Key Regulation Without Which Investors in Renewable Energy Cannot Start Projects Is 384 Days Late

For seven years, investors have been waiting for the adoption of legal regulations that would govern the development of renewable energy projects. The regulation that should define the tenders for energy approvals, as the key document without which an investor cannot even start project development, is 384 days late.

Even the new laws from 2021 did not provide the renewable energy sector with the necessary regulatory framework, it was stated at a press briefing organized by the Renewable Energy Association of the Croatian Chamber of Economy (HGK).

Due to the current energy crisis, all European Union countries have acted to accelerate the introduction of renewable energy sources, and in the past year, there has been intensive work on reducing long-lasting administrative procedures, but it seems that Croatia is also lagging behind the rest of Europe, given that, according to Aljoša Pleić, Vice President of the Renewable Energy Association of HGK, Croatia does not even have the necessary regulations to enable investments.

The rules for connecting to the transmission network and the rules for connecting to the distribution network, although drafted, have been waiting for approval from HERA and the Ministry of Economy and Sustainable Development for several months.

Almost five months ago, HERA was supposed to set the connection price to the grid. Without knowing that figure, it is impossible to plan investments, as the connection to the grid constitutes a significant portion of the project development cost. Similarly, changes to the Regulation on the Promotion of Electricity Production from Renewable Energy Sources and High-Efficiency Cogeneration are also awaited.

There Is Capacity, But Not Much Progress

New projects have been completely halted with the enactment of the new Electricity Market Act, and as stated at the briefing, even on private land, it is not possible to develop projects until the long-overdue regulation is adopted.

‒ A lot of time has been lost waiting for regulations, especially in a year when energy independence should be at the top of the priority list. Instead of importing expensive electricity, Croatia could, thanks to its significant renewable energy potential, export and reduce its dependence on fossil fuels ‒ says Ivo Čović, President of the Renewable Energy Association of HGK.

It was highlighted at the briefing that last year, electricity worth 592 million euros was imported from Hungary in eight months, while HEP spent 345 million euros more in just half a year due to a 255 percent increase in electricity prices.

For 600 million euros, 600 MW of new renewable energy facilities could have been built, it was concluded at the briefing. In comparison, Croatia currently has only 140 MW of installed capacity from all solar power plants.

Instead of investing that money in dozens of solar power plants that would enable long-term electricity production, it has been irretrievably spent, says Ivan Strunje, a member of the Council of the Renewable Energy Association of HGK.

In order to accelerate the process of adopting subordinate regulations related to renewable energy, the HGK Renewable Sources Association has decided to monitor the pace of regulatory adoption and the resolution of necessary permits for project development every month and to inform the public through the so-called ‘Traffic Light of Renewable Energy Legislation Functionality’.

The importance of accelerating the entire administrative process was also emphasized at the briefing, where it was stated that 216 requests have been received, of which only 36 have had tenders published for energy renovation.

They state that there is capacity, and Croatia has committed to building two thousand megawatts of energy production capacity by the end of next year. If it fails to meet this commitment, it will no longer have the right to draw funds from EU funds. So far, only 107.5 megawatts have been achieved.