Analysis of incentives approach to renewable sources and cogeneration

The current feed-in tariff system for renewable energy sources and cogeneration in Croatia stimulates privileged producers exclusively for electricity delivered into the grid, both on transmission and distribution levels. Hence, the electricity consumed on the power plant site is not stimulated by the current feed-in tariff system. Therefore, most privileged producers, in order to receive incentives for entire electricity generation, have to deliver all of the generated electricity into the grid and separately buy the electricity from the electricity distribution company which requires significant supplementary investments. Furthermore, overall losses in electric grid are increased. This paper analyses the current feed-in tariff system and proposes an enhanced tariff system which allows metering of the generated energy. This, with on-site consumption metering or metering of electricity delivered to the distribution network, enables separate billing of electricity consumed at the plant site and delivered into the power grid. The paper analyzes the power flows and losses in the nearby electric grid in the current and proposed incentive system in three real-case scenarios.