Croatia pulls plug on PV licenses

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Croatia’s energy market operator has confirmed that it will not provide new licenses in 2015 for solar projects, leaving the PV future in this sunny country looking depressingly cloudy.

Luxor Solar, the German solar modules manufacturer headquartered in Stuttgart, announced last week that it will build a 360 KW green-field solar park in Croatia in the spring "before the relevant license becomes invalid". At the end of last year, Luxor Solar added, it also installed another project of similar size that is going to “be among the last of its kind in Croatia as green-field systems will no longer receive sufficient support in this sunny country,” the company said.

Luxor Solar is not alone. International and domestic investors holding licenses for PV installations in Croatia are currently rushing to build them before they expire.

PV license freeze

In January, Croatia’s Energy Market Operator (HROTE) announced that in 2015 it will not continue to enter into power purchase agreements (PPAs) under the country’s feed-in tariff (FIT) system for solar and wind power plants. This, HROTE said, is because the current FIT system does allow the grid to build upon installed power capacity with these types of plants.

In 2014, HROTE added, quotas for solar energy were achieved, so HROTE will reject all subsequently submitted applications for contracts for buying energy from solar power plants.

In contrast, HROTE said it will continue in 2015 to purchase electricity from biomass, biogas and cogeneration renewable energy plants.

Energy market operator’s secret plans?

There is, however, a discrepancy between HROTE’s arguments and the country’s national renewable energy targets.

In December, Ana Sra?i?, business secretary at the Croatian Energy Regulatory Agency (HERA), told pv magazine that Croatia’s National Renewable Energy Action Plan envisages 52 MW of solar PV by 2020. According to information gathered by pv magazine, the same plan targets 1.2 GW of wind capacity.

According to HROTE’s latest statistics, until January 9 the country had installed 339.25 MW of wind, 33.275 MW of solar PV, 12.135 MW of biogas, 7.69 MW of biomass and 1.48 MW of small hydro power.

Sra?i? also told pv magazine that "in 2013, Croatian power plants produced 33% of electricity from fossil fuels, 4% from wind and 63% from [large] hydro. Solar power and biomass still have a pretty negligible share in the overall mix, but both have been growing rapidly over the last few years."

At the end of 2012, Croatia had installed a tiny 89.72 KW of solar PV capacity and a generous 141 MW of wind. It is entirely possible that, upon seeing the rapid growth of the solar PV and wind markets, HROTE decided to freeze them. The emerging question now is how long this freeze is going to last. Does HROTE have a secret plan to open the market again later under a different set of tariffs?

Croatia’s solar target is not totally analogous of the country’s solar resource. The annual mean solar insolation of the horizontal plane in Croatia varies between 1 to 1.6 MWh per square meter depending on the geographical area. The country’s rather good irradiation can also make up for its small size and lack of large fields suitable for utility-scale installations.