Monday, 17 October 2022

Could Offshore Wind Facilities See Croatia Become Electricity Exporter?

October the 17th, 2022 - Might Croatia become an established and successful electricity exporter with the proper development of offshore wind facilities?

As Poslovni Dnevnik writes, engulfed in the ongoing fear of rising electricity and gas prices, people are increasingly turning to greener, sustainable alternatives. Interest in solar energy is increasing across the country, which has been well and truly confirmed by HEP's data on the matter, as they are being overwhelmed by requests for solar power and household connections to said power source.

In the first six months of last year, there were only 295 requests of that nature, while in the same period this year, that number was a staggering six times higher. By the end of August 2022, almost 2,900 power plants had been installed, of which 1,540 were installed this year alone, reports HRT. Thirteen solar panels on the a roof with three households drawing power from them will be enough, homeowners hope, to slash their bills in half.

''We expect that the power plant will produce approximately 5,000 KWh per year, and in that case we'd actually manage to achieve significant savings on the level of electricity consumption. The system itself should pay for itself in five to six years," says Zoran Kordic, the manager and co-founder of the Green Energy Cooperative.

The number of Croatian households opting for solar power plants is constantly growing, and there are currently a little over 2,800 of them. "We have one solar factory in Croatia, which currently cannot cover all the needs we expect in the coming years. This is a great opportunity for Croatia to invest in this direction as well,'' said Vjeka Ercegovac from the economic interest association Renewable Energy Sources of Croatia.

"The problem is that we don't have enough staff. The number of companies installing solar panels on roofs just isn't enough for the Croatian market, and whoever gets involved in that market will do a good job," says Neven Duic, a professor at the Faculty of Mechanical Engineering and Shipbuilding in Zagreb.

In addition, the "eternal" problem is this country's ridiculous and painfully slow administration. The connection to HEP's network is what people are typically waiting for the longest. "We have situations where people wait for six months. So, when the installation is already up, and you have to wait six months for the connection, these are situations that absolutely must not be permitted to happen,'' stated Kordic.

HEP also stated that there is a delay in resolving people's requests due to the great interest in this people suddenly have. "The increased interest people are having in solar panels, and thus the enormous increase in the number of requests for connections, is the result of the current energy crisis and the rise in the prices of energy and energy products, as well as tax incentives for the purchase and installation of photovoltaic panels," reads a HEP press release on the topic.

Everything is going in the direction of the Republic of Croatia being 100 percent renewable and self-sufficient when it comes to energy. It is precisely for this reason that the possibility of exploiting offshore wind in northern Adriatic waters is being very seriously considered. It would be, if it ever comes to fruition, a floating wind farm.

"It would theoretically produce 10 kWh of wind, which would be enough not only for Croatian needs, but also for exporting it elsewhere. So, with the development of offshore wind facilities, Croatia could become an exporter of electricity," said Duic. Due to the climatic conditions here in Croatia, Professor Duic believes that, in addition to electricity, we could also export green hydrogen, which could replace fossil fuels.

"Green" and independent

There is no shortage of positive experiences when it comes to savings made thanks to solar panels on your own roof. Igor Balazinec's house has been lit up for two years thanks to his own solar power panels, and the investment should pay for itself in a mere four years. They decided on this move, he says, in order to be "green", independent and to have zero electricity bills.

For more, make sure to keep up with our dedicated news section.

Wednesday, 4 May 2022

Finance and Economy Ministries Working on Securing Energy Products

ZAGREB, 4 May 2022 - Finance Minister Zdravko Marić said on Wednesday that the ministries of finance and economy had been working together to ensure secure supplies of oil, gas, electricity and other energy products.

"We have been doing that for some time. We have been affected by rising prices but we have the obligation to secure adequate and quality supplies," he said when asked about the announcement that the government would make sure the underground gas storage facility Okoli was filled, the cost of which, according to reporters, was estimated at billions of kuna.

Noting that it was necessary to be prepared for all possible circumstances and possible additional changes and deteriorated circumstances such as those in the past few weeks and months, Marić said that the model that was being worked on would certainly have some repercussions for the state budget considering energy prices, mentioning in that context gas and its higher purchase price.

"Naturally it is not in our interest for HEP (power supplier) and others to suffer losses and have problems. That is where we come in and we will take everything into consideration," he said without going into detail, adding that the model would be presented once it was finalised.

Brodosplit is a serious issue

Answering questions about the situation in the Split-based shipyard Brodosplit, Marić said that that topic was being taken seriously. "I recently said clearly that we have never turned our backs on any situation of that kind and we will not do so now. However, for something to be realised, preconditions need to be fulfilled first," he added.

At one moment, the impression was created that such situations can be resolved exclusively with a loan from the Croatian Bank for Reconstruction and Development (HBOR) and a state guarantee, Marić said, reiterating that state guarantees are taxpayers' money and that it was necessary "to take all the circumstances and preparations into consideration as well as what follows after that."

"Let the experts at HBOR obtain all the important information just like they would for any other loan for a potential client... so we can get a guarantee that the business model will continue to be tenable," said Marić.

The Brodosplit shipyard recently applied for pre-bankruptcy proceedings due to €60 million in loans from the Russian-owned VTB Europe Bank that were to be used for the construction of two ships, however, due to sanctions against Russia the dock's accounts are currently blocked.

For more, make sure to check out our dedicated politics section.

Friday, 1 April 2022

Prvo Plinarsko Društvo Has So Far Not Received Request for Payments in Roubles, Deliveries Normal

ZAGREB, 1 April (2022) - Croatian natural gas distributor PPD has so far not received a request from its Russian partner to make payments in roubles, the company told Hina on Friday.

"PPD has so far not received a request from out supplier, Gazprom Export, to change the contractual provisions. Deliveries are running smoothly and PPD is meeting all its obligations towards all its buyers," the company said.

PPD said that the security of supply was its "absolute priority" and that it was ensuring the security of supply thanks to all its suppliers. 

Russian President Vladimir Putin said on Thursday he had signed a decree requiring foreign buyers to pay for Russian natural gas in roubles from 1 April.

Foreign buyers from countries deemed hostile would have to open a special account with Gazprombank, otherwise gas deliveries would be suspended.

"If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either - that is, existing contracts will be stopped," the Russian president said.

For more, check out our politics section.

Friday, 11 March 2022

Energy Prices Will Have to be Capped Globally, Plenković Says

ZAGREB, 11 March 2022 - The EU proved to be part of the solution in the COVID crisis and will have to react also in the new situation after Russia's invasion of Ukraine, by capping energy prices among other things, including globally to prevent speculation, Croatian Prime Minister Andrej Plenković said on Friday.

"After the Russian invasion, we have three tragedies, the biggest is the one of the Ukrainian people, the second is the big refugee crisis, and the third is the enormous rise in energy prices," he said in Versailles after a two-day informal EU summit.

The EU proved to be very good in dealing with the pandemic crisis by establishing the special Next Generation EU instrument and through common vaccine procurement and distribution as well as job-retention, Plenković said.

"Now it's necessary to help our fellow citizens and the economy again. It's best to cap energy prices, but this must be a global action. It's not good if someone profits from speculative prices, that's immoral."

Energy and food cannot be treated as other commodities, Plenković said. "We have entered a new phase after Russia's attack on Ukraine in which energy and food will be our strategic resources and we should adapt to that."

He said the countries taking in the largest numbers of Ukrainian refugees would need financial aid as a huge refugee wave could be expected.

In just two weeks, over two million people from Ukraine have arrived in the EU, while about a million people came during the 2015 refugee crisis.

For more, check out our politics section.

Saturday, 19 February 2022

How Will Inflation Measures Affect Average Croatian Household Budget?

February the 19th, 2022 - With rising energy costs, with a particular emphasis being placed on fuel and gas continuing to pose issues to both business owners and average citizens alike, just how will government inflation measures really affect the average Croatian household budget?

As Poslovni Dnevnik writes, after the government presented its inflation measures to attempt to mitigate the impact on people's standards, the country's residents, especially those who use natural gas for their heating, have begun to calculate precisely how much each of these measures will have an impact on the average Croatian household budget.

It should be noted that the government has decided to lower the VAT on gas from 25 down to just five percent, and that will be the case from April the 1st this year to March the 31st next year. After that period, gas and heat will remain permanently at the VAT rate of 13 percent, meaning that they will both be equated with the costs of electricity. In addition, the government will subsidise the price of gas to all households, with direct support of 10 lipa per kilowatt-hour, or about 20 percent of the projected price of 66 euros per megawatt-hour. The measure related to this subsidy will cost 600 million kuna.

Guided by this data, Glas Slavonije/The Voice of Slavonia writes that when it comes to gas, it would have been as much as 76 percent more expensive as of April the 1st, but with these recently revealed government measures, this increase will amount to a maximum of 20 percent, depending on stock market prices.

The average family in Croatia now pays 4,950 kuna a year for gas. Without any government intervention, this annual cost would increase by a worrying 3,762 kuna, meaning that the average Croatian household budget would need to allocate a much higher 8,712 kuna or 726 kuna per month for gas. Only by lowering the VAT rate from 25 percent down to five percent would bills grow by 48 percent, or by 2,376 kuna, and with a direct subsidy to households, the increase would be up to 20 percent. This means that as of April the 1st, the average Croatian household budget will have to allocate up to 990 kuna more for gas, or 82.50 kuna more per month.

For more, check out our dedicated lifestyle section.

Tuesday, 8 February 2022

As Croatian Fuel Prices Soar, Minister Tomislav Coric Talks Intervention

February the 8th, 2022 - Fuel prices are rising once again and Economy Minister Tomislav Coric has promised that the state will intervene as the situation continues to unfold.

As Poslovni Dnevnik writes, recently, a session of the Economic and Social Council was held, after which, Minister Tomislav Coric spoke in a statement to the media about the procurement and prices of natural gas, as reported by N1.

He commented on the rise in fuek prices, stating that nobody could have expected such a jump and that the current situation could not have been predicted.

Asked if time had shown that they had made a mistake in choosing a methodology such as the one chosen back in 2016, Minister Tomislav Coric said no, because no one could have predicted the current situation: "Changing the methodology at this time won't result in anything."

He said he couldn't say at this time exactly how much fuel prices would would continue to rise. "I saw in the media that it was 30 percent. The logic is that we'll have to find funds for that, at the expense of the state budget. If the thesis about the 30 percent increase is correct, it's equal to about 55-56 million kuna more,'' he said.

He reiterated that Croatia and the world is currently in a phase of a huge shock to both fuel and oil prices.

Asked whether or not the Croatian Government had already submitted a request for a review of the arbitration for the INA-MOL shareholder agreement, he said: ''Tomorrow is the deadline for that and the government will react within the deadline. Everything is ready, such requests are usually submitted on the last day of the deadline.''

He touched on Damir Vandjelic's accusation that the governments acted to the detriment of INA and didn't react when necessary. He said that he cooperated correctly with Vandjelic when he was a member of the INA Supervisory Board.

"From the things he'd been saying, it seemed to me that he's been questioning the actions and reactions and processes in the Republic of Croatia and is thus slowly becoming politically engaged, even though he's been politically inactive all the time. I welcome his political moment and place his comments in the context of his political engagement.''

For more, check out our dedicated politics section.

Friday, 4 February 2022

Croatian Energy Investment: New EU Plan to Inject 6 Billion Euros

February the 4th, 2022 - Croatian energy investment with a European Union (EU) plan to pump in a massive 6 billion euros is attracting a lot of talk among those in the sector.

As Poslovni Dnevnik/Darko Bicak writes, as announced back at the end of last year, the European Union recently presented a plan which, despite being controversial for some, will consider new investments in nuclear energy and gas thermal power plants. On top of that, it will make infrastructure environmentally sustainable, ie green, which means that it will be facilitated institutionally through EU funds and private investments in such projects.

The supplementary delegated act on the taxonomy of climate sustainable activities to mitigate and adapt to climate change, which covers certain energy activities in the gas and nuclear sectors, is particularly interesting for Croatia and Croatian energy investment because there are several projects that could be financed directly from EU funds on that basis.

First of all, we can look at the second block of the Krsko Nuclear Power Plant, which is primarily planned to be built by the neighbouring Slovenes, for which the first permits were issued last year. Croatia is not indifferent to the project and is likely to participate in it. The Krsko NPP was built back in 1983 and it has remained unchanged to this day. It represents an investment, as well as maintenance and the distribution of energy in equal proportions between the two neighbouring nations of Slovenia and Croatia.

Although there are no details about that yet, it is certain that such a model would be applied to Block 2. The estimated cost of the project is between six and 10 billion US dollars, according to green activists in the wider region who oppose expanding nuclear capacity in Krsko and point out that it is, in addition to being dangerous and archaic, too expensive and unprofitable in regard to technology.

It is interesting that most of the opposition to the upgrade of Krsko comes from Austria, where there is a common position of politicians, as well as from the public and activists that this project must be prevented at all costs. Over more recent years, Croatia has invested heavily in gas infrastructure, and a similar trend is expected in the coming period. The LNG project on Krk proved to be important and functional, as an example. All energy experts have warned for the past 20 years, as far as this project is concerned, that LNG gas is too expensive and unprofitable compared to natural gas coming through gas pipelines.

That being said, they also didn't deny that this is a strategic infrastructure project that will give Croatia and the wider region, through energy diversification, much greater geopolitical power in the event of a political or energy crisis in Eastern Europe or the Middle East. A certain level of instability in the Middle East has become a normal situation for several decades now, and trade and energy flows have learned to "live" with it. The current crisis between Russia and Ukraine has been going on for about ten years, and it has recently escalated again, so the possibility of a war that could range from a low-intensity hybrid conflict through a spatially and temporally limited armed conflict to something continental and of global proportions is something we don't even want to think about at the moment.

Gas prices have risen from about 30 US dollars per megawatt (MWh) to almost 100 dollars. Recently, gas on the reference European gas exchange TTF in the Netherlands was just under 80 dollars. Therefore, it is clear that the existing floating LNG, worth a massive 234 million euros, of which the EU gave Croatia 100 million, has already justified its existence today and the authorities are probably already planning the second phase of the project - building a fixed terminal on the coast and increasing the existing capacities of 2.6 billion cubic metres of gas per year. It appears that Croatian energy investment isn't going to stop there, either.

Croatia has turned almost all of its city heating plants, mostly owned by HEP, into gas power plants, and although the authorities have been pretending over more recent years that the Plomin C project doesn't actually exist, nor has it ever existed, it is increasingly likely that, with its originally planned coal technology, it will also be constructed as a large gas power plant, perhaps on LNG given that this thermal power plant has its own port for docking ships, either for unloading coal, or in the future on LNG.

Additionally, a plan of a private investment in a hybrid gas thermal power plant in Slavonski Brod with a total capacity of 500 MW and an estimated investment value of 420 million euros has been operational for about fifteen years now. Only the listed projects in half of NPP Krsko, the fixed LNG terminal, Plomin C and TPP Slavonski Brod total almost six billion euros and it is clear that the new and green EU classification of nuclear and gas technology will have a great positive effect on Croatia and Croatian energy investment as time goes on.

The presented EU proposal will have to be studied by national governments in the coming period, and before it is officially adopted. The fact is that the EU has 27 member states and that each of them has its own energy strategy and position on the positive or negative effects of a certain form of energy, but the EU has come to this in such a way that one or several countries cannot veto the decision. The EU's plan will be rejected only if 20 member states oppose it, and it is already clear that countries like the Netherlands and Denmark don't want gas involved in the Green Plan, because they use it less and less and sometimes even reject it, while on the other hand, gas is of existential importance for Germany.

The nuclear lobbies in the EU are led by France and the Czech Republic, which are the loudest of them all, and aren't typically opposed by many other countries, which have both realised that they will NOT ensure their energy independence for many years to come. Many green associations and institutions, on the other hand, warn that it will be a step backwards because it will make it difficult and stop many renewable energy projects and give the public the so-called Greenwashing, or a false notion which convinces the public that the products, goals and policies of this plan are environmentally friendly.

The Ministry of the Economy and Sustainable Development pointed out that the Republic of Croatia, in accordance with the stated policy and its strategic documents in the field of energy, "Energy Development Strategy of the Republic of Croatia until 2030 with a view to 2050" and the “Integrated National Energy and Climate Plan for the Republic of Croatia”, encourages the development of renewable energy sources and the strengthening of energy efficiency.

"In this policy, we can see a number of opportunities for the Croatian economy, especially in the development of new technologies dedicated to renewable energy sources. In order to ensure further economic development, as well as a sustainable transition to clean and climate-neutral technologies, we believe that the inclusion of investments related to natural gas and nuclear energy can have a positive effect on the decarbonisation processes. Of course, all of the above must be dedicated to the ultimate goal of decarbonisation, both of the energy sector and of the economy as a whole,'' said the aforementioned ministry, headed by Minister Tomislav Coric.

For more on Croatian energy investment, check out our politics section.

Monday, 11 October 2021

Croatia Among EU Member States Calling for Stronger Shift to Nuclear Energy

ZAGREB, 11 Oct 2021 - Croatia is among ten EU member states that have signed an initiative for a stronger EU shift to nuclear energy as an effective way of combating climate change and for decarbonization of the economy, government said on its website on Monday.

To win the fight for climate, we need nuclear energy. For all of us that is a key and reliable tool for a low carbon future, says the declaration titled Why Europeans Need Nuclear Energy, signed on behalf of Croatia by the Minister of Finance, Zdravko Marić, and the Minister of Economy and Sustainable Development, Tomislav Ćorić.

In addition to Croatia, the initiative was signed by Bulgaria, Czechia, Finland, France, Hungary, Poland, Romania, Slovakia, and Slovenia.

Nuclear energy is a clean, safe, independent, and competitive low-carbon source of energy which gives Europeans a chance to continue developing a strong value-added industry, creating thousands of skilled jobs, strengthening leadership in environmental protection, and ensuring strategic autonomy and energy self-sufficiency for Europe, the signatories said.

They cited the prediction made by the Intergovernmental Panel on Climate Change in its latest report that the goal of limiting global warming to up to 2°C this century would never be achieved unless greenhouse gas emissions were considerably reduced in the next eight years.

They also noted that the rise in energy prices has shown how important it is to reduce energy dependence on third countries as soon as possible. Problems with supply will become increasingly common, so Europe has no choice but to diversify its supply chain and make sure it does not increase its dependence on energy imports from outside Europe, they added.

Nuclear energy is safe and innovative and must be part of the solution

Decarbonization requires immediate and deep transitions in our production and consumer activities so that we make them less carbon-intensive. This implies mass electrification of our use and development of a low-carbon industry such as hydrogen, which also requires electricity production, the declaration says, stressing that nuclear energy must be part of the solution.

Although renewable energy sources play a key role in our energy transition, we also need other emissions-free energy sources to meet our needs at a sufficient and constant level. Nuclear energy is necessary. It already makes up half of the European carbon-free energy production, the declaration says.

The document notes that nuclear energy is a key affordable, stable, and independent source of energy and that this is so primarily because it protects European consumers from price volatility, given that now we are facing high prices of natural gas, and because it evidently contributes to the independence of our energy and electricity supplies.

This is affordable carbon-free energy that can deliver a large amount of competitive electricity without increasing our dependence on electricity supplies from third countries, the declaration says, adding that the European nuclear industry is a global leader and that its development could generate more than a million highly skilled jobs in Europe in the near future.

Increasing cooperation between the member states will lead to the construction of new modern reactors, such as small modular reactors, the document says.

It concludes by saying that nuclear energy should be treated equally as all other low-carbon energy sources and included in the European taxonomy framework before the end of this year and that there is no scientific evidence showing that nuclear energy is less climate-friendly than any other energy source included in taxonomy.

For more about politics in Croatia, follow TCN's dedicated page.