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European Commission approves 783 mln euros scheme to support renewable electricity in Croatia

The European Commission has approved, under EU State aid rules, a Croatian aid scheme to support electricity production from renewable sources. The measure will help Croatia reach its renewable energy targets, including those set in its Recovery and Resilience plan and contribute to the European objective of achieving climate neutrality by 2050, without unduly distorting competition in the Single Market.

“This 783 million euros scheme will enable Croatia to support renewable electricity production from a wide range of technologies,” said Executive Vice-President Margrethe Vestager, in charge of competition policy. “The measure will contribute to the reduction of CO2 and other greenhouse gas emissions, in line with the EU Green Deal objectives and the environmental targets set in Croatia’s Recovery and Resilience plan, without unduly distorting competition in the Single Market.”

Croatia had notified the Commission of its intention to introduce a new scheme to support electricity produced from renewable energy sources, namely wind, solar, hydro, biomass, biogas and geothermal power plants. The Commission found that the aid is necessary to further develop energy generation from renewable sources and help Croatia meet the European and national environmental targets. It also has an incentive effect, as electricity prices do not fully cover the costs of generating electricity from renewable energy sources.

Under the scheme, the aid will take the form of a premium on top of the electricity market price. The premium will be set through a competitive bidding process and will not be higher than the difference between the average production cost for each renewable technology and the electricity market price. The beneficiaries will be selected in tenders that will take place in the period 2021-2023.

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