Energy sector and sustainable economic growth in terms of low-carbon economy

Project leader:

Prof. Nela Vlahinić Lenz, PhD - EFRI

 

Team members: 

Prof. Saša Žiković, PhD - EFRI

Barbara Fajdetić - PhD student EFRI

 

Summary

Since sustainable economic growth is strongly correlated and determined by stable energy supply, the role of energy sector is crucial, not just for the security of supply, but as well as for the impact on energy prices and prices and competitiveness of all goods and services. In order to have available and price competitive energy supply, energy sector has to improve its technological development and competitiveness and to adapt according to demanding climate and environmental regulation. Energy sector is going through big changes – economic, regulatory and technological ones. Market circumstances are changing due to liberalisation, regulatory reforms and institutional arrangements which define stricter environment and climate standards. The most important factor is technological development that changes business paradigm, lowers costs and prices of renewable energy exploitation and enables transition towards low-carbon economy. In November 2016 the European Commission presented the Winter Package that will cause huge changes in Croatian energy sector and hopefully lead to sustainable economic growth. New shifts in energy production mix can be expected - the decrease in the share of fossil fuels and increase in the share of renewables with the growing focus on energy efficiency. In such circumstances, energy cannot be cheap and it will influence the cost structure and competitiveness of national economy. Therefore, the crucial question is whether it is possible and at which price and consequences to reach economic growth and energy development with the 80% decrease in GHG emissions till 2050. The research within this project is based on the hypothesis that the transition towards low-carbon economy will result with the structural changes in energy and other sectors, while new emerging industries and services can surpass transition economic costs and thus speed up economic growth that would be environmentally and socially sustainable.