Biogas power plants in Croatia are on verge of collapse

Biogas power plants in Croatia are on the verge of collapse, according to the Renewable Energy Sources of Croatia association. For more than a year their owners have been struggling to cope with high prices of raw materials, and now from January 1 the government has introduced a price cap of EUR 180 per MWh.

The Renewable Energy Sources of Croatia association (OIEH) is asking the Croatian government to do something to help these power plants, but nothing has been done.

Biogas power plants in Croatia produce 385,000 MWh per year, enough to supply around 100,000 households. OIEH stressed that they generate baseload electricity, unlike the facilities that run on variable renewable sources.

Prices of raw materials increased up to 100%

According to the association, the first issues appeared at the end of 2021, when operational costs increased by several times. Prices of raw materials for obtaining biogas surged up to 100%.

Most of biogas power plants in the country had power purchase contracts with the Croatian Energy Market Operator (HROTE), as it implied receiving feed-in tariffs with a fixed price of EUR 170 per MWh. It was not enough, so 23 biogas facilities with a total capacity of 27 MW decided to give up the incentives and sell electricity in the market, where the prices were several times higher.

23 power plants left the incentives system

It allowed them to cover the repayment of loans for the construction of the plants as well as the procurement of raw materials.

Maja Pokrovac, managing director of OIEH, says that for a year the association has been asking the state to adjust the feed-in tariff calculation and include a variable market-based share, but without success.

Biogas facilities are in pain and they need a price of EUR 280 per MWh to cover the costs, she added.

The introduction of a price cap at EUR 180 per MWh is a new barrier

The war in Ukraine further deepened the energy crisis and accelerated the rise in prices, so the European Union decided to introduce a cap of EUR 180 per MWh for power producers.

OIEH believes that biogas plants in Croatia have significantly higher costs than EUR 180 per MWh. It proposed to the government to apply special measures like other EU member states to help them so that the security of supply and the sustainability of renewable energy production are maintained.

The EU’s decision enables a solution to be found for biogas power plants

Austria and Germany have decided that the limit won’t be applied to biogas power plants with a capacity lower than 1 MW while the Czech Republic and the Netherlands have introduced a higher price cap compared to other technologies.

According to OIEH, the EU’s price cap allows higher price limits to be introduced when investments and operating costs for energy production exceed EUR 180 per MWh.

Pokrovac: If we don’t do something, we will destroy the biogas industry in Croatia

Pokrovac points out that EU countries understand biogas is important to them, adding that she doesn’t see why it is not understood in Croatia. Not all renewables are equal, and the state has to accept that the technologies are different, she asserted.

If Croatia leaves the price cap at EUR 180 per MWh for biogas, it will destroy such power plants, Pokrovac said at the conference Energy 2023 – Security of Supply and Energy Prices.