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Power Generation Strategy Development in Croatia

Electricity generation as an economic sector contributes to the national GDP through increasing investments and exports. In the period from 2000 to 2008 the annual growth rate of final electricity demand was 3, 8% which was higher than for any other energy form. Almost 1200 MW of thermal power plants will go out of system due to lifetime (more than 30 years). Energy Strategy is a basic document of the Energy Act with the purpose to define energy policy and future plans for energy development of the Republic of Croatia till 2020. Based on the adopted strategy the Government will create the Energy Strategy Implementation Programme for the four-year period. Croatia’s energy development should be based on best available technologies as well as on energy-related, economic and environmental assessment of all available energy options. Energy strategy of Croatia (NN 130/09) puts up next goals: 300 MW hydro power plants (>10 MW), 1200 MW gas-fired thermal power plants (including 300 MW of cogeneration), 1200 MW of coal-fired thermal power plants, and 35% of renewables (including hydro). The market, i.e. a competitive generation, is the driving force in the construction of new power plants. The main stimulus for the construction is the possibility of definite return of invested capital as well as earning of reasonable profit for investors. Choose of location, environmental impact and competitiveness are main criteria for decision making. Technological and financial terms of new power plant is under influence of the law of supply and demand, so short marginal costs are in the first view – power plant life is at least 30 years – how to deal with this conditions, who will invest in long-term projects with condition of short pay-back period. Climate change and greenhouse gas emissions have become a priority development issue. The main challenge is a long-term development of economy with decreased emission of carbon dioxide. Kyoto protocol obligations, Copenhagen Accord and EU emission trading scheme are setting development goals regarding CO2. In 2013-2020 (EU ETS III) all thermal power plants should buy 100% emission allowances on auction. Implementing Croatian energy strategy, power sector will need extra 7, 5-8, 5 mil t of CO2 for 2020 (consumtion 28 TWh) in comparison with 2005 (consumtion 17 TWh) or in total 12-13 mil t CO2. with presumed price of 40 €/t CO2 Croatian power sector will have extra cost of around 500 mil € annualy. Minimum 50% of those fund necesary for buying 4, 5 mil t will be some national fund and half of the rest of fund till 12 mil t will be fund of some EU Member State. If we are not able to buy extra emission, we will need to import the electricity. In very conservative scenario we can presume that Croatia will not be able to import the electricity and than we need to include costs of VOLL which are minimaly 4€/kWh. So, the greatest problem today is climate change on the one hand and security of supply on the other. Of all the observed measures, nuclear energy use is the measure with the greatest potential in decreasing the greenhouse gas emissions. Secondly, nuclear energy contributes to security of supply because it increases the variety of energy sources. However, all aspects of the environmental impact, especially with regard to decommissioning and radioactive waste disposal should be considered. Nuclear option is only solution for economy of Croatia.

power generation; strategy; croatia; 2020

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