Industry and Technology Department CROATIAN CHAMBER OF ECONOMY

Industry and Technology Department CROATIAN CHAMBER OF ECONOMY (CCE) Energy as the Activity Carrier in Cooperation between Croatian Chamber of Economy and European Organisations Prepared by Kresimir Stih e-mail kstih@hgk. hr Pula, 9 May 2008

CROATIA economic profile 2006 MACROECONOMIC STABILITY • • Population 4. 442 mil. GDP: 34, 220 mil € GDP per capita: 7, 706 € GDP growth: 4. 8% (Q 1 -Q 3 2007: 6. 2%) Industrial output growth: 4. 5% Inflation rate: 3. 2% Unemployment rate: 11. 2% (ILO) Average net salary: 630 € PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

hydro power plants 6, 728. 7 GWh thermal power plants 3, 930. 2 GWh public cogen. plants 1, 875. 4 GWh industrial cogen. plants 471. 9 GWh wind farms 19. 1 GWh other 11. 4 GWh 36, 1% 21, 1% 10, 1% 2, 5% 0, 1% TOTAL NET CONSUMTION 16, 137. 0 GWh 86, 5% PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY HY D R O • • • EXP 8, 313. 1 GWh 44, 5% 2, 690. 9 GWh 14, 4% 13, 036. 7 GWh 69, 9% TH. &COG. IMPORT EXPORT PRODUCTION IMPORT CROATIA electrical energy profile 2006

RES IN EU New EU Directive! Ø Proposal of new EU directive on the promotion of the use of energy from renewable sources: ü Transposition in Member State legislation – latest 31 March 2010 ü Electricity – average 20% of power consumption, different for different Member States – Malta 10%, Sweden 49% ü Share according to reference year (2005), energy consumption and growth, ü Control through annual trajectory check points ü Defines 10% RES in transport ü Restriction to biofuels and biomass according to environmental sustainability criteria ü Greenhouse gas impact ü Guarantees of origin – trading scheme ü Solar restriction – overall efficiency 35% PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES EXPECTATIONS Ø Lowering long term dependence on energy sources – improvement of energy stability & security of supply Ø Energy efficiency and less environment influence of fossil fuels Ø Employment increase, new SMEs in energy sector Ø New technology development PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA possibilities Ø Best options for RES use in Croatia in terms of competitiveness and potential contribution to the national energy balance sheet: ü wind farms and biomass cogeneration for electricity generation ü biomass heat plants and solar thermal collectors for heat production ü liquid biofuels for transport Ø Other RES technologies - geothermal energy for heat, small hydro, geothermal cogeneration and solar PV for electric energy generation PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA legislative Ø Strong activities towards RES legislation, Ø Since July 2007 legislation in conformity with EU directives includes: ü Important statement: “Energy production from RES is interest of Republic of Croatia” ü Definition of RES by category ü Energy share from RES in energy mix till end of 1010 – will not fulfil ü Registration procedures – MINGORP ü Incentive tariff system for energy produced from RES PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA potential Ø WIND POWER ü largest potential ü interest stronger then connection to grid possibilities ü 1 st wind farm 2005 – 5. 8 MW ü 2 nd wind farm 2006 – 12 MW ü 3 rd wind farm under construction – 42 MW PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA potential Ø Solar power: ü Still expensive technology, 1 MW limit for Croatia ü Return of investment approximately 16 years for small objects – contracts limited to 12 years ü Theoretical financial reliability: coastline south from Zadar – PV, north thermal heating and cooling ü Legislation does not recognise small solar power systems (less then 30 k. W) ü Small solar systems (4 in Croatia) – app. 56 k. W capacity ü Today’s PV efficiency – 15% ü Largest Solar power plant – Portugal, 12 MW PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA potential Ø BIOFUELS: ü MODIBIT – Ozalj ü 20, 000 t/year capacity ü Problems: raw material, market ü No incentive for agricultural production in future ü VITREX - Virovitica ü 8, 000 t/year capacity PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA results Ø Legislation opens the race for licence: ü Legal framework – licence requests for more then 1, 500 MW RES For illustration – Croatian electrical energy production capacities: § § § Hydro: 2, 056 MW Thermal: 1, 589 MW Nuclear: 338 MW (50% share NE Krsko, Slovenia) PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES IN CROATIA results Ø Production: ü First wind generator developed and produced in Croatia ü Factory tested, prototype will soon be installed on-site Ø Production to start: ü Semiconductor technology for solar panels Important questions: Ø New jobs: How can RES Ø increase employment? Energy efficiency: Who is going on diet to save money for the food? PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

CROATIAN CHAMBER OF ECONOMY main facts • Established 1852 • More than 70, 000 active members • Umbrella institution of the Croatian business community • 20 County Chambers, 7 Representative Offices abroad, 9 Departments, 6 Centres, 42 Professional Associations • Euro Info Correspondence Centre • BIZNET - Croatian companies database • Business Opportunities Exchange • Information about relevant regulations and laws in the field of economics • Permanent Court of Arbitration and the Conciliation Centre • ISO 9001/2000 PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES ACTIVITIES how did it start? Activities initiated by a group of enthusiasts involved in RES business Beginning - hard work of a group of people ü Studies, promotion, education ü On-site measurements, research ü… 2005 – Established Association for RES ü Over 120 members after the 1 st meeting Members: ü Project developers, investors, companies ü Governmental institutions, policy creators and energy agencies ü Universities, institutes and research laboratories PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

CROATIAN CHAMBER OF ECONOMY Association for RES – structure ASSOCIATION FOR RENEWABLE ENERGY SOURCES (in regular frame of CCE structure) BIOMASS GROUP SMALL HYDRO GROUP BIOFUEL GROUP WIND ENERGY GROUP SOLAR ENERGY GROUP GEOTHERMAL ENERGY GROUP RES EQUIPMENT PRODUCERS GROUP PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES ACTIVITIES common activities Ø Discuss issues related to RES policy, Ø Promotion and education, Ø Analyse the effects of the measures, propose solutions and actively participate in final decisions, Ø Participation in expert teams of competent ministries, Ø Incentives and proposals relating to legislation and business conditions Ø Drafting of special laws and defining specific requirements for an activity Ø EU membership: EWEA, EURELECTRIC Ø WWEA excellent relation – membership expected PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES ACTIVITIES promotion & education Ø Regular annual conference with international participation: ü Wind & Solar – 2006 ü Biomass, biogas & biofuel – 2007 o Next: Energy efficiency & Transport – end 2008 Ø EUROPEAN BUSINESS FORUM ON RENEWABLE ENERGY SOURCES in Cavtat – November 2007: ü 3 plenary sessions, 3 round tables, 1 study trip ü More then 210 participants, 120 from abroad ü Over 40 abstracts More information: www. hgk. hr/ebfres PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

RES ACTIVITIES promotion & education Ø Participation in Inteligent Energy – Europe 2007 as one of the partners to EUROCHAMBRES: ü CHANGE – Energy Efficiency for SMEs ü market monitoring, energy audits and pre-checks and support schemes ü total budget over 2 mil. € ü 17 partners involved Ø Kick-off scheduled for middle September Ø Croatian companies are invited to participate in the programme PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

EURO INFO CORRESPONDANCE CENTRE www. euroinfo. hr Ø All relevant information from EU: ü EU legislative ü EU programmes opened for Croatian participation ü Project partner search ü Public tendering ü Education Ø Relay centres: ü ü ü Dubrovnik Osijek Pula Rijeka Split PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

EURO INFO CENTRE EU projects Ø Application for 128 EU project in different programmes, 3 in preparation for application: ü ü ü ü ü 32 succesfully closed projects 24 active project (in realisation) 24 opened applications 38 rejected project applications 3 in preparation 5 project ideas 3 quit projects 1 abandomed 1 canceled Status on 21 April 2008 PULA – ENERGY INFORMATION DAY – CROATIAN CHAMBER OF ECONOMY

Industry and Technology Department THANK YOU FOR YOUR ATTENTION CROATIAN CHAMBER OF ECONOMY Industry & Technology Department Kresimir Stih e-mail kstih@hgk. hr Ph. +385 (0) 1 4606 758 Fx. +385 (0) 1 4606 737 http: //www. hgk. hr