Croatia: HEP Supply still holding major market share vs GEN-I & RWE

, SEE Energy News

HEP Supply is preparing to offer the service of electricity supply in other countries within the region, too, but only when the necessary market preconditions have been created for this. The electricity market in Croatia was opened back in 2008, however, it was only in mid-2013 that a larger number of alternative suppliers entered the market. In spite of the great competition, HEP Supply has preserved the leading role in the supply of electricity to customers, Tina Jakaša, director of HEP Supply stated.

Asked to describe the changes that the process of electricity market opening has brought to HEP, Jakaša says that the electricity market in the Republic of Croatia was fully opened on 1st July 2008, which means that, since then, all consumers have had the legal right to choose their electricity supplier. According to the Law on Electricity Market, today, HEP is the Distribution System Operator (Croat. HEP ODS), a company that performs regulated energy activities and the only energy entity authorised to provide the public services of electricity supply in Croatia, which means that it is obliged to provide the so-called universal service for the buyers from the households category and the guaranteed supply to other end-buyers (entrepreneurs, i.e. legal entities) who have not chosen a supplier or who have been left without one for certain reasons. At this point, it is good to mention that, by adopting new regulations and price calculation methodology (a high service price), the Croatian Energy Regulatory Agency (Croat. HERA) stimulates the buyers who are consumers of guaranteed supply to choose a supplier who provides the supply service under market conditions (market suppliers).

A drastic drop in the wholesale price of electricity enabled alternative suppliers to enter the electricity market in the Republic of Croatia in 2013. The alternative suppliers took an active part in the market in mid-2013 when they took advantage of several factors: the increase in the share of renewable energy resources, the significant participation of hydro energy, the gas price stabilized at a high level, a drop in coal prices and the low price of the CO2 emission fee.

On the basis of the agreement with the Croatian Market Operator, currently, there are 22 registered suppliers on the Croatian electricity market, 19 of which are outside the HEP group, Jakaša stresses.

According to her, regardless of the increasing competition, having been operating on the open market for six years already, HEP Supply is still firmly holding the leading position in electricity supply for the buyers from the entrepreneurship category, and since the beginning of 2013, it has also been present in the Republic of Slovenia. In the household category of buyers, it is still obvious that a large number of buyers decide to use the universal public supply service provided by HEP ODS which is reliable and favourable in terms of price. In the entrepreneurship segment, HEP Supply supplies more than 100.000 buyers. In addition to the entrepreneurship segment, HEP Supply has also made a strong step forward in the households segment, and so, at the end of 2013, it offered a new product called “Happy“ (Croat. „Hepi“) to the citizens. The fact that more than 22.000 agreements have been concluded shows that this is a well-prepared product. One half of these buyers have used the possibility of self-reading and, thus, they are managing their costs on their own.

Asked whether HEP Supply considers taking part in the electricity market in Montenegro, Jakaša explains that HEP Supply is working on the development of additional services and on finding business solutions for their buyers, and that they are also preparing further expansion within the region when the necessary market preconditions have been created for this.

Other suppliers can hardly offer lower electricity prices. In the Energy Board of the Chamber of Commerce, they say that the emergence of new suppliers in Montenegro is a matter of their assessment and business orientation. It should be kept in mind that, at this moment, other suppliers can hardly offer energy at the prices lower than the price from domestic resources, while achieving the desired profit at the same time. In addition, the market size and consumer structure in Montenegro are probably not attractive to big players, i.e. the companies with vast experience on international markets, at least for the time being – it is believed in The Chamber of Commerce. In Croatia, the average price of one kilowatt-hour, taxes included, amounts to around 13.5 cents, whereas, in Montenegro, it amounts to around 10 cents.

error: Content is protected !!