Janaf Enters Solar Power at a Time When They Are Becoming Less Profitable

Janaf’s entry into the production of electricity from renewable sources may not be well-timed given the current market prices, experts in green energy suggest. The company announced on Tuesday that through its affiliated company Janaf OIE, it has acquired a 100% stake in Solar Energy Vođinci. This company is developing the SE Vođinci near Vinkovci with an installed capacity of 14.3 MW and a connection capacity of 9.99 MW. The project is in the construction start phase, with building permits obtained, and is expected to commence operations on March 1 of next year.

Who is the seller?

The previous owner of Sun Energy Vođinci was Toni-Rudolf Vlaić, a respected entrepreneur in domestic renewable energy circles. Vlaić – according to media reports, a returnee from Germany originally from the Šibenik area – is the director of El Sun Energy, which is part of the Turkish group Elin, a large manufacturer of photovoltaic panels. According to data from the website, El Sun Energy has so far realized four solar power plants in Croatia. Of these, three are on land: SE Velim, SE Kosore-Jug, and SE Stankovci, while SE Bikarac is installed on a roof. In addition to El Sun, the court register connects Vlaić with several other companies in the green energy segment – besides leading the local branch of Elin Elektrika, he is the founder and director of Sun Energy Lozovac, Sun Energy Kistanje, and Sun Energy Polača. These three companies were established during 2021.

SE Lozovac is planned to be built in the southern part of Šibenik-Knin County, about eight kilometers northeast of Šibenik, in close proximity to the entrance to Krka National Park. According to the report, the construction of the power plant is planned on predominantly agricultural land, and the area designated for the placement of photovoltaic modules, transformer station platforms, and auxiliary buildings is just under seven hectares. The total area that this project will cover is nearly 20 hectares.

However, during 2021 and 2022, the construction of the power plant faced strong opposition from the residents of Lozovac, primarily due to its location right at the entrance to the National Park. Due to the potential negative impact on natural habitats, the previous Ministry of Economy and Sustainable Development requested Sun Energy Lozovac to conduct an environmental impact assessment procedure at the end of April 2022.

The same procedure was requested by the relevant ministry for SE Kistanje, with an installed capacity of up to 9.99 MW, which would be located about 500 meters northeast of the village of Kistanje, also in Šibenik-Knin County. In the village of Polača in Zadar County, the construction of a solar power plant with a total installed capacity of 14.55 MW and a connection capacity of up to 10 MW is planned. The power plant will cover a total of 18 hectares. We were unable to determine the status of these projects from Toni-Rudolf Vlaić as he did not respond to calls and messages.

Millions of euros in cash

Regarding Janaf’s acquisition of the project in Vođinci, the announcement did not disclose the value of the transaction, and a response to the inquiry regarding this question, as well as how much the construction of the power plant will cost by the conclusion of this text, did not come from Janaf. Energy experts we spoke with informally say that the realization of this investment is logical given Janaf’s internal energy needs, but also its significant investment potential. Namely, last year, this state operator of the oil pipeline system concluded with 124 million euros in cash on its balance sheet.

The company’s leading figures stated in the announcement that the acquisition of the solar power project is the first tangible result of Janaf’s new strategic direction towards green transformation. – Without neglecting the security of supply for Central Europe and neighboring countries with energy resources, we will continue to develop the renewable energy business segment, so that Janaf becomes a respectable player in the Croatian electricity market – said Stjepan Adanić, CEO of JANAF.

Board member Vladislav Veselica emphasized that this is just the first such investment as Janaf is currently considering a number of other greenfield and mature projects of this type at various stages of business activities. So far, Janaf has realized integrated solar power projects at its terminals in Sisak, Žitnjak, and Omišalj, and unintegrated solar power plants are being prepared at locations in Slavonski Brod, Omišalj, and Žitnjak in Zagreb.

However, sources from Lider informally claim that they are not sure how profitable investment in solar power plants is today, if we are talking about electricity production for the market. Namely, data from the Croatian electricity exchange CROPEX shows that there is currently a negative price that reaches up to 100 euros per MWh, charged from 10 AM to 6 PM. In other words, since solar power plants produce electricity while there is daylight, a good portion of daily production results in losses.

– Solar has reached its profitability limit and is currently unprofitable unless battery systems are considered in parallel – claims an energy expert who wished to remain anonymous. According to his assessment, investors in renewable energy sources should find wind power plants more interesting today as they are in ‘counterflow’ with solar power plants – producing more electricity at night and during the winter period, unlike solar plants which are most productive during the day and in summer.