The Energy Development of Croatia Will Be Based on New and Clean Technologies

The concept of energy development in Croatia must be based on new and clean technologies, innovations, and research to contribute to improving the quality of life for citizens and ensuring the necessary transformation of the economy, Prime Minister Andrej Plenković emphasized on Tuesday.

A significant boost to economic and social progress and recovery will also be provided by European funds secured through the EU’s new generation mechanism, which finances measures aimed at mitigating the economic consequences of the pandemic, as well as through the multiannual financial framework, i.e., the EU budget for the period 2021-2027. For Croatia, this is significant due to the fact that we have managed to secure 24.5 billion euros, or more than 189 billion kuna, the Prime Minister said at the digital energy conference "Energy 2021. Managing the Green Transition," organized by Hanza Media.

He also recalled that the Recovery and Resilience Mechanism is expected to provide a total of almost 9.6 billion euros, of which about six billion euros are grants, with an additional possibility of using favorable loans, if needed, amounting to about 3.6 billion euros.

Another major source of EU assistance is the funds from the EU’s regional policy funds for the period 2021-2027, from which Croatia has around 9.15 billion euros at its disposal.

"The significance of these funds is illustrated by the fact that they account for over 16 percent of last year’s GDP of Croatia, which is the highest share compared to all other EU countries," the Prime Minister emphasized.

He stressed that the funds secured and those that will be secured in the next ten years will be a driver of accelerated development and strengthening the resilience of the Croatian economy through accelerated digitalization, the adoption of new technologies, and especially through the green transition. In implementing these reforms and transformations, we will be guided by the National Development Strategy, which will be discussed and adopted in the Croatian Parliament this week, he announced.

The Prime Minister also stated that Croatia, thanks to its existing hydropower potential and the capacities of wind and solar power plants, meets about 29 percent of its energy needs from renewable sources, thus exceeding the targets of the Europe 2020 strategy regarding the share of energy from renewable sources.

"Our goals are to improve and optimize the transmission and distribution network of electricity, enable the use of new capacities of renewable energy sources, motivate the development of innovative energy storage solutions, and encourage further development of biofuels, and we will advocate for the continuation of the electrification of transport, along with the introduction of hydrogen as a new and different form of alternative fuel," Plenković emphasized.

He also mentioned the LNG terminal on the island of Krk, which began commercial operations on January 1, 2021, with the announcement that it will be officially opened this Friday. In the first three years, the LNG capacity utilization is 100 percent, and by 2027, it is 84 percent, which confirms its not only business but also geostrategic significance, the Prime Minister believes.

He highlighted that in the upcoming period, energy renovation of buildings will be particularly encouraged, taking into account the consequences of the devastating earthquakes in Croatia in 2020.

"We will direct funds into several components, among which we will emphasize the green transition, into which, according to the rules of the Recovery and Resilience Mechanism, at least 37 percent of funds must be invested. We will prioritize those economic sectors and industries that will enable our economy to be more developed, resilient, and competitive tomorrow, in line with the policy of green and digital transformation. This will ensure citizens and the economy more accessible, cleaner, and cheaper energy while preserving our natural resources," concluded the Prime Minister.

The Minister of Economy and Sustainable Development, Tomislav Ćorić, stated that Croatia, like all European economies, is moving towards the transition of the energy system. However, the challenges of this transition are numerous, and different parts of the energy system cope with these challenges differently, especially the most traditional ones. Croatia is, at least regarding the state company, HEP, fully oriented towards the transition, i.e., renewable energy sources, he emphasized.

"We have strategically defined ourselves clearly, but the challenge is in creating a network that can absorb all of this together," said Ćorić, who singled out the construction of an electricity distribution network with sufficient capacity to accommodate all these quantities of energy and solving the problem of peak load among the challenges of the transition from conventional to renewable energy sources.

He reminded that Croatia has committed to climate neutrality by 2050, but that a certain retention of hydrocarbons is something that is inevitable.

The President of the Management Board of HEP, Frane Barbarić, emphasized that HEP restored electricity to almost 85 percent of households within the first 24 hours after the Banija earthquake. In the earthquake, nearly 150,000 households were left without electricity, and 238 transformer stations were damaged, Barbarić recalled, announcing that total investments by HEP this year will amount to four billion kuna.

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