GDPE0776ICR- Croatia Power Market Outlook Sample 1,2,4 ...Croatia Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 10 CROATIA POWER

REFERENCE CODE GDPE0776ICR | PUBLICATION DATE MAY 2015

CROATIA POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS,

AND COMPETITIVE LANDSCAPE

Croatia Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

CROATIA POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

Executive Summary

Croatia’s Power Sector Outlook

Croatia, previously part of the Socialist Federal

Republic of Yugoslavia, is one of the youngest

members of the EU, having joined in 2013. It is not

yet part of the monetary union and retains its own

currency, the kuna. Croatia entered the EU with

the intention of boosting its economy, which is

highly dependent on inward flows of foreign

investment. However, investors have had trouble

dealing with the country’s internal labor laws, which

do not facilitate the quick layoffs that are an

essential part of a capitalist economy. Croatia’s

highly skilled labor force has also proven a

handicap, having caused salary expectations to be

higher than in neighboring countries, which has led

to foreign investors bypassing the country.

Consequently, Gross Domestic Product (GDP)

grew at a Compound Annual Growth Rate (CAGR)

of just XX% between 2000 and 2014. Low growth

in services and industry was also reflected in low

power consumption growth, which grew at a CAGR

of XX%. The residential sector remains the largest

consumer of power, which is a trait usually only

found in developing nations, at XX% of annual

power consumption in 2014.

Power Market, Croatia, Gross Domestic Product ($bn), and Annual Power Consumption (TWh), 2000–2019

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Ann

ual p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

bn)

GDP (constant prices) Annual power consumption Source: GlobalData; IMF, 2014 TWh: Terawatt hour

The growth in annual power consumption from XX

TWh in 2000 to XX TWh in 2014 was reflected in

the generation growth pattern, which increased

from XX TWh in 2000 to XX TWh in 2014 at a

CAGR of XX%. The increase was largely due to

growth in hydropower generation, which grew at a

CAGR of XX% in the same period.


Table of Contents


1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 7

1.2 List of Figures ..................................................................................................................... 8

2 Introduction ................................................................................................................................. 9

2.1 GlobalData Report Guidance ............................................................................................ 10

3 Croatia Power Market, Snapshot .............................................................................................. 11

3.1 Croatia, Power Market, Macro-economic Factors .............................................................. 11

3.2 Croatia, Power Market, Supply Security ............................................................................ 13

3.3 Croatia, Power Market, Opportunities ............................................................................... 14

3.4 Croatia, Power Market, Challenges ................................................................................... 15

4 Croatia, Power Market, Market Analysis ................................................................................... 16

4.1 Croatia, Power Market, Market Structure .......................................................................... 16

4.2 Croatia, Power Market, Key Market Players ...................................................................... 16

4.3 Croatia, Power Market, Financial Deals ............................................................................ 17

4.3.1 Deal Value and Volume Analysis, 2004–March 2015 .................................................... 17

4.3.2 Deals by Type, 2014 ..................................................................................................... 18

4.4 Croatia, Power Market, Demand Structure ........................................................................ 18

4.4.1 Power Consumption by Sector, 2014 ............................................................................ 21

5 Croatia, Power Market, Regulatory Scenario ............................................................................ 22

5.1 Croatia, Power Market, Development of Renewable Energy ............................................. 22

5.1.1 Feed-in Tariffs ............................................................................................................... 23

5.2 Croatia, Power Market, Energy Efficiency ......................................................................... 24

5.2.1 Problems with the Implementation of Renewable Energy Plans .................................... 24

6 Croatia, Power Market, Capacity and Generation Overview...................................................... 26

6.1 Croatia, Power Market, Cumulative Installed Capacity, 2000–2025 .................................. 26

6.1.1 Installed Capacity, Breakdown by Fuel Type, 2014 ....................................................... 26


Table of Contents


6.1.2 Cumulative Installed Capacity and Annual Generation, 2000–2025 .............................. 27

6.1.3 Cumulative Installed Thermal Power Capacity and Annual Thermal Power Generation, 2000–2025 ................................................................................................................... 30

6.1.4 Cumulative Installed Hydropower Capacity and Annual Hydropower Generation, 2000–2025 ............................................................................................................................. 34

6.1.5 Cumulative Installed Renewable Power Capacity and Annual Renewable Power Generation, 2000–2025 ................................................................................................ 38

7 Croatia, Power Market, Transmission and Distribution Overview .............................................. 42

7.1 Croatia, Power Market, Transmission Network Overview .................................................. 42

7.1.1 Transmission Network Development ............................................................................. 43

7.1.2 Transmission Network Unbundling ................................................................................ 44

7.2 Croatia, Power Market, Distribution Network Overview ..................................................... 44

7.3 Croatia, Power Market, Grid Interconnection ..................................................................... 45

7.3.1 Power Import and Export Trends, 2000–2014 ............................................................... 46

7.4 Croatia, Power Market, Electricity Trading ........................................................................ 47

8 Croatia, Power Market, Competitive Landscape: Snapshot of Leading Power Generating Companies ............................................................................................................................... 48

8.1 Key Company in the Croatian Power Market: Hrvatska Elektroprivreda d.d. ..................... 48

8.1.1 Hrvatska Elektroprivreda d.d., Company Overview........................................................ 48

8.1.2 Hrvatska Elektroprivreda d.d., Business Description ..................................................... 48

8.1.3 Hrvatska Elektroprivreda d.d., SWOT Analysis .............................................................. 49

9 Appendix................................................................................................................................... 53

9.1 Market Definitions ............................................................................................................. 53

9.1.1 Power ............................................................................................................................ 53

9.1.2 Installed Capacity .......................................................................................................... 53

9.1.3 Electricity Generation .................................................................................................... 53

9.1.4 Electricity Consumption ................................................................................................. 53

9.1.5 Thermal Power Plant ..................................................................................................... 53

9.1.6 Hydropower Plant .......................................................................................................... 53


Table of Contents


9.1.7 Nuclear Power............................................................................................................... 53

9.1.8 Renewable Energy Resources ...................................................................................... 54

9.2 Abbreviations .................................................................................................................... 54

9.3 Bibliography ...................................................................................................................... 55

9.4 GlobalData’s Methodology ................................................................................................ 56

9.4.1 Coverage ...................................................................................................................... 56

9.4.2 Secondary Research and Analysis ................................................................................ 56

9.4.3 Primary Research and Analysis..................................................................................... 57

9.5 Disclaimer ......................................................................................................................... 58


Table of Contents


1.1 List of Tables

Table 1: Power Market, Croatia, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2019 ................................................................................................. 13

Table 2: Power Market, Croatia, Deal Value ($m) and Number of Deals, 2004–March 2015 ...................... 18

Table 3: Power Market, Croatia, Annual Power Consumption (TWh), 2000–2025 ...................................... 20

Table 4: Power Market, Croatia, Power Consumption by Sector (%), 2014 ................................................ 21

Table 5: Power Market, Croatia, Renewable Energy Feed-in-Tariffs (€/kWh and $/kWh), 2014 .................. 23

Table 6: Power Market, Croatia, Cumulative Installed Capacity by Fuel Type (%), 2014 ............................ 26

Table 7: Power Market, Croatia, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2025 .................................................................................................................................. 29

Table 8: Power Market, Croatia, Leading Thermal Power Plants, 2015 ...................................................... 31

Table 9: Power Market, Croatia, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 33

Table 10: Power Market, Croatia, Leading Hydropower Plants, 2015........................................................... 35

Table 11: Power Market, Croatia, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower

Generation (TWh), 2000–2025 .................................................................................................... 37

Table 12: Power Market, Croatia, Leading Renewable Power Plants, 2015 ................................................. 39

Table 13: Power Market, Croatia, Cumulative Installed Renewable Power Capacity (GW) and Annual

Renewable Power Generation (TWh), 2000–2025 ....................................................................... 41

Table 14: Power Market, Croatia, Transmission Line Length (Ckm), 2000–2020 ......................................... 43

Table 15: Power Market, Croatia, Distribution Line Length (Ckm), 2000–2020 ............................................. 45

Table 16: Power Market, Croatia, Total Annual Imports and Exports (TWh), 2000–2014 ............................. 47

Table 17: Power Market, Croatia, Hrvatska Elektroprivreda d.d., SWOT Analysis, 2014 .............................. 49

Table 18: Abbreviations .............................................................................................................................. 54


Table of Contents


1.2 List of Figures

Figure 1: Power Market, Croatia, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2019 ................................................................................................. 12

Figure 2: Power Market, Croatia, Deal Value ($m) and Number of Deals, 2004–March 2015 ...................... 17

Figure 3: Power Market, Croatia, Annual Power Consumption (TWh), 2000–2025 ...................................... 19

Figure 4: Power Market, Croatia, Power Consumption by Sector (%), 2014 ................................................ 21

Figure 5: Power Market, Croatia, Cumulative Installed Capacity by Fuel Type (%), 2014 ............................ 26

Figure 6: Power Market, Croatia, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2025 .................................................................................................................................. 28

Figure 7: Power Market, Croatia, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 32

Figure 8: Power Market, Croatia, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower

Generation (TWh), 2000–2025 .................................................................................................... 36

Figure 9: Power Market, Croatia, Cumulative Installed Renewable Power Capacity (GW) and Annual

Renewable Power Generation (TWh), 2000–2025 ....................................................................... 40

Figure 10: Power Market, Croatia, Total Annual Imports and Exports (TWh), 2000–2014 ............................. 46



Introduction

2 Introduction

Croatia is a developing country, but has recovered considerably from the damage inflicted on it

during the 1991–1995 Croatian War of Independence. It has a parliamentary democracy and

became a member of the EU towards the end of 2013.

Its economy is liberalized. However, inward Foreign Direct Investment (FDI) has been declining

steadily, owing to the global economic recession and tough labor laws. With an estimated Gross

Domestic Product (GDP) of $XX billion (at current prices) in 2014, Croatia is estimated to have

registered a GDP growth rate of XX% over 2013. The services sector accounted for the majority

share of GDP with XX%, followed by the industry sector with XX%, and the agricultural sector with

XX% (CIA, 2015). Its economy was affected negatively by the global economic recession in 2008

and has yet to recover from its impact. A high unemployment rate, increasing trade deficit, a poor

investment climate, and uneven regional development are some of the factors that are restricting

Croatia’s growth. Its economy is largely dependent on exports, which were valued at $XX billion in

2014. However, exports were also adversely affected by the unrest in the global financial market,

especially in Europe, and resulted in a reduced capital inflow.

Croatia does not have sufficient natural resources to support its energy demand and, as a result,

imports thermal fuels. This dependence on fossil fuel imports is adding to its expenditure and is

contributing to its Greenhouse Gas (GHG) emissions. In addition, since the time of its

independence, it has not invested significantly in the construction of new power facilities, meaning

that existing thermal power plants are very old. The government is increasing its focus on

constructing renewable energy power plants.

In line with the EU energy policy directive, Croatia aims to generate 20% of its energy consumption

from renewable sources by 2020. A basic legal framework for renewable energy, energy efficiency,

and the cogeneration of heat and electricity has also been formulated. The government provides

incentives, for renewable power producers such as priority grid access, Feed-in Tariffs (FiT), and

cost sharing for grid connections in an attempt to increase the construction of renewable energy

projects. The government is also augmenting its Transmission and Distribution (T&D) network to

connect upcoming power projects to the grid and provide a secure and stable supply of electricity

to end-users.



Introduction

2.1 GlobalData Report Guidance

The executive summary captures the key growth trends in Croatia’s power market.

Chapter three provides a snapshot of the key parameters affecting the country’s power sector,

as well as key points about its power market.

Chapter four provides analysis of Croatia’s power market.

Chapter five details the regulatory scenario for the Croatian power market and the inward

foreign investment scenario.

Chapter six provides information on the country’s cumulative installed capacity and annual

generation trends, as a whole and by individual generation source.

Chapter seven describes the country’s power T&D infrastructure and includes information on

interconnections with neighboring countries. The section also covers electricity imports and

exports, and upcoming grid-related projects.

Note: all 2014 market figures provided in the report are estimates, except where actual data are

available.



Market Analysis

4.3 Croatia, Power Market, Financial Deals

4.3.1 Deal Value and Volume Analysis, 2004–March 2015

The deals market in Croatia’s power sector showed an increasing trend between 2006 and 2012.

The increase came mainly after 2011 due to the global economic crisis that followed the eurozone

crisis, which resulted in the loss of market liquidity and forced companies to consolidate, merge or

access funds through various financial instruments. This led to an increase in the annual deal value

from 2011. Since 2013, with the two succeeding crises having receded and the market liquidity

scenario improving, the deal market has again declined.

Figure 2: Power Market, Croatia, Deal Value ($m) and Number of Deals, 2004–March 2015

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 March 2015

Num

ber

of d

eals

Dea

l val

ue (

$bn)

Deal value Number of deals

Source: GlobalData, Power Database [Accessed on April 15, 2015]



Market Analysis

4.4.1 Power Consumption by Sector, 2014

The residential sector accounted for the highest share of power consumption in 2014 with XX%,

followed by the service sector with XX%, the industrial sector with XX%, the transport sector with

XX%, and the agriculture sector with XX%. Other smaller sectors, including the energy industry,

accounted for the remaining XX% of consumption in 2014.

Figure 4: Power Market, Croatia, Power Consumption by Sector (%), 2014

Residential

Trade, commerce, and other services

Industrial

Transport

Agriculture and fisheries

Other

Source: GlobalData

Table 4: Power Market, Croatia, Power Consumption by Sector (%), 2014

Sector Share

Residential

Trade, commerce, and other services

Industrial

Transport

Agriculture and fisheries

Other

Source: GlobalData


Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

Power refers to the rate of production, transfer or energy use, usually related to electricity. It is

measured in Watts (W) and often expressed in kilowatts (kW) or Megawatts (MW). It is also known

as real power or active power.

9.1.2 Installed Capacity

Installed capacity refers to the generator’s nameplate capacity as stated by the manufacturer, or

the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on

a nameplate affixed to the generator.

9.1.3 Electricity Generation

Electricity generation refers to the process of generating electricity from other forms of energy. It

also refers to the amount of electricity produced. It is expressed in Gigawatt hours (GWh).

9.1.4 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports and

transmission and distribution losses. It is measured in Gigawatt hours (GWh).

9.1.5 Thermal Power Plant

A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels.

9.1.6 Hydropower Plant

A hydropower plant is a plant in which the turbine generators are driven by falling water.

9.1.7 Nuclear Power

Nuclear power is the energy released from the fission of nuclear fuel in a reactor.


Appendix


9.1.8 Renewable Energy Resources

Renewable energy resources are those that provide energy that is naturally replenished but limited

in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydropower

and wind are examples of renewable resources.

9.2 Abbreviations

Table 18: Abbreviations bcf billion cubic feet

CAGR Compound Annual Growth Rate

Ckm Circuit Kilometer

CCGT Combined-Cycle Gas Turbine

FDI Foreign Direct Investment

FiT Feed-In Tariff

FOU Full Ownership Unbundling

GDP Gross Domestic Product

GHG Greenhouse Gas

GW Gigawatt

HEP Hrvatska Elektroprivreda

HEP-ODS HEP Operator Distribucijskog Sustava

HEP-OPS HEP Operator Prijenosnog Sustava

HOPS Hrvatska Elektroprivreda Operator Prijenosnog Sustava

ISO Independent System Operator

ITO Independent Transmission Operator

kV kilovolt

kW kilowatt

kWh kilowatt hour

MW Megawatt

T&D Transmission and Distribution

TWh Terawatt hour

UNDP United Nations Development Program

Source: GlobalData,


Appendix


9.3 Bibliography

CBS (2013). Energy Statistics, 2012. Croatian Bureau of Statistics, 2013. Available from:

http://www.dzs.hr/Hrv_Eng/publication/2013/SI-1489.pdf

CIA (2015). Croatia: The World Factbook. Central Intelligence Agency, April 10, 2015.

Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/hr.html

[Accessed on April 15, 2015]

EIA (2013). Overview data for Croatia. US Energy Information Agency, May 30, 2013.

Available from: http://www.eia.gov/countries/country-data.cfm?fips=hr [Accessed on April 15,

2015]

IMF, 2014, World Economic Outlook Database, April 2014 [database]. Available from:

http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/index.aspx [Accessed on April 16,

2015]

RES Legal (2014). Electricity Promotion in Croatia. Renewable energy policy database and

support, July 18, 2014. Available from: http://www.res-legal.eu/search-by-country/croatia/tools-

list/c/croatia/s/res-e/t/promotion/sum/358/lpid/359/page.pdf?out=pdf

Stuper N (2014). “Croatia, renewable sources still to come”. Osservatorio Balcani e Caucaso,

September 15, 2014. Available from: http://www.balcanicaucaso.org/eng/Regions-and-

countries/Croatia/Croatia-renewable-sources-still-to-come-155413 [Accessed on April 15,

2015]

World Bank (2014). Ease of Doing Business in Croatia. The World Bank. Available from:

http://www.doingbusiness.org/data/exploreeconomies/croatia [Accessed on April 16, 2015]


Appendix


9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All of GlobalData’s databases are continuously updated and revised. The following methodology

has been followed for the collection and analysis of the data presented in this report.

9.4.1 Coverage

This report covers the Croatian power market, examining the market structure and providing

historical generation, capacity and consumption forecasts up to 2025. It also looks at the market’s

regulatory structure, import and export trends, the competitive landscape and leading active and

upcoming power projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data are collected and validated using a number of

secondary resources including but not limited to:

Government agencies, ministry websites, industry associations, the World Bank, IMF, and

statistical databases

Company websites, annual reports, financial reports, analyst reports and investor

presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases such as the Capacity and Generation Database, Power

Plant Database and Transmission and Distribution Database

Further to this, the following secondary information is collected and analyzed to project Croatia’s

power market scenario to 2025:

The macro-economic scenario

Government regulations, policies and targets


Appendix


Government and private sector investment

Contract and deal announcements

Utility expansion plans

The sector’s historical track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations

9.4.3 Primary Research and Analysis

Secondary research is supported by primary interviews with industry participants, to verify the

market numbers obtained through secondary research and obtain first-hand information on industry

trends.

A typical research interview fulfills the following functions:

Obtains the interviewee’s perspective on the market size, growth trends, competitive landscape

and future outlook

Validates secondary research findings

Further develops the analysis team’s expertise and market understanding

The participants are drawn from a diverse set of backgrounds, including power producers,

equipment manufacturers, industry associations, government bodies, utilities, distributors, and

academia. The participants include but are not limited to C-level executives, industry consultants,

academic experts, business development and sales managers, purchasing managers, plant

managers, government officials and industry spokespersons.


Appendix


9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

Documents

GDPE0776ICR- Croatia Power Market Outlook Sample 1,2,4 ...Croatia Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 10 CROATIA POWER