Croatia: EU membership and power market harmonization influences electricity power gen investments

28. June 2013. / SEE Energy News

Projects that are paying investment back quickly need to be invested in.

Croatia Operator of gas transport system Plinacro has already launched the process of certification in accordance with demands of the Third EU Energy Package while HEP will do this during couple of weeks- it is said on the conference “Government Energy Police”-implementation. 16 EU countries has launched certification procedure in the segment of electricity and gas and 11 countries haven’t done that yet at all so far- Advisor of HERA, Eraldo Banovac, said. Ivana Markovic, Director of Technology Management Sector in Plinacro, said that Plinacro is in good position with reference to certification process because it is legally separated from Ina since 2002. She stressed about energy safety that made stimulations show that system is capable to provide stable gas supply in great occasions even without gas interconnection with Hungary.

President of HEP’s Administration, Tomislav Seric, said that factory won’t prevent market liberalization although existing bylaw acts are not harmonized with household segment still. Replacement of supplier will be possible every first day in month because HEP will do great electricity consumption measuring. Dejan Ljustina from PWC warned on experience in Croatian telecom sector where was proved that price decrease has brought factory into position not to have solution to invest in development. He added that liberalization of energy sector brings to GDP’s fall so existing energy import 24 billion HRK worth ruins GDP by 7 or 8%. Seric answered that HEP will invest 2,4 billion HRK in regulated activities and that 20% of electricity from imports is wanted to be replaced with new, more effective capacities and projects. “If we choose projects which have good investment payback, we won’t have any difficulties”, he concluded.

When it comes to renewable energy sources, 300 more MW from RES will enter the company during the next two years. The Chief of Energy Sector in MINGO, Kristina Celic said that it can’t handle that with existing height of stimulation. Director of HROTE, Ivor Zupanic, stressed that HROTE is lacking 85 HRK and contracts for facilities 330 MW strength are signed. “If we reconsider that electricity at market is 50 EUR per MWH, we should consider that we are paying 348 EUR per MWH of stimulus to solar plants. According to the old tariff system, we have paid more than 500 EUR per MWH. Investment in Dalmatija will be paid back in four years, in Madjimrje for six years maximally and contracts for energy buyout are being signed to 14 years’ period. “I am asking you, how will we pay for it?” Zupanic asked. Vjeran Pirsic from Eco Kvarner said that procedure for RES in Croatia is extremely bureaucratic so there is no obstacle in the system for gaining 50 MW from the sun while more than 60% of hotels on the coast prepare hot water from fuel oil. “Use of this potential is test of government intelligence”, he concluded. Gordana Sekulic from Janaf said that factory is working on the project of Janaf-Adria which is very interesting for EU and supply safety because it guarantees oil purchase in Hungary, Slovakia and Czech Republic and creation of oil transmission line will be enabled from Adriatic direction even to Baltic countries.

Source;Conference coverage report/Serbia Energy SEE desk

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