1. Ministry of Economy, Labour and Entrepreneurship STORIES project workshop RES and Energy Storage in Current and new Croatian Energy Legislation Igor Raguzin, Head Renewable Energy & Energy Efficiency Department SDEWES, Dubrovnik, 2 October 2009 1

2. Ministry of Economy, Labour and Entrepreneurship Total primary energy supply in Croatia 2 Primary energy production in 2006 were 208,76 PJ, while total primary energy supply were 410,56 PJ  import! Obnovljivi izvori - Renewables 0,06% Tekuća goriva - Liquid fuels 45,1% Ogrjevno drvo - Fuel wood 3,7% Ugljen i koks - Coal and coke 7,7% Električna energija - Electricity 4,9% Vodne snage - Hydro power 14,2% Prirodni plin - Natural gas 24,3%

3. Ministry of Economy, Labour and Entrepreneurship Energy sector change: an overview 3 1994 - Energy Sector Development and Organisation Program 1997 - National Energy Programs-NEP (7 energy efficiency programs + 5 renewable energy programs) 1998 – Draft Strategy of Energy Sector Development 2000 - Concept of Energy Sector Reform 2001 - Energy Laws (Energy Law, Law on Regulating Energy Activities, Electricity Energy Market Law, Oil and Oil Derivates Market Law, Gas Market Law) 2002 - New Energy Strategy-Croatia in 21 Century 2003 - Fund for Environmental Protection and Energy Efficiency 2004/7 - Amendments to Energy Legislation 2007 - New secondary legislation for Renewable Energy Sources

4. Ministry of Economy, Labour and Entrepreneurship Croatian RES policy 4 Programs, measures projects 1.Governmental 2.Regional/local self- government 3.National energy programmes Economic instruments 1.Fund for Environmental Protection and Energy Efficiency 2.State aids 3.Special EU&inerntl. projects: CARDS, IPA, CIP/IEE, GEF- UNDP-WB, CBRD Regulatory framework 1.Directive 2001/77/EC on the promotion of electricity produced of electricity produced from RES in the internal electricity market 2.Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport 3.Directive 2009/28/EC 2020 RES target 20% RENEWABLE ENERGY SOURCES

5. Ministry of Economy, Labour and Entrepreneurship 5 Ministry of Economy, Labour and Entrepreneurship www.mingorp.hr monitors implementation and compliance with set targets for RES and CHP www.mingorp.hr Environmental Protection and Energy Efficiency Fund www.fzoeu.hr financing preparation, implementation and development of programs, projects and similar undertakings in the field of RES and EE www.fzoeu.hr Croatian Energy Regulatory Agency www.hera.hrwww.hera.hr responsible for granting energy permits and granting the status of eligible producers Croatian Energy Market Operator www.hrote.hrwww.hrote.hr responsible for the collection and distribution of incentives and concluding contracts on buy-out of electricity with eligible producers that realised the right to incentives The System Operator www.hep.hr/ops, www.hep.hr/ods responsible for connecting and taking deliveries of electricity from RES and CHPwww.hep.hr/opswww.hep.hr/ods Competent authority RES

6. Ministry of Economy, Labour and Entrepreneurship BIO FUELS 6 Directorate for Energy and Mining

7. Ministry of Economy, Labour and Entrepreneurship 7 The Energy Act The Regulation on the Minimum Share of Electricity Produced from RES and CHP whose Production is Incentivized The Tariff System for the Production of Electricity from RES and CHP Pravilnik za stjecanje statusa PP-a električne energije The Electricity Market Act The Act on the Regulation of District Heating Ordinance on the Use of RES and CHP The Ordinance on Privileged Status - H PSTE The Regulatio n on Minimum Share PSTE The Regulation on Fees for Promoting Electricity Production from RES and CHP OG 33/07 i OG 67/07 1 July 2007 came in force The Ordinance on measures to encourage use of biofuels The Regulation of encouraging biofuel production The decision on the amount of compensation to encourage biofuel production RES: Legislative framework The Act on Biofuels for Transport

8. Ministry of Economy, Labour and Entrepreneurship Tariff system for the production of electricity from RES and cogeneration  determine the producer's right to an incentive price payable by the market operator (feed-in tariffs)  tariff elements for cost calculation of electricity from RES and cogeneration plants  the type of resource  power and other elements of supplied energy  means and conditions for application of these elements  based on justified operation costs, maintenance costs, replacement, construction or reconstruction of RES as well as other costs  energy prices for each RES and cogeneration technology set by application of tariff systems  application of tariff systems supervised by CERA 8

9. Ministry of Economy, Labour and Entrepreneurship 9 Feed-in tarrifs for RES-E PV <10kW PV 10kW-30kW PV >30kW HPP < 5000 MWh/g HPP 5000-15000 MWh/g HPP >15000 MWh/g WIND POWER BIOMAS FOREST/AGRO BIOMAS WOOD PR. IND. GEOEN BIOGAS BIOFUEL LANDFILL GAS OTHER RES 0,05,010,015,020,025,030,035,040,045,0 <1MW>1MWPPC c€/kWh 0,01 kn/kWh charge for LSGU Limitation PV 1 MW

10. Ministry of Economy, Labour and Entrepreneurship 10 MARKET OPERATOR Payment for energy supplied from RES Mechanism for collection and distribution of incentives ) Payment (cash flow) Privileged producer which uses RES within the incentive RES privileged producers within the incentive system Customer s Retail Supplier Payment of additional amount for incentive other Possible other sources of incentives Billing Payment for energy supplied RES increased by incentive Billing for energy supplied from RES Billing energy supplied from RES CERA - Croatian Energy Regulatory Agency MONITORING RES-E: Institutional framework

11. Ministry of Economy, Labour and Entrepreneurship Ordinance on the use of RES and cogeneration  RES to be used for energy production  conditions and possibilities for their use (type, technology) including  authorisation, planning, design and construction of plants  registry of RES and cogeneration projects  other issues of importance  Classification of plants/technologies using RES, particular rights and commitments of privileged producer stipulated  REGISTRY of projects and plants for use RES and high efficiency cogeneration and of privileged producers  benefits of RES 11

12. Ministry of Economy, Labour and Entrepreneurship 12 Actual status according to RES 379 request http://www.mingorp.hr/UserDocsImages/Tablica_OIEK.xls

13. Ministry of Economy, Labour and Entrepreneurship Administrative procedure - case 13 Overlap: 4. Project holders, 8. Projects, 12. Request overlaps

14. Ministry of Economy, Labour and Entrepreneurship 14 Registry RES: locations of wind plants (dvelopment)

15. Ministry of Economy, Labour and Entrepreneurship Registry of projects and plants for use of RES and CHP as excellent tool for sustainable energy 15

16. Ministry of Economy, Labour and Entrepreneurship 16 Economic instruments for RES EE

17. Ministry of Economy, Labour and Entrepreneurship Fund’s investments in the EE and RES projects (2004 – February 2009) No. of projectsmilion EUR Improvement of energy efficiency21817.63 Utilisation of renewable energy sources6910.26 Sustainable building423.39 Cleaner transport60.29 Energy audits and demonstration activities1180.50 Educational, research and development studies 681.19 Other programs and projects52.94 TOTAL EE and RES PROJECTS52636.20

18. Ministry of Economy, Labour and Entrepreneurship  In November 2007, the Government of Croatia adopted:  LPG Utilisation Strategy and Program on Croatian Islands (2008-2012)  This supports utilisation of environmentally and energy preferable fuel replacement of fuel oil on Croatian islands  The programme budget of 4.8 million EUR  Fund is partly co-financing project documentation, civil works (UNP storage connection) and LPG or LPG-Solar energy instalation in the house: 500 households (100 households per year 2008-2012) Grant of 3.800 EUR per project Promotion of LPG and solar energy utilisation on Croatian islands

19. Ministry of Economy, Labour and Entrepreneurship 19 Structure of RES targets in 2020 Directive on the promotion of the use RES 2009/28/EC 23 April 2009 RES in Croatia was 12.58% in 2005 7.27% from hydropower - 5.28% from biomass and 0.03% Calculation of the share of energy from RES, overall target for Croatia equals 20.02% of RES in gross final energy consumption in 2020 This presents 1.9329 mtoe

20. Ministry of Economy, Labour and Entrepreneurship 20 Structure of RES targets in 2020

21. Ministry of Economy, Labour and Entrepreneurship Further activities Removal of the remaining key barriers within RES autorisation procedures and “repair” the related RES-E sub-laws Development and enactment of the secondary legislation and incentives for RES to heating/cooling systems: solar thermal, biomass/pellet boiler, heat pumps Analysis and consideration of incorporation into Croatian legal system of the Tariffs for energy storage (within technical assistance from GEF/WB project ) as well as special subsidy scheme by EEEP Fund Enhancing administrative and institutional capacity in field of EE and RES, in particular in the Ministry Development of guarantee of origin and green certificates scheme Promotion and education, increase of public awareness 21

22. Ministry of Economy, Labour and Entrepreneurship Further activities Consideration and application results of the STORIES project especially in the context of the socio economic aspects to the specific location (islands, remote regions) support the development of demonstration projects of storage technologies for increasing the penetration of intermittent energy sources (RES) according to case studies: 1.the Island of Mljet – desalination STORIES project 2.The island of Vis – sustainable Solar Hydroelectric Power Plant (model PV power plant 40.5MW, reservoir 20 hm3, 100 ha, depths 20 m) 3.The Dalmatia region – wind-pumped storage hybrid ystem in power grid 22

23. Ministry of Economy, Labour and Entrepreneurship Further information 23 Tel: +385 1 6106713 Fax:+385 1 6109113 E-mail: igor.raguzin@mingorp.hrigor.raguzin@mingorp.hr www.mingorp.hr Thank you for your attention !