Premium tariff (Sustav poticanja tržišnom premijom)
Updated: 07.02.2019
Author: Stefan Ćetković
Since 1 January 2016, renewable energy in Croatia is mainly promoted through a premium tariff ("tržišna premija") allocated through public tenders.
Until 31.12.2015 renewable energies were supported through a fixed feed-in tariff pursuant to the (now obsolete) Tariff System for Electricity Production from Renewable Energy Sources and Combined Heat Power (Tarifni sustav za proizvodnju električne energije iz obnovljivih izvora energije i kogeneracije). On 1 January 2016, the new Act on Renewable Energy Sources and High-efficiency Cogeneration (RES Act) came into force and introduced a tendering procedure through which a premium tariff and a guaranteed feed-in tariff for installations of less than 500 kW are allocated.
Privileged producers ("povlašteni proizvođač" Art. 20 RES Act) of electricity from renewable energy sources can receive a premium on top of the price of the electricity, which they have sold on the market pursuant to the Electricity Market Act (Art. 30 § 4 RES Act), if the Croatian Energy Market Operator (HROTE) has selected them as lowest bidder in a public tender The Market Operator issues a call for tenders at least once a year, provided quotas for the support of certain technologies of renewable energies are available (Art. 31 § 1 and 2 RES Act; Art. 5 RES Promotion Decree).).
Further by-laws are expected to be adopted by mid-2019 which should make the implementation of the support scheme operational in practice. These by-laws should lay out the details on the Register of renewable energy producers, the conditions of acquiring the status of privileged producer and the quotas for different renewable energy technologies.
Eligible technologies
The classification of power plants by technology, source of energy and capacity, for which public tenders will be carried out is specified in the RES Promotion Decree (Art. 4 § 1 RES Promotion Decree).
Amount
The amount of the premium tariff (Tržišna premija - TPi), which is expressed in HRK/kWh, results from subtracting the reference market price (referentna tržišna cijena - TCi) in the accounting period from the reference value of electric energy (referentna vrijednost električne energije- RV), which was defined in the contract between HROTE and the privileged producer, who was selected in a public tender.
Therefore, the formula for the calculation of the amount can be shown as follows:
TPi = RV - TCi
In case the calculated value of the premium tariff is negative, the amount of the premium tariff equals zero.
The reference value of electric energy will be adjusted every year in relation to the established corrected reference value of electric energy from the previous year by applying the average annual consumer price index.
The amount of the maximum reference value of electric energy will be determined by HROTE based on the methodology of reference values of electricity defined in the RES Promotion Decree.
Addressees
Eligible party: Producers of electricity from renewable energy sources, who gained the status of privileged producer (Art. 20 RES Act) and won as lowest bidder on the public tender.
Obligated party: The Croatian Energy Market Operator (HROTE) issues the call for public tenders, selects the lowest bidder through a decision (Art. 31 § 3 RES Act) and concludes the contract with the privileged producer.
Procedure
Process flow | As a precondition for being eligible for this support scheme, the plant operator as natural or legal person needs to acquire the status of a privileged producer ("povlašteni proizvođač"; Art. 19 § 8 RES Act). In order to be eligible to the tender, the power plant shall meet several requirements listed in Art. 6 of the RES Promotion Decree, including the following: - Energy permit (except for integrated roof-top solar PV)
- Connection permit
- Written confirmation about the ownership over the land where the project is expected to be built
Once all criteria have been fulfilled, the Croatian Energy Regulatory Agency (Hrvatska energetska regulatorna agencija - HERA) will issue a favourable decision on the application for the grant of the status of a privileged producer (Art. 21 RES Act). After granting the status of privileged producer, HERA will include the applicant into the Register of Renewable Energy Sources, Combined Heat and Power and Privileged Producers ("Registar obnovljivih izvora energije i kogeneracije te povlaštenih proizvođača") and note therein every future change of the status (Art. 21 § 6 RES Act). In order to conclude a contract with the Croatian Energy Market Operator (HROTE) the privileged producer needs to take part in a public tender, which HROTE will carry out, if the quota for the respective technology is available (cf. Art. 31 RES Act). All participants in the tender must submit the financial deposit in the amount of HRK 50 (approx. EUR 7) per kW of the planned capacity of the proposed project. The deposit will be given back to the applicant if the project is not successful in the tender or the applicant withdraws from participating in the tender (Art. 7 RES Promotion Decree). The successful applicants in the tender must submit the financial guarantee in the amount of HRK 300 (approx. EUR 40) per kW of the planned capacity of the proposed project. |
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Competent authority | The Croatian Energy Market Operator (Hrvatski Operator Tržišta Energije - HROTE) and the Croatian Energy Regulatory Agency (Hrvatska energetska regulatorna agencija - HERA) are the competent authorities. |
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Degression
The tariff system does not include a degression system.
Cap
Pursuant to Art. 28 of the RES Act the government will issue a special decree on the determination of quotas for the promotion of electricity production from renewable energy sources for the period from 2016 to 2020. As of December 2018, this Decree has not yet been adopted.
Eligibility period
The duration of the contract is 12 years (Art. 15 RES Promotion Decree).
Distribution of costs
| Consumers | The support scheme is funded by a fee that is charged on each kWh purchased by the final consumers. The amount of the fee is determined by the government through a decree (Art. 41 § 3 RES Act).
According to the RES FEE Decree which entered into force on 1 September 2017, the fee amounts to HRK 0.105 (€ 0.01) per kWh (§ 3 RES Fee Decree). For the electricity consumers which are subject to greenhouse gas emission allowances, the fee amounts to HRK 0.007 (less than € 0,01).
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Croatia