ENERGY LIBERALISATION: Slovenian GEN-I and German RWE Begin Croatia’s Electricity Liberalisation

The Slovenian electricity trading company GEN-I started to offer its trademark ”Cheaper Electricity” to SMEs and households on the Croatian electricity market.  The state-owned Croatia Electric Company (HEP) will now have to face two competitors on the market, since German RWE announced its entry to the Croatian market earlier this month (see LPJ 039). GEN-I has been active in Croatia for the past four years, providing electricity to businesses and enterprises, such as the City of Zagreb and other city administration offices and institutions.

GEN-I announced that it will offer Croatian households and small businesses electricity at a price that is up to 30% less expensive than currently provided by Croatian Electra (HEP), guaranteed through the end of 2015, if clients sign a contract by the end of July.  GEN-I CEO Robert Golob said that Croatian households can already switch to GEN-I and can immediately expect electricity bills to be at least 12.5 % cheaper.   RWE responded by offering affordable prices to its clients that will be up to 12% less than those provided by HEP.

In the recent call for tenders to provide electricity to state institutions, the Croatian government accepted GEN-I’s tender (€16.3 million), which was the lowest bid; the contract entails providing electricity to 35 ministries and government agencies  for the next two years.

The Slovenian wholesaler plans to acquire 20,000 consumers in Croatia by the end of 2013, another 50,000 in 2014, and by the end of 2016 GEN-I’s goal is to have a 17% market share of the Croatian electricity market.  The company supplies electricity and gas to customers in Austria, Italy, Slovenia, Serbia, Macedonia, and Croatia with a total sales volume of 4.5 billion kilowatt-hours (kW-h) of energy per year. GEN-I also owns a half of the shares of the nuclear power plant Krsko in Slovenia (the other half is owned by HEP.)  Given that RWE is a 50% owner of the Plomin2 power plant and operates numerous power plants in the region, RWE is also a serious future competitor with the short-term goal of taking over 10% of the electricity market in Croatia.  This liberalisation is the first step of significant restructuring of HEP that still operates as a state monopolist.

It is expected that the next in line for liberalisation in Croatia will be the gas market, followed by the rail market and passenger transport, which will force positive changes within these sectors forcing competitive policies and trickling down significant benefits to the end consumer…

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