Investments in Croatian RES Plants and Energy Efficient Building Retrofits: Substitutes or Complements?

Abstract

Croatian energy strategy defines ambitious goals aimed at achieving energy transition toward a sustainable low-carbon society. Achieving those goals requires significant investments in the renewable energy sources and improved energy efficiency of buildings. The purpose of this paper is to estimate and compare the economic effects of the energy transition on the renewable energy supply and demand side. The estimation of the energy transition effects in Croatia in the period 2020–2050 is based on the input-output model, which identifies direct, indirect and induced effects of investments in renewable energy sources and energy efficient buildings renovation. Results of the study reveal relatively higher gross value added and employment effects induced by investments in building retrofits, but the effects of investments in renewable energy are also significant. Investments in sustainable, efficient and environmentally effective energy system could significantly contribute to Croatian GDP. While GVA effects range from 0.4% to 0.6% of annual GDP, the share of full-time equivalent jobs induced by energy transition could reach 0.5% to 1% of total employment in Croatia. Investments in RES plants and energy efficient building reconstruction are not substitutes but complements which ensure a smooth energy transition if undertaken together.