POWER PLANT IN KRIŽEVCI DEVELOPMENT CENTRE AND TECHNOLOGY PARK
MAG. TIHOMIR HODAK
Despite the fact that Croatia has natural potentials for the use of renewable energy sources, unfortunately, exploitation of the same is at a disadvantageous level. On an annual basis, the number of sunny hours reaches 2500 hours on average, which places us in the top countries of the European Union. This is not reflected in the amount of photovoltaic systems installed in the Republic of Croatia. We are at the very bottom of the installed PV systems. Until 2016 Croatia has installed 50.3 MWp photovoltaic systems. Compared to some of the EU member states, like Slovenia 259 MWp, Slovakia 45 MWp, Bulgaria 1037 MWp, Romania 1371 MWp, Czech Republic 2047 MWp, Germany 41340 MWp. Additionally, 50% of all renewable energy projects belong to the so-called. Community energy, energy in the hands of citizens, projects that are either led by energy cooperatives or local government. The question is whether Croatian citizens do not want to invest and support renewable energy projects?
According to our research, 89% of participant in the survey expressed interest in investing in renewable energy sources and confirmed that if the project was led by an energy co-operative they will support it. After all, in their opinion it is of great importance that the RES project has a positive impact on the local environment.
The question now is why citizens do not participate in creating energy transition in Croatia and which is an obstacle to investing?
We have found that there is a link that connects quality RES projects and enables a simple, transparent and fast way of investing citizens.
At that time, we came up with the idea of utilizing a CROWDFUNDING as a tool that enables project initiators to reach the financial resources for the implementation of the RES, and allows citizens to invest in the same project and receive a return on funds.
Crowdfunding is an online call through an interactive web site aimed at mobilizing financial resources for a particular project.
Since no such model has been implemented in Croatia until then, we have decided to do this in a synergy modality with the local government. We have found such a partner in the City Administration of the City of Križevci and in the heads of the Križevci Entrepreneurial Center, a 100% owned company by the City of Križevci, which manages the building of the Križevci Development Center and Technological Park.
Crowdfunding based on micro loans means borrowing financial resources between stakeholders, in this case citizens and Green energy cooperatives.
Project Sunny Križevci roofs (Križevački sunčani krovovi) was created in cooperation with the Green Energy Cooperative as the holder of a group investment project and the City of Križevci and Križevci Entrepreneurial Center. The town of Križevci is the owner and founder of Križevci’s entrepreneurial center, founded with the aim of promoting entrepreneurship and creating a positive entrepreneurial atmosphere, strengthening of crafts and entrepreneurship in the area of Križevci and surrounding area in the administrative building of the Development Center and the technological park.
Our co-operative was founded in 2013. It counts 19 members who are experts, activists and practitioners with years of experience in the field of energy, economy, innovation, environmental protection, urban planning, rural development. Our motto is Energy in the hands of citizens, and the mission is to assist the public sector and citizens, and to develop, use and invest in renewable energy projects. Core business is a community energy, referring to decentralized energy production from renewable sources owned or operated by citizens, local initiatives, communities, local authorities, NGOs, farmers, co-operatives or small and medium-sized entrepreneurs locally creates a value that remains in a particular region.
The interest of the City and KPC is to achieve savings in electricity consumption and to encourage the local community to launch similar projects by setting up mini photovoltaic power plants with support from the Cooperative using its know-how in the field of renewable energy. This project set up an integrated photovoltaic power plant of 30 kW owned by Coop, located on the roof of the administrative building of the Development Center and Križevci Technology Park, which will primarily cover the needs of the KPC, as a user of the electricity building, and surpluses will be delivered to the network as agreed with supplier, by self-service model “customer with own production”, so called prosumer.
In Križevci we realized for the first time in Croatia a project for investments in renewable energy sources through group financing on a micro-loan basis. The model is set up according to the principle of a customer with own production, prosumer. The project is funded from energy savings over a period of 10 years, and the savings are included in the costs for energy and maintenance. The Green Energy Cooperative, as a cooperative and citizen-investor representative, gives solar equipment to lease KPC for 10 years. The obligation of the Cooperative for the duration of the lease agreement to maintain the solar equipment and the power plant in the correct condition and to perform the necessary repairs and regular service on it. During the term of the lease, the power plant remains the property of the Cooperative. After the expiration of the contractual period of the lease of the solar equipment, the power plant goes into the ownership of the City of Križevci and continues to make savings.
All investors sign a loan agreement with the Cooperative for 10 years, for which 4.5% of the annual interest on accrued funds is realized. The minimum amount of the loan was HRK 1,000.00 (one thousand kuna) per investor (150 €) , and the maximum amount of the loan is 10,000 kn (ten thousand kuna, 1500€) per investor.
Each investor in the Project signs as a lender a long-term and dedicated micro loan agreement with the Cooperative as a borrower. The loan repayment is paid in annual annuities over a 10-year contract with the first annuity being due for one year and three months after the day of the loan payment. The modeled system (30 kW) would meet some of the energy needs of an administrative building and realize monthly savings for the cost of electricity. Investment from citizens investors would return from the monthly savings. After 10 years required to pay for the investment, the system goes to City’s ownership and continues to make savings.
The sum of 230,000 kuna was collected within 10 days by 53 citizens of the investor. The solar system has been successfully installed and various delegations and interested citizens are visiting the photovoltaic power station itself.
Partners on the project, along with the City of Križevci, KPC were:
Energy Cities, Greenpeace, which has participated in campaigning and promotion, the European federation of energy cooperatives RESCoop, Terra Hub, Regional Energy Agency Sjever and the Solvis, photovoltaic factory in Croatia.
Creating the project itself required the modification of the business model and its adaptation to the existing Croatian laws. It is not the direct sale of electricity to the user itself, but it is about renting a solar device that then generates the electricity that is used at the location itself. The user pays a fee equal to the amount of savings. Refund of the loan to the investors is paid from this savings.
Citizens responses outperformed all our expectations. To this date we have received an interest from 150 citizens in the amount of over HRK 1,200,000.
The survey results show that 87% of respondents have a positive opinion of city administration compared to 38% of those who had prior to the Križevci sunshine campaign.
Based on the experience gained, we have come up with idea to launch an online investment platform for the RES by the citizens. The platform would use the project’s initiators to get financial resources and to prepare a financing project with the help of the Green Energy Cooperative.