This year, HROTE’s sales are going to be €45.3 million less than expected. According to the Croatian government, it will require €22.6 million to be able to meet all commitments under the deals with the privileged power producers by close of the year. HROTE is a state-regulated company in control of a system of subsidies for the renewable energy production. It buys all of its electricity from privileged power providers that generate it using renewable energy sources and high-efficiency cogeneration.
As per the government, the influence of the COVID-19 outbreak on the electrical market is one of the key causes for the decline in turnover. HROTE’s financial troubles were published in Croatian media to highlight severe flaws in the system’s operation for promoting green energy. Croatia, for example, has implemented auctions for incentive distribution. The first auction took place in January, as well as a new one has been scheduled for the autumn.
Croatia’s renewable energy incentive system is primarily based on a fee for renewable sources and extremely efficient cogeneration, which is gathered from all electricity customers. The price is now EUR 0.014 for every kWh, but it’s been cut as a kind of state assistance for certain types of business consumers. HROTE sells 60% of the electricity it receives from the privileged power producers on the electricity exchange and 40 percent to suppliers at a set purchase price of approximately EUR 0.056 per kWh.
As per the government’s resolution on the HROTE loan, HROTE will have a €45.4 million decrease in revenue than expected due to the effects of the epidemic year 2020 on the electricity markets. The loss in income was primarily due to a 6% decrease in electricity usage in Croatia in 2019 compared to 2018. As per the decision, it was also going to result from the market’s 30% fall in electricity prices.
Another aggravating factor is that in the year 2020, the regulation on lowering the fee for the “energy-intensive economy” went into effect, cutting HROTE’s revenues by €8 million. Croatia has recently produced greater electricity from renewable sources compared to fossil fuels. Because huge hydropower plants supply most of Croatia’s electricity, the share of renewable energy varies based on hydrological circumstances.
Croatia has already surpassed its goal of using 20% renewable power in its ultimate energy consumption. The EU Directive (EU) 2018/2001 suggested raising the renewable energy share to at least 32 percent by 2030. According to Eurostat data, Croatia had a 29 percent RES share in the year 2015, but the percentage has continuously declined since then, and it was 27.25 percent in 2017.