Two wind farms in Croatia enter merchant PPA deal, leave FiT subsidy scheme

Wind power plants ZD 6 and ZD 2 & 3 are among the first renewable energy plants to voluntarily leave the feed-in tariff (FiT) subsidy scheme in Croatia. Professio Energia signed a PPA deal with Danske Commodities, which now provides route-to-market services for the two facilities.

Renewable energy developer and investment manager Professio Energia and energy trading company Danske Commodities signed a power purchase agreement (PPA) for two wind parks in Croatia. They said the facilities are among the first in the country to voluntarily leave the feed-in tariff (FiT) subsidy scheme.

Danske Commodities now provides route-to-market services for onshore wind power plants ZD 6 (Zadar 6) and ZD 2 & 3 (Zadar  2 & 3), located in the Zadar area in Dalmatia. They have a combined capacity of 46 MW and an average yearly electricity production of 141 GWh total. Total grid connection power is 45 MW.

Klarić: The new deal should increase the value and competitiveness of the two wind parks

“The ZD 6 and ZD 2 & 3 parks were among the first wind projects ever built jointly by Professio Energia. They have supplied renewable energy to Croatian households for more than ten years and we are proud that they are among the first in Croatia to voluntarily leave the FiT subsidy scheme. By entering a route-to-market PPA with an experienced trading company like Danske Commodities, we hope to increase the value and competitiveness of the assets even further,” said Mario Klarić, CEO at Professio Energia.

Path is set for PPA deals throughout Balkans

Danske Commodities has a strategic aim to increase the value of renewable energy, making it able to compete on market terms, said Tor Mosegaard, the company’s Vice President and Head of European Power Trading.

In December, Danske Commodities signed the first post feed-in PPA to be consumed in Croatia between two non-state market participants. It became responsible for the trading and balancing of wpd’s 9.6 MW wind farm in Orlice.

Wind power plants ZD 6 and ZD 2 & 3 were commissioned in 2010 and 2012, respectively

“Danske Commodities has traded energy in Croatia for more than a decade and we now provide energy market services to the majority of the country’s balancing group members. Together with ambitious renewables developers like Professio Energia, Danske Commodities wants to set a standard for more deals to be made across the Balkan region, so we can drive the energy transition forward,” Mosegaard stated.

The ZD 6 and ZD 2 & 3 wind parks are owned by EKO and Velika Popina, joint ventures between Professio Energia (50%) and ENCRO (50%). ZD 6, commissioned in 2010, has a capacity of 9.2 MW and an average yearly output of 26 GWh. ZD 2 & 3 came online in 2012. They have a combined capacity of 36.8 MW and an average production of 115 GWh per year.

The two facilities are jointly owned by Professio Energia and ENCRO

Professio Energia, owned by Croatian institutional investors, pension funds and insurance companies, is listed on the Zagreb Stock Exchange. It said it has a development and operational project portfolio of more than 300 MW.

Danske Commodities is an energy trading company that specializes in short-term power and gas trading and offers balancing, optimization and hedging services to energy producers and suppliers. The company is active in 40 countries. It is a wholly-owned subsidiary of Norway’s Equinor.

Market prices of electricity are several times higher than those within incentives system

The Renewable Energy Sources of Croatia (RES Croatia) association explained to Balkan Green Energy News that companies that break up a feed-in contract suffer no consequences except the inability to return the power plants to the incentives scheme. Of note, the tariffs freed up by such a move can’t be awarded to another operator as Croatia switched to premiums and contracts for difference (CfDs) in the meantime.

“In the situation where prices in the electricity market keep growing, a trend where RES projects would be coming to the market can be expected. Several RES projects already did it, and those that have less than five years until the expiration of their contract are also thinking about it,” the statement adds. RES Croatia pointed out that the average day-ahead power price at the domestic CROPEX exchange was EUR 360 per MWh in July, with a peak of a whopping EUR 520 per MWh or several times more than in the FiT system. The price was EUR 430 per MWh yesterday, and it grew to EUR 443.5 per MWh today.

Last month, Croatia’s first auction for renewable energy projects with large installed capacity was held with a very low investor response.