The European Commission (EC) has agreed to finance a grid-integration project between Slovenia and Croatia with €40 million ($44.9 million). The project will be financed with funds from the Connecting Europe Facility (CEF), an EU funding instrument which promotes improvement of existing EU networks in the fields of transport, energy and digital services.

The EC said the smart grid project will improve the links between the electricity grids of Slovenia and Croatia, and drive renewable energy development across the region. Furthermore, the project is intended to allow smaller power producers to participate in the local market, and to include storage solutions in order to stabilize security of energy supply.

The grid-injection of renewable energy will be regulated through a new virtual cross-border control centre, that makes use of specialist IT infrastructure and software, says the EC, while all the applied technology is expected to have the potential to be used to connect other regional energy systems in neighboring countries around Europe.

The project will be implemented by the Croatian Transmission System Operator Ltd. (HOPS) and Croatia’s power distributor HEP ODS, and by Slovenia’s SODO electricity distribution system operator, d. o. o. (Ltd.) and state-owned electricity transmission company of Slovenia, Elektro-Slovenija, d.o.o. (ELES).

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Further interconnections of Italy with its neighboring countries, of South-East Europe with Central Europe and across the Balkan peninsula are identified as one of the main barriers for power exchange across Europe by the association of European electric transmission system operators (TSOs) ENTSO-E in a report released in December.

ENTSO-E, stressed that a lot more power grid is needed if the 2030 target of a 27% share of renewables set by the EC in the Winter Package must be achieved, and if pressure on high-voltage grids is to be reduced. Tensions usually occur, the report says, between European regions with a high potential for renewables and densely populated, power consuming areas in between.