Overall assessment

Updated December 2022

Croatia has adopted provisions on RECs and CECs in its national legislation. Rules for the registration of energy communities has also been adopted. However, despite copy-pasting requirements for an enabling framework, the Government has not yet undertaken an assessment of barriers or potential for the development of RECs. Furthermore, it has not articulated in detail any of the elements of the enabling framework. Indeed, some provisions in the new law, particularly on the geographic restrictions for conducting activities and membership, as well as the registration and licensing process, are disproportionately burdensome for energy communities and represent significant barriers to their establishment. No support schemes have been designed. While some of the rules around energy sharing have been developed, there are no incentives attached to this activity and due to other barriers to registration and licensing, this activity is so far not possible.

Overall, the conceptual and regulatory framework for RECs, CECs, and energy sharing needs to be clarified. Furthermore, a dedicated enabling framework and a dedicated support mechanism that can help energy communities to emerge, is still missing.

Detailed assessment

Assessment of obstacles and potential for development of ECs

The government is legally required by national law to assess the existing obstacles and potentials for the development of renewable energy communities in the territory of the Republic of Croatia. However, it has not yet done so.

The Agency shall propose the main elements of the incentive framework referred to in paragraph 4 of this Article and its implementation for inclusion in the NECP as well as in progress reports in accordance with Regulation (EU) 2018/1999, which shall be included in NECP updates. and the NECP Progress Report. It is not entirely clear what is meant by this provision, but since the first NECP reports are due in 2023, it could be that the government plans to adopt its enabling framework by then.

Removal of unjustified regulatory & administrative barriers

Under national legislation, the Minister makes a decision on recommendations for the removal of obstacles and the relief of administrative procedures that limit the use of energy from renewable sources, including measures to promote the consumption of energy from renewable sources from self-production and community energy from renewable sources. So far, this has not yet been done.

On the other hand, there are several concrete barriers to setting up and operationalizing an energy community through the new Energy Law. First, all the members of the energy community must be connected to the same 10(20)/0.4 kV transformer station. This represents an additional geographical restriction which will inherently limit the size of the community and the activities they are able to undertake, unjustifiably limiting their rights to participate in the market. Second, the registration procedure for becoming acknowledged as an energy community by the regulator is treated as a fully regulated activity. The resulting requirements and procedure (see below) are significant barriers to even setting up an energy community.

DSO duties around cooperation with ECs and facilitation of energy sharing

The DSO is obliged to provide services to the energy community of citizens related to the energy sharing in accordance with the rules and price list of non-standard services of the operator of the distribution system and the general conditions for using the network and supplying electricity. The DSO is responsible for validating production that is shared by the members of the community, and for communicating this data to the supplier and the community itself. The energy community itself also has a duty to register with the DSO and provide it with the requisite information so that energy sharing can take place. Detailed regulations have been adopted to facilitate this activity.

Fair, proportionate, and transparent registration & licensing procedures

The new regulation that defines the procedure for obtaining the license to perform energy activities in Croatia has introduced the new energy activity named “Organizing the energy community of citizens”. However, there is a significant degree of unclarity and complexity around this process. First, it is not clear what is meant by the ‘activity of organizing an energy community’. It seems that is was just copied and pasted from the process of licensing for big energy service providers. Simple acknowledgment and registration of the energy community as a legal entity seems to be equated with a regulated activity. Also, it is unclear whether the energy community needs to apply for additional licenses for each of the activity it wants to conduct, for example energy production, distribution, etc. This represents an laborious hurdle for energy communities to navigate, and is unjustified.

The process of becoming licensed to be an energy community is extensive, complex, and expensive. In particular, the energy community must provide proof of technical and financial qualifications, none of which will be possible for energy communities just starting activities. It will also cost 1000 euros just to apply for a license. In reality, this will result in all but the most professional initiatives being unable to overcome this hurdle.

Incentives connected to network tariffs based on a CBA

The sharing of electricity does not call into question the applicable fee for the use of the distribution network and other prescribed fees in accordance with the methodology for determining the amount of tariff items for the distribution of electricity, based on the analysis of costs and benefits of distributed sources electricity. No special incentives have been developed for electricity sharing.

Non-discriminatory treatment as market participant

Not addressed in the transposition.

Accessibility to low-income & vulnerable households

Not addressed in the transposition.

Tools to access finance

Not addressed in the transposition.

Tools to access information

Not addressed in the transposition.

Regulatory capacity building for public authorities

Not addressed in the transposition.

NECP reporting on enabling frameworks

Its national legislation commits the government to including elements of the enabling framework in its progress reports in accordance with Regulation (EU) 2018/1999.

Support Scheme adapted for RECs

National legislation copy-pastes the Renewables Directive: The design of support programs shall take into account the specificities of renewable energy communities in order to enable them to compete for support with other market participants on equal terms. However, there have been no concrete measures or policies communicated in order to operationalize this requirement.