With a power score of 2.38, Croatia ranks number 5 among emerging markets and number 17 in the global ranking.
- Emerging markets
2.38 / 5
Net-zero goal and strategy
Croatia’s Low-Carbon Development Strategy published in 2021 lays out how emissions can be lowered from 1990 levels under three scenarios – a continuation of existing practices, and a “gradual” and “strong” transition.
Under the gradual transition scenario, the country’s emissions would be reduced by 33.5% by 2030 and 56.8% by 2050. In the strong transition scenario, emissions would be lowered by 36.7% by 2030 and 73.1% by 2050. The strategy says that a net-zero emissions scenario will be presented once the implications of the European Union’s (EU) climate neutrality goal become clear. As a member of the EU, Croatia shares the bloc’s ambition to reach net-zero greenhouse gas emissions by 2050.
Nationally Determined Contributions (NDC)
EU members submit a joint Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC), outlining the bloc’s plan to help achieve the goals of the Paris Agreement. The EU’s initial NDC committed to lower emissions by at least 40% by 2030 compared to 1990 levels. The updated NDC submitted in December 2020 increased the ambition of this target to at least a 55% reduction by 2030.
Fossil fuel phase-out policy
During the COP26 climate summit in November 2021, Croatia announced a 2033 target to phase-out of coal from electricity production.
Croatia is aiming for renewables to account for 36.4% of gross final energy consumption by 2030, up from an estimated 20% in 2020. It also has a target for renewables to account for 63.8% of electricity consumption in 2030, versus 47% in 2020. Currently, around 6% of power is generated from biomass and waste, 10% from coal, 14% from wind, 21% from natural gas, and 48% from hydro.
The country launched its first ever renewables auction in 2020, and a 638-megawatt auction was held in June 2022. The Croatian Energy Market Operator, known as HROTE, intends to hold auctions for renewables at least once a year, and the duration of the potential power purchase agreements with HROTE is 14 years. HROTE conducts auctions for the allocation of market premiums and for the signing of power purchase agreements with a guaranteed purchase price. Annual quotas for individual technologies should ensure market competition and the planned start of power production in new facilities.
Power prices and costs
Electricity prices for Croatian households have historically been among the lowest in the EU.
Electricity in Croatia can be traded in two types of wholesale markets: the Croatian power exchange (CROPEX) and also bilateral over-the-counter contracts. Most electricity is traded through the bilateral market.
HROTE pays incentives to generate electricity from renewable energy sources. These payments are funded by a 1.36 euro cents per kilowatt-hour (1.32 US cents/kWh) renewables incentive fee paid by all Croatian electricity consumers. There is a premium for projects larger than 500 kilowatts (kW) of installed power and an incentive through a guaranteed redemption price for projects up to 500kW. This refers to both a guaranteed reference price and a feed-in premium.
There are numerous privately owned companies active in Croatia’s power generation market, but they are dwarfed by state-owned utility Hrvatska Elektroprivreda, known as HEP.
HOPS is the sole electricity transmission system operator. While it is owned by HROTE, it has functioned as a separate entity since 2005.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
The Croatian government does not plan to phase out a number of specific fossil-fuel subsidies, such as excise duty exemptions, in order to protect the competitiveness or economic viability of various sectors. There is no national taxation to increase the cost of fossil fuels used in thermal power plants, but the country participates in the EU’s carbon market, known as the Emissions Trading System.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
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