SUPPLEMENT : CROATIA and TURKEY

Croatia and Turkey are prioritised for membership Turkey in EU. As official candidate member states both countries try to meet Copenhagen criteria and prepare their economies to the common market

reality that is likely to be extended in the coming years. Turkey, Croatia and the EU countries are all

Energy Charter Treaty signatories, so the notions of the energy cooperation are already established.

With the accession of the two countries, this process will be reinforced, as the entire legal order

of EU will bind them. From the economic point of view, the membership of Croatia and Turkey is

strategic for EU, especially with regard to energy security. However, the final decision is still to come

and depends mostly on the political will of major EU countries. In the meanwhile, the Status of PV in

NMS includes already Croatian and Turkish PV markets, recognizing their high potential for future

development and further integration.

Croatia is the official candidate member state of the EU since 2004. It recovered the collapse of

former Yugoslavia and is second country, after Slovenia, with the strongest, market-oriented

economy and stable democratic political system. Croatia has ratified the Kyoto Protocol and lowered

successfully its carbon emissions. With RES sector in development, Croatia is an interesting country for investors. Solar electricity generation has vast potential due to good irradiation of Croatian territory with the max. PV output potential reaching 1450 kWh/kWp. Despite favourable conditions the installed PV capacity in 2008 totalled only 0,78 MWp (including 0,12 MWp on-grid). The Croatian

government set a non-ambitious target of 45,66 MWpof PVcapacity installed by 2020.

Isolated installations can benefit form state support represented by the Fund for Environmental

Protection and Energy Efficiency, allocated upon individual and criteria. Investors might

receive preferential loan with Croatian Bank for Reconstruction and Development earmarked for

necessary documents preparation (i.e. environmental impact studies). Loan is paid over max. 2-year time period and covers up to 50% (but max.150 000 USD) of the cost.

The most attractive in Croatia incentive system are certainly its feed-in tariffs. There are three levels:

0,50 EUR/kWh for systems smaller than 10 kWp, 0,45 EUR/kWh for systems bigger than 10 kWp but

smaller than 30 kWp and 0,31 EUR/kWh for the rest. FIT rate is guaranteed over 12 years and is

adjusted on a yearly basis. The weakness of Croatian RES market lies in its grid accession procedure which is complicated and lengthy.

Since 1963, Turkey has been an associated member of European Communities. It started the negotiations to become an EU member in 2005. Although it is still a question of political decision,

Turkey s attempts to fulfil the Copenhagen criteria is successful in many fields. In some areas,

however, are still behind the EU standards. Screening of the Turkish energy sector by the EU started in 2006 and demonstrated important insufficiencies that still require considerable. It is regrettable that Turkey is not a party to the Kyoto Protocol and no limits on gas emissions have been set yet.

Nevertheless energy renewable sources covers over 10% of total energy consumption. 1650

kWh/kWp of PV electricity output potential characteristic for the majority of its territory places

Turkey among the most irradiated European countries. Unfortunately the reliable figures representing PV installed capacity are not available.

In 2005 Turkey adopted a Feed-In Tariff law. The Energy Market Regulatory Authority in Turkey

bases the FIT rate on the average of the wholesale price announced in the previous year. In 2008 it

was: 0,08 EUR/kWh for industry, 0,09 EUR/kWh for domestic consumption and 0,1 EUR/kW for service sector. But in reality RES producers sell the electric energy the Market Financial Reconciliation Centre guaranteeing the minimum of 0,05 EUR/kWh over 10-year period.

There is also quite interesting incentive scheme featured in the Turkish law on RES. First of all there

is a quota system consisting on an obligation of each legal entity, holding a retail sale license, to purchase a specified amount of electrical energy RES. Certified producers installations can not

be older than 10 years. The quota is based on a comparison between the amount of energy sold by

that retail sale license holder, in the previous calendar year, and the total electric energy offered

for sale by all retail sale license holders inTurkey. All the costs related to state owned properties are

subject to 85% discount provided that they are used for renewable energy generation. Perspective of Croatia and Turkey ing the EU a realistic one and likely to influence far-sighted investors decisions. Strategic and growing, Turkish and Croatian markets should not be neglected while analysing European RES sector.

solarpvrising.com