INCENTIVE MECHANISM FOR BIGGER USAGE OF RENEWABLE

Abstract

Ever since the industrial revolution the social development has been founded on cheaper fossil fuels, neglecting how energy transformations increasingly affect the environment. The consequence has been the atmosphere pollution and global warming. In the beginning of 2007 the European Commission sent the Communication ";An Energy police for Europe” to the European Council and the European Parliament. That Communication is an important document in which the Commission considered many energy issues, with the goal of creating economy with high energy efficiency by 2050, with sustainable increase of production from renewable energy sources and development of energy technologies of the future. In the European Union today the electricity production from renewable energy sources ranks third and these sources have a great potential of growth, with clear advantages in the sense of environment protection. Today Croatia cannot produce enough electricity to cover its own needs, so it imports on average 30% of electricity per year. Taking into consideration potentially large possibilities of renewable energy sources, the Croatian approach to the development of the incentive mechanism for greater electricity production from the renewable energy sources is elaborated in the paper. It is estimated that Croatia could increase its electricity production from the renewable energy sources by 532 GWh in the course of the next two years, which would cost 16 million EUR (in order to cover higher costs of such production). Therefore an incentive mechanism needs to be developed and implemented that would ensure that the electricity price of one kWh produced from the renewable energy sources is as low as possible.