Croatia - Country Commercial Guide
Renewable Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-16

Overview

According to Eurostat, gross primary energy consumption in Croatia in 2019 was 8.2 million tons of oil equivalent (TOE), final energy consumption in Croatia in 2019 was 6.9 million TOE. Renewable energies account for approximately 28.5% of Croatia’s energy mix. Croatia imports about 52.9% of the total energy consumed annually: 80% of its oil needs, 67% of its gas, 32.5 % of its electricity, and 100% of its coal needs. The country has great potential to decrease energy imports by increasing use of renewable resources. 

In February 2020, the Croatian government adopted a new Energy Strategy for the period until 2030, with an outlook through 2050. The Strategy includes a wide range of energy policy initiatives that will improve energy security, increase energy efficiency, lower dependence on fossil fuels, increase local production and increase renewable resources. The Strategy predicts that renewable energy resources as a share of total energy consumption will grow to 36.4% in 2030, and to 65.6% in 2050. The government intends to spend about $1.4 billion on grid modernization, with a goal of increasing renewable energy source connections by at least 800 MW by 2026 and 2,500 MW by 2030.  

In May 2020, the Croatian government adopted a proposal to incentivize the production of electricity from renewable energy sources and high-efficiency cogeneration, introducing a premium model. According to the association Renewable Energy Sources of Croatia, the premiums will trigger $2 billion in investments in Croatia.

The Croatian energy regulatory framework and strategy are fully aligned with the European Union. In early 2019, the government adjusted the regulatory framework to develop a smart grid that would enable small-scale units operated by households or businesses to sell their surplus electricity to the grid, based on a sustainable business model. 

Leading Sub-Sectors

Electricity price for household consumers in 2019 was 0,1321 EUR per kWh, among the lowest in EU (the EU average is 0,2159 EUR per kWh). For non-households it was 0.1034 EUR per kWh, again lower than the average EU of 0.1251 EUR per kWh. Please see Energy in Croatia publication for more information.

While there are fifteen active electricity suppliers in Croatia, the state-owned Croatian Electricity Company (HEP) is still the key market player. Since Croatia joined the EU, the Croatian Electric Energy Transmission Operator (HOPS) operates as a state-owned company, independent from HEP. These companies will play an important role in the development of Distributed Energy Resources (DER) in Croatia. According to recent analysis prepared by The Boston Consulting Group (BCG), a U.S. based global management consulting firm, local DER are mostly limited to reselling imported solar heating equipment to households and businesses, with little local production. Only a few DER suppliers offer integrated solutions with cost-benefit analysis, permit acquisition, installation, and maintenance. Almost no one offers full end-to-end services including financing, an insurance package, local network integration, and energy trading. However, there are several local companies preparing to launch such full-service business models in the coming years.

According to BCG, Croatia has great potential for solar energy usage in the form of DER. Croatia has one of the highest amounts of solar radiation in Europe (3.4-5.2 kWh/m2day), but one of the lowest photovoltaic capacity per capita (12 Wp — lower than Sweden and 40 times lower than Germany). The largest opportunity lies along the Croatian coast that is flooded by tourists who overload the local infrastructure capacity during the summer (in 2019, 18.3 million foreign tourists visited Croatia – a country of 4 million inhabitants).

Opportunities

According to BCG, the following are the seven key technologies that are needed to support the development of DER in Croatia:

  • Battery Storage: Captures electricity for use at a later time
  • Photovoltaic: PV panels for conversion of sunlight to electricity
  • Combined Heat & Power: CH&P plants with various feedstocks
  • Energy Efficiency: A way of managing and restraining the growth of energy consumption
  • EMS/VPP (Environmental Management System/Voluntary Protection Program): A digital ecosystem of hardware, software, and services for monitoring and controlling the energy flow
  • Demand Response: Services that help better match the power demand with supply
  • Grid Integration and Grid Enhancing Technologies: Solutions that help integrate DER into the grid

Resources

  • · Ministry of Environmental Protection and Energy
  • · Croatian Electricity Company
  • · Croatian Electric Energy Transmission Operator
  • · Croatian Energy Regulatory Agency
  • · Croatian Energy Market Operator
  • · Energy Institute Hrvoje Pozar
  • · The Environmental Protection and Energy Efficiency Fund
  • · Renewable Energy Sources of Croatia

U.S. Embassy - U.S. Commercial Service
Zdravko Kuzmic, Commercial Specialist
Zagreb, Croatia
Tel:  +385 (0)1 661 2090
Email: Zdravko.Kuzmic@trade.gov
Website: /www.trade.gov/croatia