Feed-in tariff (Sustav poticanja zajamčenom otkupnom cijenom)

Updated: 31.01.2017

Author: Stefan Ćetković

Since 1 January 2016, renewable energy in Croatia is promoted through an incentive in the form of a guaranteed purchase price ("zajamčena otkupna cijena") after undergoing a tendering process.

Until 31.12.2015 renewable energies were supported through a 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 came into force and introduced tenders, which offer guaranteed purchase prices for electricity produced in RES installations with a capacity of up to 30 kW.

Privileged producers ("povlašteni proizvođač", Art. 20 RES Act) of electricity from renewable energy sources have the right to the guaranteed purchase price, 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, if quotas for the support of certain technologies of renewable energies are available (Art. 34 § 1 and 2 RES Act).

A Rulebook on Renewable Energy Sources will determine the specific conditions for public tendering, the eligible technologies, details on the Register of renewable energy producers, the conditions of acquiring the status of privileged producer and the support scheme of premium tariffs as such. This Rulebook has not been adopted yet (As of December 2016). 

Eligible technologies

The eligible installation must not exceed a capacity of 30 kW (Art. 33 § 1 RES Act). The classification of power plants by technology and source of energy, for which public tenders will be carried out, will be governed by a special Rulebook on RES (Art. 6 § 3 and Art. 25 RES Act). 
As of December 2016, this Rulebook has not yet been adopted. 

Amount

The amount of the guaranteed purchase price for the delivered net electricity is determined in the decision of the HROTE, which selects the lowest bidder in the public tender. Basically, the guaranteed purchase price does not change for the duration of the contract between the installation owner and the HROTE. However, the guaranteed purchase price of electric energy will be adjusted every year in relation to the established corrected guaranteed purchase price of electric energy from the previous year by applying the average annual consumer price index (Art. 35 § 6 RES Act).
The maximum guaranteed purchase price of electric energy will be determined by the HROTE based on the methodology of guaranteed purchase prices of electricity, which will be governed by a special Rulebook on RES (Art. 35 § 3 and Art. 25 RES Act).
As of December 2016, this Rulebook has not yet been adopted. 

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 proizvožač"; Art. 19 § 8 RES Act).

In order to be eligible to the tender, the power plant shall meet several requirements listed in Art. 20 § 1 of the RES Act, including the following:

  • The production of electricity of the power plant is only from RES or waste 
  • The plant received a building permit
  • The grid connection point is 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). If the construction of the power plant is realised in stages, pursuant to Art. 21 § 3 RES Act in connection with conditions, which will be specified in the Rulebook on RES, HERA can also issue a partial decision on the grant of the status of a privileged producer. This allows the investor in certain cases to bid for tenders, although the installation of the power plant is not finished yet. 

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 the HROTE will carry out, if the quota for the respective technology is available (cf. Art. 34 RES Act). The lowest bidding applicants will be selected by the HROTE through a decision and this project holder thereby acquires the right to enter into a contract with the Market Operator.

A Rulebook on Renewable Energy Sources will determine the specific conditions for the acquisition of the status of privileged producer and for public tendering, such as deadlines, the tender procedure and the content of public calls (Art. 34 § 5 and Art. 25 RES Act).

As of December 2016, this Rulebook has not yet been adopted.

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.

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. This Decree has not been adopted yet.

Eligibility period

The duration of the contract will be determined by the Rulebook on RES.

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 decision (Art. 41 § 3 RES Act).

This Decision has not been issued yet. However, Art. 54 § 2 RES Act provides that the existing RES Fee Decree (Official Gazette, 128/13) is valid until a decree pursuant to Art. 41 § 3 is in force.

The fee currently (2016) amounts to HRK 0.035 (€ct 0.46) per kWh (Art. 5 § 1 RES Fee Decree).

Croatia

Further information