Western Balkans could see a 20 GW increase in installed capacity by 2040 with nearly 65% coming from renewables.
OXFORD (AURORA ENERGY RESEARCH)—Aurora Energy Research, is pleased to officially announce the expansion of its market forecasting services, now offering full granularity modelling for five new countries: Albania, Kosovo*, North Macedonia, Montenegro, and Bosnia & Herzegovina, available under its Western Balkans Power and Renewables Market Forecast service. The announcement follows the conclusion of a multiclient study comprised of three workshops, the results of which reveal increased investor interest in the Western Balkans (WB).
Aurora estimates the combined installed capacity in the five countries examined, is expected to grow by 20 GW by 2040 and by as much as 35 GW by 2060 compared to today’s levels leading to tens of billions in investments. Renewables are expected to take the lion’s share with nearly 65% of that growth while BESS, interconnectors and H2 Combined-Cycle Gas Turbine (CCGT) make up the remaining capacity additions. Solar PV shows the fastest rate of growth and absolute capacity value, according to the global power market analytics provider.
Looking into the wholesale prices, the analysis expects WB to follow similar trends as other SEE markets but will have regional nuances based on the local energy system evolution. Short-term volatility and increased commodities are foreseen to keep prices near or over the 100 €/MWh mark until 2030. While, long term baseload prices, under Aurora’s central scenario, are expected to hover between 70 and 80 €/MWh, driven by high commodity prices pushing prices up, and increasing renewables’ penetration that acts in the opposite direction.
Renewable asset capture prices will benefit from lower cannibalisation levels in the early years compared to other SEE countries, as there is less capacity in the system, giving early movers an advantage, the analysis assesses. Over time, the momentum for storage seen in SEE will likely spread to the Western Balkans.
The analysis further highlights that the speed of decarbonisation in the region will largely depend on the EU’s Carbon Border Adjustment Mechanism (CBAM) implementation or alignment with the EU Emissions Trading System (EU ETS). The shift away from lignite could take time, Aurora’s experts say, with a full exit expected by 2045, but its share in the power system is expected to decrease significantly in the next decade due to pressure from CBAM and carbon taxes.
Panos Kefalas, Research Lead at Aurora Energy Research, comments on the region’s potential:
“The Western Balkans are Europe’s most rapidly changing power markets. Ageing thermal fleets, liberalisation of markets, policy support schemes and strong fundamental economics are poised to bring the Western Balkans at the forefront of developers’ agendas.”
The Western Balkans Power and Renewables Market Forecast provides in-depth insights, detailed market analysis, and data-driven projections to support investors, developers, and stakeholders in making informed strategic decisions in the evolving energy landscape in these five countries. You can get in touch with our commercial team for further information.
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Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 16 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of 900 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to ease the global energy transition through widely trusted quantitative analysis and high-quality decision support.
