Croatia’s Renewable Energy Future in Question?

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Association of Renewable Energy is worried about the future of renewable energy in Croatia.

The issue of renewable energy sources is unknown to majority of the Croatian public, but it is again in the spotlight after recent reports about possible electricity price increases. One of the main reasons being mention for higher bills was an alleged increase in the cost of renewable energy sources, reports on March 9, 2017.

Not knowing how to solve this problem, the government recently decided to maintain the status quo and postpone until 2018 the implementation of the Law on Renewable Energy Sources. A debate has even been started about whether Croatia even needs renewable energy, what effect it has on the economy, and what is the true cost of the green energy. There are a variety of assessments which can be heard, and the whole situation is further complicated by the fact that the electricity market has been liberalized and that there is no constant electricity price.

Therefore, the Association of Renewable Energy warns that media speculation, as well as politicians’ statements, greatly complicate their job. “For years, there have been no new public competitions for renewable energy quotas, but in the recent months banks have been giving up on projects for which they have already approved funding. There is talk about retroactive introduction of excise taxes on renewable energy, and there is a negative atmosphere with claims that these projects are full of irregularities. The fact is that this is one of the most transparent sectors in Croatia and that all information are accessible”, said Aljoša Pleić, president of the association. He believes that the current situation is confusing for citizens.

“Fees for renewable energy sources are now calculated based on the total power consumption, and not just on some 15 percent of electricity which typically comes from renewable energy sources. We have proposed a model according to which bills would make it clear what is the variable price of electricity, which depends on market conditions, and what is the renewable energy fee, which is fixed. This is a model which is supported by the renewable energy producers, as well as the operators”, said Pleić.

There is also constant speculation about the price which the Croatian Electrical Company (HEP) pays for a kilowatt of energy produced from renewable sources. Although there are claims that the price is as much as 90 lipa per kWh, the actual figure is 71 lipa for older projects with a minimum return of seven years, and 53 lipa for newer projects with period of return of investment of nine years. The price of non-renewable energy electricity is now around 43 lipa per kWh. However, in January, wholesale electricity prices in Croatia and neighbouring countries varied between 40 and 180 euros per MW.


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