We can confidently say that the long-term energy future of Croatia is determined by renewable energy sources. However the energy transition from fossil fuels to renewable energy sources is not yet complete. Due to the tectonic shifts experienced by the energy and public sectors in recent months, the question is how quickly this transformation will be realized. The pandemic and the drop in oil prices have drastically reduced the investment capabilities of energy companies in new energy sources. On the other hand, the public sector had to significantly incur debt to prevent a healthcare crisis and an economic collapse. This will certainly affect the ability to subsidize investments in new energy sources and the development of new technologies.
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Tectonic shifts are currently occurring in the energy sector, particularly in the oil industry, which has significantly begun investing in renewable sources and new technologies in recent years. Due to economic development before the crisis, there was a high demand for oil, and knowing that fossil fuels are coming to an end, the oil industry began to transform, and since it had sufficient funds, renewable energy sources became a secure target. However, due to the drastic drop in demand for oil and the price of oil itself, the investment capacity of the oil sector has drastically fallen, and according to BCG’s expectations, a quick return of oil demand to 2019 levels is not anticipated. The rest of the energy sector has been further affected by the decline in demand and the purchasing power of consumers, which means that traditional electricity companies will also have a greater focus on restructuring their operations. The public sector, on the other hand, had to significantly incur debt to preserve employment and avoid a deeper economic and social crisis. It will certainly need to undergo significant restructuring to reduce public spending, raising the question of how much states will be able to subsidize new energy sources.
