Ministry of Economy Labour and Entrepreneurship STORIES project

Ministry of Economy, Labour and Entrepreneurship STORIES project workshop RES and Energy Storage in Current and new Croatian Energy Legislation Igor Raguzin, Head Renewable Energy & Energy Efficiency Department SDEWES, Dubrovnik, 2 October 2009 Ministry of Economy, Labour and Entrepreneurship 1

Total primary energy supply in Croatia Primary energy production in 2006 were 208, 76 PJ, while total primary energy supply were 410, 56 PJ import! Obnovljivi izvori - Renewables 0, 06% Ugljen i koks - Coal and coke Električna energija - Electricity 7, 7% 4, 9% Ogrjevno drvo - Fuel wood Vodne snage - Hydro power 3, 7% 14, 2% Tekuća goriva - Liquid fu 45, 1% Prirodni plin - Natural gas 24, 3% Ministry of Economy, Labour and Entrepreneurship 2

Energy sector change: an overview 1994 - Energy Sector Development and Organisation Program 1997 - National Energy Programs-NEP (7 energy efficiency programs + 5 renewable energy programs) 1998 – Draft Strategy of Energy Sector Development 2000 - Concept of Energy Sector Reform 2001 - Energy Laws (Energy Law, Law on Regulating Energy Activities, Electricity Energy Market Law, Oil and Oil Derivates Market Law, Gas Market Law) 2002 - New Energy Strategy-Croatia in 21 Century 2003 - Fund for Environmental Protection and Energy Efficiency 2004/7 - Amendments to Energy Legislation 2007 - New secondary legislation for Renewable Energy Sources Ministry of Economy, Labour and Entrepreneurship 3

Croatian RES policy Regulatory framework 1. 2. 3. Economic RENEWABLE Directive 2001/77/EC on the promotion of ENERGY electricity produced SOURCES of electricity produced from RES in the internal electricity market Directive 2003/30/EC Programs, measures on the promotion of projects the use of biofuels 1. Governmental or other renewable 2. Regional/local selffuels for transport government Directive 2009/28/EC 3. National energy programmes 2020 RES target 20% instruments 1. Fund for Environmental Protection and Energy Efficiency 2. State aids 3. Special EU&inerntl. Ministry of Economy, Labour and Entrepreneurship projects: CARDS, IPA, CIP/IEE, GEFUNDP-WB, CBRD 4

Competent authority RES Ministry of Economy, Labour and Entrepreneurship www. mingorp. hr monitors implementation and compliance with set targets for RES and CHP Environmental Protection and Energy Efficiency Fund www. fzoeu. hr financing preparation, implementation and development of programs, projects and similar undertakings in the field of RES and EE Croatian Energy Regulatory Agency www. hera. hr responsible for granting energy permits and granting the status of eligible producers Croatian Energy Market Operator www. hrote. hr responsible for the collection and distribution of incentives and concluding contracts on buy-out of electricity with eligible producers that realised the right to incentives The System Operator www. hep. hr/ops, www. hep. hr/ods responsible for connecting and taking deliveries of electricity from RES and CHP Ministry of Economy, Labour and Entrepreneurship 5

Directorate for Energy and Mining Director Energy Department Energy System EU and restructu ring Renewable Energy & Energy Efficiency Department RES EE BIO FUELS Strategic Planning and Energy Balance Department Energy Balance, Review and Market Ministry of Economy, Labour and Entrepreneurship Common Activities and International Cooperation 6

RES: Legislative framework The Energy Act The Tariff System for the Production of Electricity from RES and CHP Ordinance on the Use of RES and CHP The Electricity Market Act The Regulation on the Minimum Share of Electricity Produced from RES and CHP whose Production is Incentivized Pravilnik za stjecanje statusa PP-a električne energije The Act on the Regulation of District Heating The Act on Biofuels for Transport The Ordinance on measures to encourage use of biofuels The Ordinance on Privileged Status - H PSTE The Regulatio n on Minimum Share PSTE The Regulation of encouraging biofuel production The decision on the amount of compensation to encourage biofuel production The Regulation on Fees for Promoting Electricity Production from RES and CHP OG 33/07 i OG 67/07 1 July 2007 came in force 7 Ministry of Economy, Labour and Entrepreneurship

Tariff system for the production of electricity from RES and cogeneration Ø determine the producer's right to an incentive price payable by the market operator (feed-in tariffs) Ø tariff elements for cost calculation of electricity from RES and cogeneration plants Ø the type of resource Ø power and other elements of supplied energy Ø means and conditions for application of these elements Ø based on justified operation costs, maintenance costs, replacement, construction or reconstruction of RES as well as other costs Ø energy prices for each RES and cogeneration technology set by application of tariff systems Ø application of tariff systems supervised by CERA Ministry of Economy, Labour and Entrepreneurship 8

Feed-in tarrifs for RES-E <1 MW >1 MW PPC PV <10 k. W PV 10 k. W-30 k. W Limitation PV 1 MW PV >30 k. W HPP < 5000 MWh/g HPP 5000 -15000 MWh/g HPP >15000 MWh/g WIND POWER 0, 01 kn/k. Wh charge for LSGU BIOMAS FOREST/AGRO BIOMAS WOOD PR. IND. GEOEN BIOGAS BIOFUEL LANDFILL GAS OTHER RES c€/k. Wh 0, 0 5, 0 10, 0 15, 0 20, 0 25, 0 30, 0 35, 0 40, 0 45, 0 Ministry of Economy, Labour and Entrepreneurship 9

RES-E: Institutional framework Possible other sources of incentives MARKET OPERATOR Mechanism for collection and distribution of incentives Billing energy supplied from RES Payment of additional amount for incentive Payment for energy supplied from RES Billing for energy supplied from RES privileged producers within the incentive Payment for energy system supplied RES increased by incentive CERA - Croatian Energy Regulatory Agency MONITORING Retail Supplier Billing Payment (cash flow) Privileged producer which uses RES within the incentive Customer s Ministry of Economy, Labour and Entrepreneurship 10

Ordinance on the use of RES and cogeneration ØRES to be used for energy production Øconditions and possibilities for their use (type, technology) including Øauthorisation, planning, design and construction of plants Øregistry of RES and cogeneration projects Øother issues of importance ØClassification of plants/technologies using RES, particular rights and commitments of privileged producer stipulated ØREGISTRY of projects and plants for use RES and high efficiency cogeneration and of privileged producers Øbenefits of RES Ministry of Economy, Labour and Entrepreneurship 11

Actual status according to RES 379 request http: //www. mingorp. hr/User. Docs. Images/Tablica_OIEK. xls Ministry of Economy, Labour and Entrepreneurship 12

Administrative procedure - case Overlap: 4. Project holders, 8. Projects, 12. Request overlaps Ministry of Economy, Labour and Entrepreneurship 13

Registry RES: locations of wind plants (dvelopment) 14 Ministry of Economy, Labour and Entrepreneurship

Registry of projects and plants for use of RES and CHP as excellent tool for sustainable energy business community consumer community monitoring reporting for EU regional and local self-government REGISTRY OF RES&CHPE/T/B focal point for policy for RES&CHP national authorities companies institucion (scientific, educational ect. ) media public development agencies spatial planing Ministry of Economy, Labour and Entrepreneurship 15

Economic instruments for RES EE Ministry of Economy, Labour and Entrepreneurship 16

Fund’s investments in the EE and RES projects (2004 – February 2009) No. of projects milion EUR Improvement of energy efficiency 218 17. 63 Utilisation of renewable energy sources 69 10. 26 Sustainable building 42 3. 39 Cleaner transport 6 0. 29 Energy audits and demonstration activities 118 0. 50 Educational, research and development studies 68 1. 19 Other programs and projects 5 2. 94 526 36. 20 TOTAL EE and RES PROJECTS Ministry of Economy, Labour and Entrepreneurship

Promotion of LPG and solar energy utilisation on Croatian Ø In November 2007, the Government of Croatia adopted: islands Ø LPG Utilisation Strategy and Program on Croatian Islands (2008 -2012) Ø This supports utilisation of environmentally and energy preferable fuel replacement of fuel oil on Croatian islands Ø The programme budget of 4. 8 million EUR Ø Fund is partly co-financing project documentation, civil works (UNP storage connection) and LPG or LPG-Solar energy instalation in the house: 500 households (100 households per year 2008 -2012) Grant of 3. 800 EUR per project Ministry of Economy, Labour and Entrepreneurship

Structure of RES targets in 2020 • Directive on the promotion of the use RES 2009/28/EC 23 April 2009 • RES in Croatia was 12. 58% in 2005 • 7. 27% from hydropower - 5. 28% from biomass and 0. 03% Calculation of the share of energy from RES, overall target for Croatia equals 20. 02% of RES in gross final energy consumption in 2020 • This presents 1. 9329 mtoe Ministry of Economy, Labour and Entrepreneurship 19

Structure of RES targets in 2020 Ministry of Economy, Labour and Entrepreneurship 20

Further activities • Removal of the remaining key barriers within RES autorisation procedures and “repair” the related RES-E sub-laws • Development and enactment of the secondary legislation and incentives for RES to heating/cooling systems: solar thermal, biomass/pellet boiler, heat pumps • Analysis and consideration of incorporation into Croatian legal system of the Tariffs for energy storage (within technical assistance from GEF/WB project) as well as special subsidy scheme by EEEP Fund • Enhancing administrative and institutional capacity in field of EE and RES, in particular in the Ministry • Development of guarantee of origin and green certificates scheme • Promotion and education, increase of public awareness Ministry of Economy, Labour and Entrepreneurship 21

Further activities • • 1. 2. 3. Consideration and application results of the STORIES project especially in the context of the socio economic aspects to the specific location (islands, remote regions) support the development of demonstration projects of storage technologies for increasing the penetration of intermittent energy sources (RES) according to case studies: the Island of Mljet – desalination STORIES project The island of Vis – sustainable Solar Hydroelectric Power Plant (model PV power plant 40. 5 MW, reservoir 20 hm 3, 100 ha, depths 20 m) The Dalmatia region – wind-pumped storage hybrid ystem in power grid Ministry of Economy, Labour and Entrepreneurship 22

Thank you for your attention ! Further information Tel: +385 1 6106713 Fax: +385 1 6109113 E-mail: igor. raguzin@mingorp. hr www. mingorp. hr Ministry of Economy, Labour and Entrepreneurship 23