Development cap by network starts to hurt investment potential

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The government's decision to cap development of wind plant in Croatia at just 360 MW until further notice is already starting to take its toll, with some investors debating whether to pull out of the market altogether. "We are seriously considering whether to invest in this business at all," says Bojan Rescec of local company GEP-AE, a member of Austrian energy group Hydrocontracting. After waiting two years for consent from Croatia's national power company HEP to connect three planned wind farms totalling a combined 90 MW to the distribution network, the company has been told just one plant, the 15 MW Bubrig wind farm, can proceed. GEP-AE had been prepared to invest EUR 100 million to build the three projects along with a ten kilometre 110 kV power line which, GEP-AE says, would have provided the Podi Business Zone with much needed electricity. The cap on generation feeding into the line makes its financial viability highly questionable," says Rescec. He is also bewildered that in some cases project authorisations have been issued to "anonymous companies" which he suspects "have taken the locations in order to trade them." For its part, HEP acknowledges that approvals are being issued with a "medicine dropper." But even though there are applications from over 1800 MW of projects seeking to connect to the grid, the grid system can only accommodate 360 MW at present, according to HEP.

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