The basic principles of the energy sector, the main permitting procedures for the production and supply of electricity, as well as competencies and powers of regulatory governmental bodies, are defined by the Energy Act as the umbrella law of the energy sector.

The main aspects applicable to the organisation of the electricity market and procedures of connecting to the grid are defined by the Electricity Market Act (“EMA”) and its bylaws. Electricity production from RES is regulated by a separate lex specialis – Renewable Energy Sources and High-Efficiency Cogeneration Act (“RES Act”) – introduced in 2016 and substantially amended in 2021.

The Croatian energy regulatory framework and strategies are aligned with the EU legislation, i.e., Croatia has transposed the Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (“RED II”) and Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (“Energy Market Directive”) in the RES Act and the EMA. Transposition of the new amendments to the RED II which entered into force in November 2023 (known as RED III) into the RES Act is currently in process and is expected to be finalised in Q1 2024.

Energy Market Act

EMA transposed the Energy Market Directive and among other things introduced new energy activities and services relating to aggregation, energy storage, and electromobility, as well as new possibilities for the production of electricity by end consumers (active consumers), including by citizen energy communities.

The new act includes noteworthy changes to the development process of RES projects, with the energy approval becoming one of the first administrative acts a project company has to acquire (until now the energy approval was a document enabling “reservation” of a location for the development of a specific project was obtained at a later stage when developers already made significant investments in the project documentation).

Recently, there has been a significant rise in the popularity of production of electricity by end consumers (defined as renewable energy self-producers in the RES Act). A growing number of companies (including in the food production and hospitality sectors) have started constructing (integrated rooftop) solar power plants for the production of electricity for their own needs.

The system allows such producers to sell the excess electricity to suppliers on the electricity market. With the volatility of the energy market, and obligations relating to sustainability and green governance, this kind of self-production of electricity is becoming ever more popular.