How energy cooperatives are empowering citizens in Croatia

Enlit Europe’s Initiate platform seeks to highlight startups and scaleups in the sector making an impact and driving change.

To this end, Smart Energy International spoke to a company on the cutting edge of the energy transition. Zelena energetska zadruga (ZEZ), based in Croatia, is capitalising on the growing concept of energy cooperatives, driving renewable energy uptake and empowering consumers to access affordable, clean power.

We spoke to Melani Furlan, community energy expert from ZEZ, about the company’s pioneering shift from startup to scaleup, as well as the opportunities and challenges they have faced.  

Please describe the concept on which your business is based

Zelena energetska zadruga (ZEZ) is a renewable energy cooperative and social enterprise based in Zagreb, Croatia. Our mission is to empower local communities through the utilisation of local resources. We encourage them to become and feel more in control, produce and consume their own energy, and make a positive impact – in terms of environment, climate change, local economy, resilience.

Do you see energy communities/cooperatives becoming a trend in Europe and how will this change the energy landscape moving forward?

A positive and steady policy environment for community energy was an important factor for the development of energy cooperatives in many countries in Europe. This is something that’s still lacking in Croatia, and our cooperative is dedicated to develop and test innovative business approaches and showcase how citizens and local communities can play an integral role in the energy market. We see huge potential for the participation of energy communities in Croatia in electricity generation and supply, collective self-consumption, demand flexibility, data management etc. 

Our aim is to bring innovation into the sector that has been stagnating in Croatia and utilize small scale solar to deliver multiple benefits for local communities: cutting energy costs in households, bringing new skills and jobs, enabling faster energy transition.

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At the moment, Croatia has one of the lowest shares of solar PV in the electricity mix in the EU (while having more than 2,300 sunny hours a year). Our survey shows citizens are interested to invest in solar for self-consumption in their households but face challenges finding the right information and lack administrative support. They get stuck in lengthy procedures. This is why we have launched “On the Sunny Side“, a tool for citizens where they can get help on every step of the process. It is a matchmaking platform that connects citizens with trusted installers and assures the citizens get full support and the best value for money.

By supporting the utilisation of solar in households, we look to fulfil some of the key roles that we believe cooperatives can and should have in the energy market: mobilizing citizens, providing support for new energy communities, collaborating with and supporting cities in developing and financing new projects.

What distinguishes cooperatives in the mind of people is the fact that they are created by the people for the people. Is this true also in your case and how do you help the members of the cooperative and your clients?

Cooperatives are organised in a democratic and transparent way. For us, it is important to integrate cooperative values and principles in all of our activities, driven by positive change and impact.

I believe what makes us different from other energy companies active in the solar market in Croatia, is that:

• We are impact-driven and incorporate cooperative values in all of our activities.
• We rely on social innovation and new technologies to encourage systemic changes.
• We are working on ecosystem development in collaboration with various groups of stakeholders, and collaborate with local authorities to help create resilient cities and independent local communities.
• We encourage citizens to actively participate in designing tools, services, policy recommendations and gain necessary knowledge on solar technology and entrepreneurial skills to unlock alternative finance opportunities.

We invest a lot of our effort in the communication and education of citizens, but also the market as a whole. In the past 12 months, we visited 13 cities in Croatia to promote the utilisation of solar energy in households and to engage local stakeholders. Since we launched in October 2020, we have received 800 expressions of interest through our platform On the Sunny Side and delivered more than 150 solar design projects for citizens. We now have 20 partners from different parts of Croatia, namely installers, joining the platform and discussing collaboration. In 10 months more than 3.500 people joined our online community Solarni klub.

Do you believe your business model is contributing to achieving the Green Deal as presented recently by the EU Commission and if so, how?

We believe citizens should be the driving force of the clean energy transition. With solar, citizens cut their electricity bills and power their households with a clean, local and renewable source of energy. Solar brings new jobs, community development and higher standards of living for all citizens.

Energy cooperatives in Croatia are an example of a suitable model to develop, finance and implement both small scale and utility-scale solar projects, mostly in line with the EU provisions on energy communities. Still, considerable changes in the current regulatory framework are required by the new EU framework to really empower citizens and local communities to enter the energy market as active players.

How difficult or easy is it to reach international levels for a scale up or a small company? What are the causes for it?

For a small company, it is important to continuously work on building and strengthening collaboration with partners and relevant stakeholders. We are always looking for opportunities to share our experience but also expand our services to citizens and local communities in the West Balkan region.

So far we have helped establish the first energy cooperative in Serbia, in city of Šabac, and supported the first crowdfunding campaign for a local renewable energy project in Bosnia and Hercegovina. We are exploring possibilities in collaboration with local initiatives, NGOs and international organizations to replicate our business model for roof-top solar through local communities and energy cooperatives – in Hungary, North Macedonia, Bosnia and Herzegovina.

What support/actions enabled your scale up from start-up?

Strong partnerships are crucial – we are part of various networks and hubs, and collaborate with local authorities in Croatia and European communities such as EIT Climate KIC, REScoop.eu and Energy Cities on regular basis.

We appreciate an immense opportunity to grow through HORIZON 2020 projects such as COMPILE, REDREAM, NUDGE, I-NERGY – where we learn and explore how to move the consumer (citizen) participation to the centre of the energy market through the utilisation of new technologies (such as demand-side management or artificial intelligence).

For initiating, testing and upscaling our services for citizens on the “On the Sunny Side” platform, we received support from EIT Climate KIC in 2020, and from Google.org Impact Challenge Central and Eastern Europe in 2021. Also, we got a boost from collaboration with commercial partners such as Raiffeisen bank.

How did you come to decide on starting this business and when did you reach the point of being labelled a scale-up?

ZEZ was established in 2013 by a group of energy experts and community energy enthusiasts that were previously working together in UNDP projects in Croatia. Today, we are 18 experts, practitioners and enthusiasts in the field of energy, economy and environment protection, on a joint mission: to help citizens and cities become the driving force of the clean energy transition.

I would say ZEZ is on a good path to become a scale-up, but we’re not quite there yet. This is because a big part of our revenue is still coming from participating in EU funded projects.

Community energy, including energy cooperatives, is still an underdeveloped concept in Croatia, but we can proudly say we have so far developed, implemented and tested different approaches in local communities in Croatia (Križevci, Prelog, Varaždin to name a few) and across borders.

What role do you think scale-ups can play in the energy transition?

Scale-ups can support the energy transition by encouraging and inspiring new ideas and initiatives, start-ups looking to bring their innovative service to the energy market. Scale-ups can use their large pool of customers and followers to further educate the market and promote innovative concepts and solutions to the public.

What are your next steps and future plans?

Our vision is 100,000 solar roofs in Croatia by 2030, which would mean that 10% of households in Croatia will produce and manage their own energy. So far, there are only around 1.000 roof-top solar systems. We want to encourage and contribute to achieving this vision for our country.

We will continue to upgrade our services and support citizens in becoming owners of their own roof-top solar, to use their systems more efficiently and to encourage them to play an active role on the market as individuals or through participation in energy communities. We are exploring possibilities for peer-2-peer trading and energy sharing within an energy community, and developing business models and recommendations for decision makers to enable it. This is important, because these concepts have not yet been introduced in the Croatian regulatory framework.