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05 November 2018
On 23 August 2018 the government adopted a number of amendments to the Act on Renewable Energy Sources and High-Efficiency Cogeneration, which are now undergoing the legislative procedure.
According to the government, the amendments aim to:
The amendments seek to meet these aims by introducing the following measures:
The Act on Renewable Energy Sources and High-Efficiency Cogeneration, which entered into force in 2016, required electricity producers to buy electricity that was produced from renewable sources under regulated purchase prices and conditions. Under the amendments, the proposal that electricity suppliers' take over the total net of electricity delivered by eligible producers at a regulated purchase price has been postponed until 2019.
HROTE concluded agreements with eligible producers on the takeover of electricity guaranteeing high-incentive prices (feed-in tariffs) for 14 years, while suppliers must take over the electricity under regulated prices and conditions.
This obligation on suppliers was initially imposed until 1 January 2017, but was postponed several times due to a lack of financial resources necessary for fulfilling contractual obligations under agreements concluded with eligible producers.
Consequently, the government is seeking a solution that balances the interests of electricity suppliers and market liberalisation with the continuation of the incentive scheme.
Although only a temporary solution, the amendments will require electricity suppliers to buy a share expressed as a percentage of the net electricity delivered by eligible producers, while the remaining share must be sold on the electricity market in a transparent and impartial manner. This should reduce the pressure on electricity suppliers – at least in part.
The amendments to the Act on Renewable Energy Sources and High-Efficiency Cogeneration are currently undergoing the legislative procedure. The changes are quite significant and focus on mitigating the financial burden imposed on suppliers and achieving the complete liberalisation of the electricity market. However, whether the changes will be successful remains to be seen.
For further information on this topic please contact Ivana Manovelo, Miran Macešic or Jelena Zjačić at Maćešić & Partners by telephone (+385 51 215 010) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Maćešić & Partners website can be accessed at www.macesic.hr.
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