Development of electricity market in Republic of Croatia was dealt in this paper. Electricity power industry has been acted as a natural monopoly, but this type is not viable at the present time. Development of electric power industry lead to idea of creating electricity market where various power producer could compete and consumers could choose their distributors or large consumers directly could choose their electricity producer. During the period 2000-2010 in Republic of Croatia came to the structural separation of electric power industries. Structural separation emerged following entities: HEP – Production, HEP ODS – Transmission System Operator later renamed HOPS – Croatian Transmission System Operator, HEP ODS – HEP Distribution System Operator, CROPEX – Croatia Marketplace electricity. The first day of launch markets for the day ahead at CROPEX was held on 10 Februrary 2016 in cooperation with Nord Pool (Europe's leading stock exchange electricity market). Simulations in Power World visible certain indicators concerning important factors for investment decisions in new production capacity. They can be distinguished in 3 factors: energy source, location and limits of power system. Energy source affects its cost and availability of the electricity price. If the energy source is expensive more expensive will be the production and if is the energy source farther away from the plant higher will be costs and production price will be higher. In the simulations that were carried out it was not possible to enter, because of the limitations of the program, all costs associated with the plant. Location also affects the cost of production. If the new plant is located in area where there are more power plant in a small area itis more likely that they will produce less power than that in the area where there is no competition. Limitations of the power system related to the transmission power lines. Transmission power lines determines how much electricity we can transfer with certain transmission line, therefore, is more cost-effective to invest in a power plant that is located closer to consumers.