Overview

According to Eurostat, gross primary energy consumption in Croatia in 2020 was 9.02 Terrawatt hours (TWh) and final energy consumption was 7.52 TWh. 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 the 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.  

The Croatian energy regulatory framework and strategy are fully aligned with the European Union. Since 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. 

In 2021, electricity price for household consumers was 0.1022 euros per kWh, while EU average is 0.1515 euros per kWh. For non-households in 2021 it was 0.0998 euros per kWh, while the EU average was 0.1032 euros. Croatia has one of the lowest electricity prices per kWh amongst the EU countries.

Leading Sub-Sectors

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 2021, despite the pandemic, 13.8 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: https://www.trade.gov/croatia