Power policy

Slovenia aims to source 43% of its electricity from renewable energy by 2030. The 2020 target was set for 39%, but Slovenia is unlikely to have reached this, as the share of renewable electricity consumption remained at only 33% in 2019. The country has also committed to a 2033 coal phase-out.

The Slovenian Energy Agency annually publishes an open call for tenders for plants producing electricity from renewable energy sources and high-efficiency cogeneration for admission to the support scheme. All production facilities connected to the grid after 22 September 2014, could take part in the renewable energy tender scheme. For renewable energy plants commissioned before this, a feed-in-tariff in the form of a universal price was available.

The results from the latest renewables and CHP auction, announced in July 2020, saw wind projects securing most of the feed-in premium support, at 77MW. This compared with 15MW for solar and the remaining 5MW being biomass, CHP and hydro. The auction system is meant to provide investors with certainty. However, it lacks size in terms of budget and projects, procuring just only around 100-130MW per year with 10 million euros, limiting the renewables growth somewhat.

Power prices and costs

Slovenia's residential electricity prices saw an increase to 165 euros/MWh in 2019 after remaining steady at 160 euros/MWh over 2013-18. Following rising carbon prices, there has been upward pressure on power prices in neighboring countries such as Italy and Austria. Several power and gas companies in Slovakia have also pushed prices up. The substantial penetration of hydro and nuclear power in Slovenia helps keep electricity tariffs low for consumers, as wholesale prices remain low. With such a mix, the addition of wind and solar only help to keep costs low. The limited subsidies the government hands out typically get added to electricity bills in the form of taxes and levies.

Power market

Slovenia's capacity mix is dominated by nuclear and hydro plants, which together provide nearly three-quarters of the electricity consumed. According to the government's long-term strategy (known as the 'Energy Concept'), the reliance on nuclear will continue with a 20-year life extension to 2043 for its Krsko plant. In addition, growth in renewables is expected to continue, thanks to the support system and priority dispatch for these generators. The electricity market has been open to competition since 2007, with a variety of generators and retailers available to consumers. However, much of the market remains in the hands of state-owned players.

Doing business and barriers

Investment in clean energy over the last few years has been minimal, ranking last out of all EU member states in 2018. Investment levels should increase slightly, as the winning auction projects begin to close financing.

Unlike many European countries, Slovenia has seen power demand rising slowly in the last few years, providing the impetus for further build-out of generating capacity and/or interconnection with neighboring countries. Much of the country's hydro resources have already been exploited and, with high costs of new nuclear power plants, it is renewables that will likely benefit from this growth in demand. While the renewables subsidy program remains limited to small projects, developers may explore other revenue streams such as corporate power purchase agreements or PPAs.

The barriers to the roll-out of renewables are moderate, including the lengthy development process, lack of experience within government, and insufficient spatial planning. Such challenges are mitigated by the readily available information on the implementation process and payback time. The size and budget of the subsidy scheme will limit the deployment of renewables, unless a corporate PPA market emerges.

EV market

Electric vehicles, including plug-in hybrids, made up around 3% of passenger car sales in 2020. Although the share of EVs is small – only 1% of car sales were electric in 2019 – it is growing. In 2020, there was a total passenger EV fleet of around 3,600 battery electric vehicles (BEV) and 900 plug-in hybrids (PHEV) in Slovenia.

EV policy

Slovenia’s energy and climate plan for 2030 sets a target of 21% renewable fuels in the transport sector’s final energy consumption. This target can be met both by electrification and biofuel blending, but Slovenia also has a specific EV target: 17% of the passenger vehicle fleet and 12% of vans/lorries are to be electric by 2030.

Subsidies for battery electric and plug-in hybrid vehicles were introduced in 2017 – 7,500 euros for a BEVs and 4,500 euros for PHEVs. However, in 2020, the purchase incentives for PHEVs ended, and the subsidy for BEVs was reduced to 4,500 euros. BEVs are also exempted from paying the annual road use charge of around 100 euros.

Slovenia applies EU fuel economy standards. These limit average emissions across manufacturer's entire vehicle production. For passenger vehicles, these are 130 gCO2/km between 2012 and 2019, and 95 gCO2/km in 2020 and 2021. Both targets will be introduced gradually. In 2020, a manufacturer’s 5% most polluting cars are excluded from the calculation, while in 2021, all vehicles sold will be taken into account.

Buildings market

The heating of around half of Slovenia’s residential buildings came from burning biomass in 2019. Natural gas and oil have respectively supplied a steady 11-12% of residential heat over the past decade. The share of district heating has remained stable at 9% since 2010. Heat pumps met almost 4% of space and water heat demand in 2019, up from less than 1% in 2010.

Residential natural gas prices in Slovenia are at an average European level of around 0.5 cents per kilowatt-hour, similar to the U.K. and Belgium. Heating oil prices in Slovenia in 2021 were around 10% above the European average, at 0.98 euros per liter.

Buildings policy

Slovenia’s renewable energy target for heating and cooling of buildings is 41% of the sector’s final energy consumption in 2030. The 2020 target of 31% was met in 2012, only three years after the target was set.

Slovenia also has an energy efficiency target to reduce final energy use in buildings by 20% by 2030, compared to 2005 levels.

Slovenia has implemented the EU directive on Energy Performance of Buildings, which requires all new buildings to be “nearly zero-energy” buildings by 2021. Under the directive, energy performance certification of buildings was introduced in 2015.