Croatia’s wind fleet shows how an annual capacity factor can obscure the operational and commercial behaviour of a large portfolio of wind farms. Hourly generation varies sharply, creating challenges for the electricity system and financial exposure for market participants. The data also highlight the role of correlation between projects.
In January 2026, Croatia had 30 wind farms in regular operation, with total installed capacity of 1,237.15 MW. Two more projects, with combined capacity of 77 MW, were under construction or trial operation. The operating fleet generated 250,003 MWh during the month, giving it a capacity factor of 25.57%.
Hourly and daily output varied considerably. Croatian wind generation peaked at 958.83 MWh in the strongest hour of January and fell to 3.79 MWh in the weakest; daily production ranged from 1.79 GWh to 19.12 GWh. February continued the pattern: output reached 1,016.42 MWh in the strongest hour and fell to zero in the weakest, while the monthly capacity factor was 26.2%.
Forecasting and balancing exposure
For the electricity system, the variation presents a balancing challenge. For investors, it means a portfolio capable of producing around 1 GW in one hour may behave almost like a different asset several hours later. The financial effects start with forecasting, as wind farms nominate expected production before delivery. Traders can adjust positions through the intraday market as forecasts improve closer to real time.
Some deviation remains when actual output is measured, and the balancing system must absorb the difference. Who ultimately pays depends on the market and contractual structure. A wind farm may carry imbalance exposure directly, while a trader may take it on in return for a fee or a less attractive PPA price. An aggregator can manage several assets together, but variability still carries a cost even when the wind resource itself is free.
Aggregation does not automatically remove that cost. When projects are exposed to the same regional wind pattern, their output can rise and fall together, making the diversification benefit smaller than the number of assets might suggest. The relevant measure is correlation. Wind farms hundreds of kilometres apart can still have strongly correlated output if they are exposed to the same large-scale weather system, while assets in different wind regimes may offset each other over a smaller geographic area.
Portfolio design and project locations
Correlation is likely to matter increasingly for wind portfolios across Southeast Europe. Developers assembling several assets should assess not only each project’s P50 production but also the covariance between their hourly production profiles. Lenders financing a portfolio should determine whether the projects genuinely reduce volatility or simply aggregate correlated generation.
The same issue applies to power purchase agreements (PPAs). A corporate buyer sourcing output from several wind farms may expect diversification to create a relatively smooth delivery profile, but that assumption can fail if the plants respond similarly to regional weather. The portfolio may then overproduce collectively during strong-wind periods and underproduce during weak ones. Replacement-power exposure can rise precisely when market prices are high.
Transmission geography creates another form of correlation. Many Croatian wind farms are concentrated in coastal and southern regions with attractive wind resources. The Croatian Transmission System Operator (HOPS) reported that the operating fleet in early 2026 was concentrated particularly in Zadar, Šibenik-Knin, Split-Dalmatia, Dubrovnik-Neretva and Lika-Senj counties. Clustering can deliver economies of scale in project development while concentrating injections into common parts of the network.
The combination of correlated weather and shared grid infrastructure therefore warrants greater attention in asset valuation. Storage may eventually mitigate some variability, but it is not a generic solution. A battery intended to absorb brief forecast errors needs a different operating strategy from one designed for two-hour wholesale arbitrage. A battery used to firm a PPA may also require different power and energy characteristics from one primarily used for balancing services.
Access to balancing services
Croatia’s balancing framework is becoming more open. HOPS allows technically prequalified individual network users, aggregators, independent aggregators and renewable-energy communities to provide balancing services, subject to qualification and contractual requirements. This creates an opportunity to turn variability into flexibility. The starting point is understanding the physical behaviour of the asset.
Annual production smooths out the extremes, but debt, PPAs and electricity systems experience them hour by hour. For investors across Southeast Europe, the relevant questions are how often wind farms rise and fall together and what that correlation costs when the system has to respond.