State and Development of Legaland Institutional Framework for Promotion of Renewable Energy Sources and Cogeneration in the Republic of Croatia

Within the European integration process, Croatia has tailored its energy sector reform concept to the legal and institutional framework of the European Union requirements while taking into consideration the national-specific solutions. Multilateral and bilateral screening meetings held within the Brussels negotiation process on chapter 15 Energy focused on in-depth analysis of Croatian legislation covering the sector under consideration. A new legal framework (Official Gazette 68/01 and 177/04) set up within the Croatian energy sector reform is of major importance for the future development and exploitation of renewable energy sources (RES). The Energy Act is a fundamental law which creates a background for a number of laws and by-laws regulating exploitation, relevant rights and obligations, incentives, organisation and institutions involved in RES use. The secondary regulations introduce an institutional organization that should enable planning and construction of the entrepreneurship-driven RES projects. RES harnessing in heating is regulated by district heating sector legislation, biofuels are regulated by special legislation, the RES-based energy production investments are to be encouraged by the Environmental Protection and Energy Efficiency Fund, and by implementation of the Tariff System for the production of electricity from renewable energy sources and cogeneration as well as by a Regulation on a Fee for Stimulating the Production of Electricity from Renewable Energy Sources and Cogeneration. Development and manufacture of equipment used for RES projects is supported by state aid (subventions). Defining and setting up of a legal and institutional framework which relies on energy-related and environmental aspects and socio-economic impact, is expected to render positive macroeconomic effects.