Private investments profitability in the Croatian liberalized energy market

Abstract

Electricity deficit in Croatia requires significant investments into new production capacities in order to satisfy future rising needs. Due to, the lack of investments and more than thirty years old production power plants, investments in new production capacities are the most important prerequisite for future economic growth and development in Croatia. In order to estimate investment profitability of a new gas power plant, spark spread analysis based on historical spot prices has been done. Profitability of the independent power producer and feasibility of such market oriented investment has been analyzed. Taking into account all relevant costs the investment effectiveness of a CCGT power plant operation on a fully liberalized Croatian energy market has been estimated.