Croatia: Citizens push hard to kick-start energy sharing

Although Croatia has legislation that allows for the establishment of energy communities, administrative obstacles and opposition from the energy sector are blocking progress. Citizens and NGOs are champing at the bit.

"It's a catch 22," says Goran Cacic when asked about the legal technicalities preventing his Green Energy Cooperative, a Zagreb-based NGO, from becoming a full-fledged citizen energy community. Cacic wants his renewable energy collective to be able to share and distribute electricity as well as produce it, which it does now.

"Croatia's energy regulator says we need to register to 'organize citizen energy communities,' but the courts don't recognize that as an official activity and won't let us," he explains.

But that isn't the only obstacle blocking citizen energy communities over two years after the Croatian parliament established a legal basis for them.

Green activist Vjeran Pirsic from the island of Krk — which wants to become Croatia's first energy-autonomous island — even uses the word "sabotage" to describe the situation. He says that the development of renewable energy sources in the country of four million has long been stymied by powerful coal, gas and nuclear lobbies.

Improvements and setbacks

For individual solar producers in Croatia, the situation has improved dramatically since 2018. The number of required documents, for instance, has dropped from 66 to only three, says Pirsic.

What's more, there are EU-financed incentives, and since the war in Ukraine began in 2022, Croatia's government has abolished taxes on all solar installations.

All of this will help Krk in its bid to become Croatia's first energy-autonomous island, albeit without the aid of genuine energy communities — democratic associations that are co-invested in renewable sources and may also participate in distribution, energy storage and sharing, energy efficiency services or other energy services.

Democratic energy associations

Indeed, energy communities remain an unsolved problem in Croatia. The Croatian law that wrote the citizen energy community model into national legislation includes restrictions that are not part of the EU directive.

For example, Croatian authorities limit the power of community power plants to 500 kilowatts, which is less than about 1,000 panels.

Moreover, the communities must be non-profit and employ an expert — a tough requirement for grassroots projects. In fact, citizen energy communities have to fulfill much the same requirements as large wind-farm projects worth hundreds of millions of euros, says Cacic.

Croatia: as green as it claims to be?

The 2019 EU directive on energy communities spells "decarbonization, digitalization, decentralization, and democratization — and that's a distinct threat to the powers that be," says Pirsic, adding that this includes large wind power developers. "They don't want to lose their grip on the energy sector."

On paper, Croatia is one of the greenest countries in the EU: Renewable energy accounted for around 60% of the country's energy mix in 2023. But this record volume is thanks to socialist-era hydroelectric plants on Croatia's rivers — and an unusually rainy 2023.

In fact, sunny Croatia, which has 1,750 kilometers of coastline, still imports around a quarter of its electricity, including from the lignite-fired thermal-power plants in Serbia and Bosnia-Herzegovina.

Falling short on goals

The country will most probably fail to reach its goal of reducing greenhouse gas emissions by roughly 35% by 2030, compared with 1990 levels. A recent European Commission assessment of the country's draft climate and energy plan found Croatia falling short on energy efficiency and renewables.

Despite its enormous solar potential, Croatia is among only seven EU countries with solar power capacities below one gigawatt, according to the solar lobby SolarPower Europe.

The development of renewables in Croatia has concentrated mainly on wind power, which covers around 13% of the country's electricity needs. But even wind-energy buildout in the last eight years has slowed, blocked by inadequate legislation and an understaffed administration.

The first citizen energy community

There is, however, some progress on the energy-community front. The volunteer firefighters association in Spickovina, a village in northwestern Croatia, is planning to build a solar power plant that will function as a bona fide clean energy community according to EU standards.

Experts say that pilot projects like Spickovina will break the ice and encourage others to follow.

"The energy system is going to transform, move away from the traditional large players who manage large areas and large energy projects," says Slavica Robic from REGEA, a regional energy agency in northwestern Croatia, which is assisting the Spickovina firefighters. The agency regularly receives calls from interested parties who have heard about Spickovina and want to set up their own energy generation system.

Vested interests

But this is exactly what the major players in the energy sector don't want, claims Pirsic, who founded a prosumer NGO on the island of Krk in 2012.

The state-owned utility HEP, which once had a monopoly on power generation in Croatia, fails to understand how small producers can help balance the grid and reduce power-system shortages at peak hours, says Pirsic.

More private solar power plants, no energy communities

"Energy communities are not in the interest of electricity suppliers," says Sanela Mikulcis Santic, the manager of the energy NGO Klik from the small town of Krizevci in northern Croatia. Klik has helped over 100 citizens install rooftop solar power plants in recent years and has plans to double the installed capacity in 2024.

So far, Pirsic's NGO has helped citizens, businesses and municipalities construct more than 200 small solar power plants.

NGOs like these are leading the way to a more democratic energy future, but, for now, do not plan to register as citizen energy communities because the legislation is hampering their progress.

What is changing is that more and more Croatians want to generate their own energy — and know they have the EU firmly on their side.