Legislation framework for Croatian renewable energy sources development

The energy sector reform in the Republic of Croatia (started 2001), which. comprises restructuring liberalisation, privatisation, and changes in the overall energy sector, has a significant effect on the possibilities of introducing and increasing the share of renewable energy sources (RES). The reforming adoption of a new legislative framework within the context of re Croatia's energy sector is of key importance for further development and fir the future or RES utilization. The Electricity Market Act sets out the legal gal obligation to purchase electricity produced from RES in the manner that a quota or a minimum obligatory share of RES in electricity production is determined by a Government ordinance combined with Tariff system for the production of electricity from renewable energy sources and co-generation. Consequently, on the one hand, incentive funds needed to cover increased costs of production from RES will be collected from customers through the supplier and distributed to privileged producers (feed-in-tariffs, purchase is guaranteed to RES producers on known terms) through the Market Operator. On the other hand, RES investment projects will be encouraged by purpose-specific government subsidy and by the Environmental Protection and Energy Efficiency Fund (out of public budget). By applying new energy legislation and associated by-laws (coming into force in 2007), RES projects in Croatia will be provided with a complete and stable legal framework as well as support through incentive measures which will equitably value environmental, social and other benefits of RES use.