HROTE’s Budimir: Sustainability, risk management are key for Croatia’s green transition

Efforts to achieve energy self-sufficiency, maximize energy efficiency and diversify gas supply, alongside climate objectives, show the challenges ahead, new Director of the Croatian Energy Market Operator (HROTE) Darjan Budimir said. Sustainable business models and quality in risk management will be key for a successful green transition, in his view.

In an opinion piece published by Poslovni dnevnik, Director of HROTE Darjan Budimir wrote that it has become clear how the energy sector is important and sensitive as it is developing in mid-term and long-term investment cycles rather than overnight.

“As all other countries, Croatia is increasing efforts to achieve energy self-sufficiency, energy efficiency and diversification of gas supply routes. Given the simultaneous need to achieve climate goals, it is clear how demanding the times ahead of us are, and sustainable models and quality in risk management will be key for a successful green transition,” he said.

The participants in the energy system cannot avoid continuously evaluating the situation and reacting in a timely manner, according to Budimir, who took over as the head of the Croatian regulatory body in late September. All countries in the European Union are focusing their activities in the energy sector on increasing the share of renewables in production and consumption, he noted.

Share of domestic low-carbon sources tops 70%

The current year was the most successful so far in Croatia with regard to the EU’s green transition and energy objectives, Budimir pointed out. The share of domestically generated green energy surpassed 59% including 41% from hydropower plants alone. HROTE’s CEO also highlighted the fact that low-carbon sources account for over 70%, saying it is one of the highest scores in Europe.

Establishing a gas exchange would enable trading between balance groups on market principles and in line with the anonymity and transparency rules

Of note, Croatia owns half of the Krško nuclear power plant, also known as NEK, which is located just across the border in Slovenia.

CROPEX to launch 15-minute product intervals in January

The said changes in the electricity production shares have a crucial effect on the security of supply and opportunities that will contribute to the country’s energy self-sufficiency, Budimir said.

For balance groups in the electricity market and the EU-wide reforms in the segment, important news is the upcoming launch of 15-minute calculation intervals, he stressed.

Such short intervals will enable more precise planning and sales, which is especially important for smaller photovoltaic units, Budimir explained. The CROPEX exchange said this week that it would roll out 15-minute products on its intraday market. Namely, the testing of the 15-minute market time unit (MTU) capacity allocation on the Croatian, Slovenian and Hungarian borders has been completed.

All EU countries are focusing on increasing the share of renewables in production and consumption

The expected go-live date is January 9, while January 10 would be the first delivery day, through Single Intraday Coupling (SIDC), as announced by nominated electricity market operators (NEMOs) and transmission system operators (TSOs). The cooperation involves parties from 24 EU countries and Norway.

In addition, new roles are being introduced in the Croatian market including aggregators, active buyers and citizen energy communities, Budimir stressed.

In his view, business models based on environmental, social, and corporate governance (ESG) standards will be dominant in 2024, while in the energy transition sphere the focus will be more on using geothermal capacities and investing in energy storage and innovative technologies.

“We also expect stable supply in the gas market to continue, together with an upgrade of the LNG terminal and transportation capacities. We believe the further development of the gas market in Croatia is important. An establishment of a gas exchange would enable trading between balance groups on market principles and in line with the anonymity and transparency rules,” Budimir concluded.