Market Status: Croatia - Investment needed as developers lose interest

Croatia has set itself a goal of producing 5.8% of its total electricity in 2010 from renewable energy sources, excluding large-scale hydro, it hopes to expand the target to 20% by 2020.

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To achieve this, the country will need to invest around EUR10 billion, most of it from the private sector. Targeted installed wind capacity for 2020 is 1.2GW, a far cry from the 26.7MW in place now.

In 2009, the tremendous investor interest seen in the previous two years subsided. The global financial crisis is widely blamed for this, but Croatia's slow bureaucracy carries some responsibility. As many as 28 separate licences are required to build a wind farm, while the process of securing state land for wind development is also complex. Some renewable energy developers also feel the guaranteed period for feed-in tariffs of 12 years is too short and that it should be extended to as long as 18 years.

Still, between 2007 and 2009, Croatia's economic ministry received a total 172 applications for the construction of wind power plants, mostly in the Splitsko-Dalmatinska, Sibensko-Kninska and Dubrovacka-Neretvanska regions.

Meanwhile, 2009 saw the completion of the 9.6MW Orlice Wind Park near Sibenik, whose Enercon turbines became operational in December. German renewables developer Enersys, which owns the EUR12.7 million project, is now focusing on another Croatian project, the 34MW Ponikve Wind Park near Ston. Construction work is likely to begin this year. The EUR40 million project will eventually have 16 turbines, expected to deliver around 75GWh annually.

Patience required

Three years ago, state power utility HEP's renewable energy unit HEP-OIE signed an agreement to develop wind projects with Austrian firms Verbund and Bewag and Croatian power transmission equipment maker Dalekovod. Last year, the company managed to obtain a EUR50 million loan from German development bank KfW and plans to develop 100MW of wind projects with its partners near the town of Knin. Construction should begin in 2010 on the first of these, a 60MW plant near the Ocestovo village.

A construction permit has been issued for a 90MW, EUR64 million plant to be built across three sites in the region of Vrpolje. Preliminary consent has been given for only the first stage, during which 21 turbines totalling 43MW will be installed. Construction is due to begin this autumn for commissioning in early 2011.

Elsewhere, the 14-turbine, 42MW first stage of the Vratarusa Wind Park was supposed to have been completed in spring 2009, but there have been complications with its grid connection and a trial run is due. Assuming the trial is a success, the project should receive its operating licence.

Croatian developer Valalta and Germany's Wallenborn Projektentwicklung are investing EUR57 million in the project, the second stage of which will add a further eight turbines, taking total installed capacity to 66MW.

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