Energy Policy, Legislative Background, Funds and Programmes
The European Energy Charter, which Croatia signed in 1991, implies the introduction of a long-term co-operation model in Europe in a market economy environment, which is based on co-operation between the signatories.
The development of energy market in Croatia has formally begun in July 2000 by rendering the Reform Program of Energy Sector in the Republic of Croatia. A year later the Parliament passed a set of energy acts as the Energy Act, Electric Energy Market Act, Gas Market Law, Oil and Petroleum Products Market Act, The Act Regulating Energy Activities which helped the regulation on the relations on the Croatian energy market according to the EU directives for the field of energetics valid in that period.
Energy Law
The Energy Law passed in 2001 regulates measures to ensure a secure and reliable energy supply, efficient power generation and its use, the enforcement of regulations in the energy sector, and regulates carrying out of energy activities based on market principles or pursuant to public service obligation, and other key issues relevant for the energy sector.
The law foresees the development of an Energy Strategy to be passed by the Parliament for a period of ten years. On the basis of the Energy Strategy, National Energy Programs are to be developed. Further, a fund for the financing of the National Energy Programs is to be established. A special section of the Energy Law deals with Energy Efficiency and Renewable Energy Sources, providing for Energy Efficiency Programs.
- Energy Law (PDF, 120kB)
- Law on Gas Market (PDF, 170kB)
- Law on Oil and Oil Derivatives Market (PDF, 170kB)
- Law on Regulation of Energy Activities
- Law on Heat production, distribution and supply
- The Energy Act (OG, 68/01, 177/04 amended)
- The Electricity Market Act (OG, 177/04)
- The Law on Regulation of Energy Activities (OG, 177/04)
Secondary legislation regarding issues related to electricity from renewable energy sources is currently under preparation.
National Energy Programme
The project of a National Energy Program was initiated within PROHES: Program of Development and Organisation of the Croatian Energy Sector. It was launched to develop an energy management framework that will promote clean technologies, shift to fuels with lower carbon contents (natural gas), diversification of energy resources, higher EE&RES utilisation demand side management, energy savings development of energy market and environmental protection.
The following programs have been set up:
- KUENzgrada (Energy efficiency in building construction)
The basic goal of energy efficiency within the program KUENzgrada is the reduction of energy needs during design, construction and utilisation of buildings and settlements, and during the restoration of the existing buildings as well as the creation of suitable microclimatic parameters in areas around the buildings with the decrease of environmental impact. This programme includes the changes of existing legislation, building physics, energy audits in buildings, passive solar architecture, renewable energy sources in buildings, promotion of energy efficiency and pilot projects. - MIEE (Industrial energy efficiency network)
Within the MIEE program, consumers in industry and service sectors, as well as in the public sector are encouraged to increase energy efficiency through an organised structure. The direct communication between large energy consumers, energy producers, expert and consulting bodies, and government institutions has to be enforced. It is also important to involve the consumers in the industry, commercial and public sector as well as to involve the designers in informing campaigns and training programs and in decision making. The Cooperation between scientific and expert institutions from diverse sectors on energy issues and the cooperation with similar institutions and energy programs have to be enlarged. - KOGEN (Cogeneration program)
In cogeneration (KOGEN) the main goal is to promote construction and utilisation of cogeneration plants in all buildings where they are technologically and economically justified. The realisation of this program includes the establishment of a legislative, financial and technological framework for cogeneration plant construction. - KUENcts (Centralised thermal systems’ energy efficiency program)
For centralised thermal systems (KUENcts) in Croatia it is necessary to encourage development and enhancement of centralised thermal systems in areas with a large density of heat consumers or combined electric energy and heat consumers. It is also important to enhance efficiency of the existing systems. Progress can be seen in:- Preparation of a legislative framework for the heat sector and heat tariff development
- Preparation of the Handbook of energy management in CTS (DH/CHP, HOB)
- Realisation of existing pilot projects and establishment of new ones
- Least-cost energy planning for DH systems
- Promotion, education and capacity building
- TRANCRO (Transport energy program).
Energy efficiency in the transportation sector is tried to be increased through different measurements:- "Cost - benefit analysis" of various measures (projects) for sustainable transport system development
- Necessary legislation - measures – subsidies
- Action plan - for Croatian Government
- Pilot projects and marketing
- CROTOK (Croatian Islands energy program)
CROTOK can be seen as the synthesis of all national energy programs and is based on the methodology for regional energy planning in Croatia . Important aspects are the institutional, organizational and expert prerequisites for developing energy system on islands. - BIOEN (Biomass and waste energy use program)
According to the National Energy Sector Development Strategy, the project has shown, that electric energy generation from biomass and waste could meet up to 15 percent of the total primary energy consumption until 2020, which is a realistic assumption when compared to Austria, Finland and Denmark.
BIOEN program includes sub-program BIODIZEL, the goal of which is to develop steady biodiesel production and to spread use of biodiesel in Croatian transport and energy sector.
International cooperation within the BIOEN:
IEA Bioenergy Task 29 (Socio-economics); 6th Framework, INTERREG, CADSES,…; FAO, UNIDO - SUNEN (Solar energy use program)
The program for solar energy use SUNEN has shown that solar energy utilisation combined with LPG and/or natural gas is a technologically and ecologically acceptable solution for the Croatian coastline. The hybrid combination of solar energy, wind energy and LPG can help solve the problem of energy infrastructure on islands and also start the development of traditional island activities with the engagement of local resources in accordance with the strategic development of Croatian islands.
Solar radiation measurements were initiatied:- Multipyranometer Array Measurement of Solar Radiation Components in Zagreb and Split (cooperation with University of Split)
- CARDS National Action Program Croatia 2003 project Assessment of Wind and Solar Energy Resource in a Pilot Croatian Region
- Solar Radiation Atlas of Croatia
- ENWIND (Wind energy use program)
For wind energy utilisation by new generation wind turbines, the program for wind energy use, ENWIND, has been started. The program includes the assumptions for an economical wind energy use. Preliminary wind resource in Croatia estimates 1300 MW and 3 TWh/a, notably on the coast. There doesn’t exist a wind atlas of Croatia but within the program a number of projects are in progress to overcome the lack of data:- Program of continuous wind monitoring in Croatia
- Development of Pre-commercial Wind Turbine
- Assessment of Wind and Solar Energy Resource in Pilot Croatian Region (EC CARDS Program)
There are already a number of commercial wind projects:- Ravne I with 5,95 MW – (in operation)
- Trtar -– Krtolin with 11,8 MW
- Stupisce with 6,3 MW
- Jasenice with 10 MW
- Orlice with 6 MW
- and 40 more with wind measurements
- MAHE (Small hydro plant construction program)
The basic goal of the MAHE program is planning the construction of small power plants, removing all barriers and obtaining conditions for a rapid construction of small power plants in Croatia. Croatia has a long tradition of using hydroelectric power with an estimated potential for small HPPs (<10 MW) of approx. 180 MW, 560 GWh. The environmental and planning constraints significantly reduce the potential. Some pilot projects were implemented through the cooperation with country authorities. A limited commercial interest can be noticed and the highest interest is shown by SHPP’s which is owned by HEP. - GEOEN (Geothermal energy use program).
Geothermal energy use program, GEOEN, has shown the need for the creation of conditions for increasing geothermal energy utilisation in existing installations. Another important matter is the need for carrying out an appropriate and global marketing campaign and making private entrepreneurs and local communities interested in geothermal energy utilisation. - PLINCRO (Gas Network Development Program)
The objective is to establish necessary preconditions for the expansion of the natural gas network
To achieve this, following measurements are important:
Master Plan Development:- transport pipelines
- natural gas storage facilities
- distribution network
Further reading:
Energy Sector Development Strategy
The principal objectives of the energy policy of the Republic of Croatia are stated in the Energy Sector Development Strategy (Official Gazette 38/2002 – summary) which was adopted by the Croatian Parliament in March 2002 for the period of 10 years:
As objectives, the Strategy names:
- Improvement of energy efficiency from the production, transformation, transmission and transport to distribution and consumption of energy, which includes encouraging the process of gas pipeline installation and possibilities of gas usage, and generation of energy outside public networks;
- Safe energy provision and supply, inclusion in the international energy market, ensuring several lines of connection to international networks and provision of energy from several directions for all energy network systems, development of transmission and transport networks, development of distribution networks, observation of safely limitations and state interests;
- Diversification of energy-generating products and sources which includes selection and provison of energy-generated products which will ensure safe supply to the consumers, and spatial arrangement of sources which will ensure the safety of supply of each area;
- Utilisation of renewable sources of energy which will be in accordance with sources, technological development and economic policy as a whole;
- Realistic and market-related prices of energy and development of energy market and enterpreneurship, and privatisation processes in accordance with interestsof the Croatian state, which should encourage energy efficiency and good energy management and anable inclision of Croatia into the European energy market;
- Enviromental protection, which in the energy sector implies the primary action in connection with energy efficiency, renewable sources, choice of energy-generating products and application of state-of-the-art protection technologies, quality legislation and supervision, the public opinion and education and promotion of best practices.
Based on the Energy Sector Development Strategy, the Government of the Republic of Croatia adopts the Programme of Implementation of the Energy Sector Development Strategy. The Programme sets out measures, actors and dynamics of implementation of the energy policy and the national energy programmes, the mode of cooperation with local and regional self-government bodies regarding planning of the development in the energy sector as well as cooperation with energy subjects and international organisations. The Programme of Implementation of the Energy Sector Development Strategy covers the period of at least three years. After the expiry of the period for which the Programme of Implementation of the Energy Sector Development Strategy has been determined, the Government of the Republic of Croatia submits to the Croatian Parliament a report on the implementation of the Energy Sector Development Strategy with proposals for necessary changes.
In the field of Energy Efficiency, the strategy sets up a number of National Energy Programms (see: National Energy Programme), including a provision for efficiency centers to be set up within the National Energy Companies HEP and INA.
The Energy Development Strategy of the Republic of Croatia was adopted in 2002 and a set of regulations was brought between 2002 and 2004 in order to apply the laws that regulate particular energy activities. Simultaneously, the EU rendered a few new directives and documents that regulate the field of energetics and that also contain a few new requirements and instructions.
This was the basic reason for alternation i.e. new version of the following acts at the end of 2004 – Law on Alternations and Supplements to the Energy Act. Electric Energy Market Act and the Act Regulating Energy Activities.
The basic starting points for these new acts are EU directives regarding joint regulations for electricity and natural gas market, promotion of utilisation of electricity produced from renewable energy sources on the electricity market promotion of biofuels and other renewable transport fuels utilisation.
The liberalisation process that has included energy sectors of EU countries has initiated radical changes in organisation and functioning of Croatian energy sector. Restructuring, deregulation, privatisation and competitiveness are processes, which denote institutional, legislative, organisational and all other changes of Croatian energy sector during the last few years. The restructuring of Croatian energy sector is primarily characterised by:
- Introduction of competition in energy production and supply
- Liberalised choice of energy supplier
- The public character of the transmission network/transport system remains under state supervision
- Public character of the network; state or regional community ownership (their supervision is carried out in a way to guarantee equal, non-discriminatory access and competition
- Introduction of an independent national regulator for the energy business (HERA- Croatian energy regulatory agency)
Energy Related Funds and Programmes
Environmental Protection and Energy Efficiency Fund
In 2003, the Ministry of the Economy and the Ministry of Environmental Protection and Physical Planning of the Republic of Croatia, consulted by the Energy Institute Hrvoje Poaar, established the Environmental Protection and Energy Efficiency Fund.
It is a structured extra budgetary fund which finances projects and activities in three areas:
- Environmental protection
- Energy efficiency
- Renewable energy sources
A framework guideline in the form of a study is going to be prepared with the main objectives of gathering the existing information on potential financing areas, to associate available financial mechanisms with projects, to take into account existing financial support mechanisms for energy efficiency and the use of renewable energy sources so that they can adequately supplement the Fund and avoid collision with its financing programmes.
On the 4th February 2005 the Environmental Protection and Energy Efficiency Fund and the Croatian Bank for Reconstruction and Development (HBOR) signed an Interest Rate Subsidy Agreement for loans intended for environmental protection, energy efficiency and renewable energy resources projects.
The Agreement regulates areas of operation as well as terms and conditions for providing support. HBOR will provide expert support and advice for the economic viability assessment and financial monitoring of the above projects and the Fund will provide expert support for the technical viability assessment, implementation monitoring and results verification.
