Government back pedalling on renewables levy

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Croatia's government has done an about face on its decision, announced in its last session of 2007 to increase a levy on utilities and electricity retailers designed to foster renewable energy development. The levy was to have been increased to HRK 1.89/kWh ($0.26/kWh) at the start of January, which would have seen domestic electricity bills rise by HRK 3-4/kWh (EUR 0.41-0.55/kWh) a month. The government has now decided to keep the rate at HRK 0.89/kWh (EUR 0.12/kWh), saying "pressure will be reduced on electricity buyers, creating a better balance between collecting and spending the resources." The existing rate, which has been payable since July 2007, will be enough to cover the planned financial obligations for the purchase of electricity from authorized producers, says assistant economy minister Zeljko Tomsic. He concedes that some renewable energy projects are developing more slowly than expected, but says more renewables production can be expected from mid-2008 and in coming years. According to Leo Prelec, from the office of the Croatian Electricity Market Operator, about 100 requests to connect renewable energy and cogeneration projects to the network have been received. Some of these projects are just starting out, others are seeking a building and/or a location license. Regarding wind, Prelec says there has been some overlapping of wind measurement areas. He also says developers report that finding wind turbines on the world market is problematic with waiting lists of up to two years. An estimated EUR 500 million of the revenue from the renewables levy will be invested in renewables, mostly in wind projects, over the next three years, says Prelec.

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