Croatia’s amended Electricity Market Act entered into force on October 15, 2026, introducing changes that extend beyond conventional electricity-market reform. The measures affect how industrial flexibility can be monetised, who can prepare key grid-connection studies, and the duration of legacy connection agreements when projects do not advance. The legislation is designed to increase commercial value tied to access to customers, grid information and connection capacity.
A central element of the reform concerns independent aggregation. Croatia now explicitly allows aggregators to participate in wholesale electricity markets, balancing markets and ancillary-services markets without requiring consent from other electricity-market participants. The change strengthens the legal separation between electricity supply and flexibility services.
Independent aggregation for industrial flexibility
Under the amended framework, an industrial consumer can continue buying electricity from one supplier while contracting another company to optimise flexible consumption and monetise that capability in electricity markets. The distinction matters because many industrial consumers already operate equipment that can alter electricity demand without disrupting production processes. Flexibility options listed in the reform include industrial refrigeration, pumping systems, HVAC equipment, electric boilers, compressed-air systems, cold storage and, eventually, EV fleets.
The customer does not need to become an electricity trader for demand response participation. Aggregators can combine dozens or hundreds of relatively small loads into a portfolio large enough for commercial participation. A factory able to reduce consumption by 2 MW for a limited period may have limited incentive to build its own market-access infrastructure, while 20 similar factories could represent 40 MW of flexibility.
The reform specifies that an aggregator’s key assets are software, metering, telemetry, customer contracts and access to electricity markets rather than physical generation. It also addresses fixed-price supply arrangements by stating that customers with fixed-price electricity contracts cannot be excluded from demand-response participation due to the fixed nature of the supply price. This creates two separate commercial relationships: suppliers handle commodity procurement and billing, while aggregators monetise the customer’s ability to change consumption.
Operational requirements for flexibility markets
The separation between supply and flexibility services is expected to shape competition in industrial electricity services. The framework also introduces regulatory and operational challenges related to delivering flexibility actions in practice. Flexibility needs accurate measurement, baselines must establish how much electricity a customer would otherwise have consumed, and metering and settlement systems must confirm actual delivery.
Balancing responsibility must be allocated when an aggregator’s actions change the customer’s power position. While the legal framework creates the market right for flexibility services, technical rules determine how easily participants can exercise those rights commercially.
Independent grid-connection engineering
Croatia’s reform also opens a separate market for independent grid-connection engineering. System operators are required to publish lists of companies and authorised professionals permitted to prepare EOTRP connection studies alongside operators themselves. Where an authorised external provider prepares the study, the relevant system operator must provide necessary network-condition information within 30 days of a qualifying request.
The change introduces additional competition into connection analysis that has traditionally relied on transmission and distribution operators because they control technical information needed to understand system conditions. Engineering consultancies could develop specialised capabilities covering connection feasibility, network modelling, technical due diligence and project-readiness analysis. For developers, independent connection engineering can improve transparency around risks that arise when attractive projects fail economically due to substantial reinforcement needs or long delays.
Banks and infrastructure investors may also benefit from independent technical review during project due diligence. A lender financing a generation project faces not only construction risk and electricity prices but also whether the project can connect on time and on economically acceptable terms. The reform does not provide unrestricted access to operational grid data; information remains subject to statutory processes and system-operator controls.
Time limits for legacy connection rights
The third major change concerns legacy grid-connection rights under agreements concluded before the amendments. Connection agreements without a defined final connection deadline must now be terminated within four years of the legislation entering into force, creating an outside deadline of October 15, 2030. The rule applies a timeline to projects that retained connection positions for years without reaching construction.
This shift affects decisions by developers holding older connection agreements about whether projects can realistically advance within the new timeframe. Some may accelerate permitting, financing and procurement, while others could seek partners or sell projects to investors with stronger balance sheets. Projects that cannot demonstrate credible progress may lose their connection positions, potentially releasing capacity for more advanced developments.
The reform’s commercial implications extend into mergers and acquisitions through changes in how connection rights are valued over time. Investors evaluating acquisitions need to understand when a connection right expires, which milestones remain outstanding and how much capital is required to preserve it. A project with land and permits but a weak connection position may have substantially lower value than a comparable project with a secure and enforceable grid route.
Transitional reapplication window for expired approvals
Croatia’s transitional regime adds an immediate element for certain developers whose energy approvals expired because connection agreements could not be concluded under specified circumstances. Those developers can reapply within 30 days of October 15, relying on previously submitted documentation and without paying the normal approval fee. The window is described as narrow.
For qualifying projects, recovering an approval could preserve development expenditure already invested; for developers that miss the deadline, consequences could be significant. Overall, the reform strengthens rights for independent aggregators to commercialise flexibility and creates routes for engineering companies into connection-study work while increasing pressure on developers holding grid capacity to demonstrate that projects are real.
The legislation links these changes through a broader shift in how value is generated in the electricity sector: away from physical generation alone toward access rights, information and control. An aggregator creates value by controlling when customers consume electricity; an engineering firm creates value by understanding how a project can connect to the network; and a developer creates value by securing and preserving a credible grid position.
The act indicates that traditional utilities will remain central while operating alongside independent aggregators, software companies, technical advisers and investors specialising in grid-access assets. It also notes that aggregation still requires technical qualification and settlement rules, external engineering providers require formal authorisation and access to appropriate grid data, and legacy connection agreements need individual review as part of implementation under the amended framework.
