inclusion of storage as a separate activity is already concrete in regulatory practice: ERE has required the registration of operators that have storage facilities under development or in operation and do not hold a separate licence. <\/p>\n\n\n\n

        The legal significance of this transformation lies in the fact that the customer is no longer merely a protected party to a supply contract. The customer may also acquire the status of a market participant, with rights but also obligations relating to: <\/p>\n\n\n\n

          \n
        • metering and data exchange;<\/li>\n\n\n\n
        • access to and connection with the grid;<\/li>\n\n\n\n
        • licensing or registration, where required;<\/li>\n\n\n\n
        • contractual liability;<\/li>\n\n\n\n
        • compliance with technical and market rules.<\/li>\n<\/ul>\n\n\n\n

          Thus, the shift from passive consumer to active participant is not merely a terminological change. It represents an expansion of the customer\u2019s legal status and the creation of new opportunities for generation, storage, flexibility and market participation, accompanied by new legal and regulatory compliance requirements. <\/p>\n\n\n\n

          Can the consumer now simultaneously become a producer, storage operator and seller of energy?<\/strong><\/p>\n\n\n\n

          Law No. 59\/2026 changes the traditional concept of the consumer by recognizing the figure of the active customer. This is the final customer who, individually or together with other customers, may consume, store or sell electricity generated by itself, as well as participate in flexibility or energy-efficiency schemes. Thus, the consumer does not necessarily remain merely a recipient of energy and payer of the bill. <\/p>\n\n\n\n

          According to Article 96, the active customer may carry out the activity directly or through an aggregator, sell self-generated electricity, and own or operate a storage facility.<\/p>\n\n\n\n

          However, active-customer status does not constitute a general authorization for electricity trading. The right to sell is, in principle, linked to self-generated electricity. Where the entity purchases energy for the purpose of resale, regularly supplies third parties, or turns the sale into its principal activity, the activity may fall within the regime of licensed generation, trading or supply. <\/p>\n\n\n\n

          The active customer also remains subject to the system\u2019s technical and economic requirements. Energy taken from the grid and energy injected into it must be metered separately, while responsibility for imbalances must be borne by the customer or delegated to another party. Thus, the law grants the consumer a broader role, but links the exercise of that role to metering, grid connection, balancing and compliance with ERE acts. <\/p>\n\n\n\n

          In conclusion, the consumer may simultaneously be a producer, storage operator and seller of self-generated energy. The legal issue to be assessed in each case is whether the entity continues to operate within the status of an active customer or whether its activity has acquired the scale of a separate energy activity requiring licensing. <\/p>\n\n\n\n

          Where is the boundary between energy sharing, resale and supply requiring a licence?<\/strong><\/p>\n\n\n\n

          Law No. 59\/2026 treats energy sharing, resale and electricity supply as distinct legal relationships. The distinction is not merely terminological, because the classification of the activity determines whether the entity may operate without a licence or must be licensed by ERE. <\/p>\n\n\n\n

          In energy sharing, the energy is produced by the active customer itself or by the citizen energy community and is provided to other customers within the conditions and territorial limits laid down by law. In resale, the entity does not transfer to users energy that it produced itself, but rather energy that it purchased from a licensed supplier, usually within the premises or complex that it manages. This distinction relates primarily to the origin of the energy and to the relationship that the entity has with final users. <\/p>\n\n\n\n

          According to Article 40, sharing and resale may be exempt from the supply-licence requirement, but only within the conditions provided by law and the rules to be adopted by ERE, including conditions on the maximum price and notification of the authority. Therefore, the exemption should not be interpreted as a general right for every building owner or business to supply third parties without restriction. <\/p>\n\n\n\n

          The activity moves toward licensable supply when the entity sells energy independently and in an organized manner to final customers, outside the specific configuration of sharing or resale. Legally significant indicators include: supplying customers outside the entity\u2019s premises, creating an independent customer portfolio, systematically purchasing energy for the purpose of resale, and carrying on the activity as a separate commercial business. Supply is among the activities for which the law provides for licensing by ERE. <\/p>\n\n\n\n

          4. Competition and separation of activities<\/h2>\n\n\n\n

          Law No. 59\/2026 strengthens the requirements for the legal, organizational and accounting separation of activities in the electricity sector, with the aim of ensuring transparency, non-discrimination and the effective functioning of the market.<\/p>\n\n\n\n

          According to Article 38, every licensed entity carrying out more than one activity must maintain separate accounts for each licensed activity, as well as for activities unrelated to the electricity sector. The purpose of this obligation is to prevent cross-subsidization and distortion of competition. For transmission and distribution activities, the accounts may not simply be presented on a consolidated basis. <\/p>\n\n\n\n

          In practical terms, cross-subsidization may occur where the revenues or costs of a regulated activity, for example distribution, are used to finance or favour another competitive activity, such as supply or trading. Such a practice may give the integrated entity an unfair advantage over other market operators. <\/p>\n\n\n\n

          The law also requires revenues arising from any right over the transmission or distribution network to be identified separately in the entity\u2019s accounts. Annual financial statements must be audited, and the audit must verify whether the obligation to avoid cross-subsidization between licensed activities has been respected. These statements must be published and made available to interested parties. <\/p>\n\n\n\n

          With regard to licensing, Article 40, point 3 provides that a separate licence is issued for each activity subject to licensing, even where several licences are granted to the same company. The law includes as licensed activities generation, transmission, distribution, supply, trading, market operation, operation of storage facilities and aggregation. <\/p>\n\n\n\n

          A stronger level of separation is provided for network operators. According to Article 59, the Transmission System Operator must carry out its activity separately from generation and supply activities, ensuring the independence of its control and decision-making. <\/p>\n\n\n\n

          Likewise, Article 87 provides that the Distribution System Operator must be separated and independent from activities unrelated to distribution. In principle, it may not own, develop, manage or operate energy-storage facilities, except in the specific cases provided by law. <\/p>\n\n\n\n

          The legal significance of these provisions lies in the fact that network operators control infrastructure that is essential for market entry. For this reason, they must act neutrally and must not favour producers, suppliers or affiliated companies in granting access, applying tariffs or providing information. <\/p>\n\n\n\n

          Failure to comply with the separation of activities and the maintenance of separate accounts constitutes an administrative offence under the sanctioning provisions of the law, which expressly refer to the obligations laid down in Articles 38, 59 and 87.<\/p>\n\n\n\n

          In conclusion, separation of activities is not merely a formal accounting requirement. It is a legal mechanism designed to ensure that network costs are not used to finance competitive activities, that affiliated operators do not obtain unfair advantages, and that all participants have equal and non-discriminatory access to the market. <\/p>\n\n\n\n

          What is cross-subsidization and how does the law seek to prevent it?<\/strong><\/p>\n\n\n\n

          Cross-subsidization occurs when the revenues, tariffs or financial resources of one activity are used to cover the costs of or favour another activity. In the energy sector, the risk is particularly evident when the same company or group simultaneously carries out regulated activities, such as transmission or distribution, and competitive activities, such as supply or trading. <\/p>\n\n\n\n

          For example, if the costs of competitive supply are improperly charged to distribution tariffs, the supplier affiliated with the network operator may offer lower prices than competitors, not because of its efficiency, but because part of the costs is borne by network users. This is an economic illustration of cross-subsidization and not a specific case defined by the law. <\/p>\n\n\n\n

          To prevent this, Article 38 of Law No. 59\/2026 requires licensed entities to maintain separate accounts for each energy activity, as though the activities were carried out by different undertakings. Separate accounts must likewise be kept for activities outside the energy sector. The expressly stated purpose of this separation is to avoid discrimination, cross-subsidization and distortion of competition. <\/p>\n\n\n\n

          Accounting separation must make identifiable the revenues, costs, assets and liabilities attributable to each activity. In particular, transmission and distribution activities must be reflected separately from supply, trading and other competitive activities. This enables ERE and auditors to verify whether network tariffs are used solely to cover lawful network costs. <\/p>\n\n\n\n

          I am not an expert in the technical field, but in my view cross-subsidization does not mean every financial transfer within a group of companies. The legal issue arises when costs or revenues are allocated in such a way that a competitive activity obtains an unfair advantage, regulated tariffs are used for other purposes, or certain users indirectly finance another category. <\/p>\n\n\n\n

          How do dynamic-price contracts work and what risk does the customer assume?<\/strong><\/p>\n\n\n\n

          Law No. 59\/2026 recognizes the dynamic-price contract as a supply contract in which the price paid by the customer does not remain fixed, but reflects price changes in spot markets, including the day-ahead market and the intraday market. According to the definition in Article 3, point 60, these changes are reflected at intervals linked to the frequency of market settlement. This means that the price may change over much shorter periods than under a traditional supply contract. <\/p>\n\n\n\n

          In practice, the customer may benefit when the market price of electricity is low and when it is possible to shift consumption to more favourable time periods. A business that can schedule its processes, use a smart metering system, or combine consumption with batteries may reduce costs. However, the supplier does not guarantee an unchanged price: when spot prices rise, the customer\u2019s financial exposure also increases. Therefore, this contract transfers a greater share of market-price fluctuation risk to the customer. <\/p>\n\n\n\n

          The law also establishes specific safeguards. According to Article 98, the supplier must inform the customer of the opportunities, costs and risks of the dynamic contract and must obtain the final customer\u2019s consent before switching to such a contract. This means that the supplier cannot unilaterally transfer the customer to a dynamic-price product. ERE is required to monitor the development of these contracts, their impact on customers\u2019 bills, price volatility and possible abusive practices. <\/p>\n\n\n\n

          From a legal perspective, before signing, it should be clear which market or index is used to determine the price, how often it changes, what additional charges apply, how metering data are obtained, and how the contract may be terminated. A contract described as \u201cdynamic\u201d but which does not explain the formula, pricing interval and the customer\u2019s maximum exposure may create serious problems of transparency and contractual protection. <\/p>\n\n\n\n

          Thus, a dynamic contract is not necessarily cheaper; it is more closely linked to the market. The benefit depends on the consumption pattern and the customer\u2019s ability to respond to prices, while prior consultation is important in assessing whether the flexibility offered justifies the financial risk assumed by the customer. <\/p>\n\n\n\n

          Legal conclusion<\/h2>\n\n\n\n

          Law No. 59\/2026 marks the transition from a traditional model of sector regulation toward a more decentralized, competitive, digitalized market integrated with the European market.<\/p>\n\n\n\n

          However, the legal transformation does not end with the adoption of the law. It will be given concrete effect through secondary legislation, ERE decisions, market rules, and the manner in which they are interpreted and applied by the competent institutions. <\/p>\n\n\n\n

          In my view, this will be a long journey and an institutional test, but it was certainly a necessity for the energy sector. In projects characterized by licensing, authorizations, significant investments and complex contractual relationships, prior legal consultation constitutes an essential basis for identifying obligations, managing regulatory risk and structuring the project on a sustainable basis. <\/p>\n\n\n\n

          <\/p>\n","protected":false},"excerpt":{"rendered":"

          Legal analysis of Law No. 59\/2026 \u201cOn the Electricity Sector\u201d The adoption of Law No. 59\/2026 \u201cOn the Electricity Sector\u201d represents not merely an…<\/p>\n","protected":false},"author":1,"featured_media":535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nTransformation of the Legal Framework in the Energy Sector - Emini Law Firm<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/emini-lawfirm.com\/en\/transformation-of-the-legal-framework-in-the-energy-sector\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Transformation of the Legal Framework in the Energy Sector - 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