Energy efficiency in Croatian residential and service sector - Analysis of potentials, barriers and policy instruments

Energy efficiency is recognized worldwide as a single most powerful and cost-effective way for achieving goals of sustainable development. Energy efficiency being typically demand side option is hard to implement and requires carefully defined approach, i.e. policy interventions are needed to fulfill existing potentials for cost-effective efficiency improvements. In the light of recent trends in energy sector, especially liberalization and competitive market orientation, policy measures to enhance energy efficiency improvements should shift from strictly end-users oriented approach towards whole market approach. Optimal policy instruments mix should be designed to fulfill the existing energy efficiency improvement potentials and shift markets towards more energy efficient products and services. This paper addresses the energy end-use efficiency potentials in Croatia with special emphasis on residential and service sectors. It analyses the process of designing, implementing and evaluating policy instruments based on the results of the on-going UNDP/GEF project "Removing barriers to improving energy efficiency of the residential and service sector". The analysis of energy efficiency market development and transformation in the Republic of Croatia is given and future actions needed emphasized.