Power policy

Slovakia aims for 19% renewables in final energy consumption and 27% in the electricity sector by 2030. It will likely reach the goal given the current policies and activities in force. Although Slovakia’s old fixed feed-in tariff scheme was cancelled in 2019, it remains in place for existing installations, with rates that are administratively adjusted every year. A new auction scheme aims to address the price volatility seen over the years across technologies. The country’s first technology-neutral large scale renewable energy auction was launched in February 2020 but cancelled on April 1 due to Covid-19. A new government has since been elected and no new auction has been launched. The legislative framework for holding auctions remains in place though. Slovakia also provides a bonus payment for the generation of the first 5MW (15MW for wind), which supports mainly small-scale installations. A new small-scale feed-in tariff (<500kW) is planned but no details are released yet. Renewable electricity consumption is exempt from the excise duty of 1.32 euros/MWh, and such projects benefit from priority dispatch to the grid

Power prices and costs

Slovakia's power prices are slightly lower than the European average, and broadly align with neighboring Austria and the Czech Republic. The country is part of the 'Central' area, which includes Hungary, Poland, and the Czech Republic. Wholesale and industrial electricity prices in Slovakia rose in 2016 for the first time since 2011, along with the EU average. While wholesale price decreased in 2020, industrial prices kept rising. The driver was upward pressure from gas prices, which increased as a result of rising demand from cold weather and reduced nuclear capacity in the region. Commercial and residential tariffs in Slovakia continued to rise in 2020, increasing the incentive for installation of small-scale solar PV systems.

Power market

Consumers have the legal right to choose a supplier, but the market is dominated by three major companies. New entrants are gaining some market share, but this is slow as prices are regulated for most residential electricity consumers.

The installed capacity is fairly evenly distributed among nuclear, coal- and gas-fired generation, and renewables (75% of which is hydro power). The largest producer is Slovenske Elektrarne (Enel), operating two nuclear, two coal-fired, 31 hydroelectric and two photovoltaic power plants, generating over 70% of the country’s total electricity production. In 2017, retirement of 1.61GW of large hydro and oil capacity caused a 2.5% drop in generating capacity in 2018. Growth recovered in 2020, with capacity 5% higher than two years before.

The government aims to reduce import dependence. However, its main tool to achieve that is through an 880MW extension of the Mochovce nuclear power plant – an extension that was started in 1985 but has been subject to several delays. At the end of 2020, the project secured a promise of loans from Italy and Czech companies. The government has also sought to improve power market integration, with short-term trading with the Czech Republic and Hungary starting in 2012, and the day-ahead market coupled with the Czech Republic, Hungary and Romania, opening in late 2014. Slovakia Interconnection is one of EU’s energy infrastructure priority projects, and hence has the advantage of speed and transparency.

Doing business and barriers

The most controversial topic around Slovakia’s power sector has been the sale of Enel’s 66% stake in the national utility Slovenske Elektrarne. In July 2016, Enel sold half of its stake to privately held Czech-Slovak energy investment group EPH for 375 million euros. The sale of Enel's remaining 33% stake for the same amount will happen once it completes its Mochove nuclear plant, that has faced delays and cost increases, leading to pressure from the Slovakian government.

Investment in Slovakia's clean energy sector has been limited by administrative barriers, policy uncertainty, and the focus on nuclear expansion. As an example, Slovakia has no utility-scale wind farms. In 2009, investors were unable to obtain permission for projects above 10kW from the grid operator (SEPS) which considers wind unstable and prone to price fluctuations. Meanwhile, smaller turbines are hindered by regulation and legislation, including that for protected bird sites covering 23% of the country. As for solar PV, the government only offers household subsidy for projects up to 10kW.

Slovakian Slovenske Elektrarne has seen total debt soar due to construction of a new nuclear unit.

EV market

Slovakia’s EV sales grew 46% from 2019 to 2020, while total car sales grew less than 1%. Since 2021, new passenger cars have to meet fuel economy standards of CO2 emission (95 g / km average). European emission targets have influenced carmakers to focus on electric mobility.

EV policy

Slovakia has a target of achieving 14% renewables in transport by 2030. To encourage EVs, motor vehicle tax is exempt for such vehicles. A new subsidy scheme is in force for battery electric vehicles and plug-in hybrid vehicles that cost up to 50,000 euros ($56,000), purchased within Slovakia and required to stay in Slovakia for two years. In addition to cars, light-commercial vehicles/vans up to 3.5 tons qualify for the subsidy with no vehicle price restrictions.

In July 2019, the Ministry of Environment of the Slovak Republic invited companies for the first time to construct AC charging stations for municipalities and local governments. The planned budget was 500,000 euros.

Buildings market

Slovakia aims to deliver economy-wide energy savings of 30.3% by 2030. From the beginning of 2021, all new buildings are required to be ‘nearly zero-energy’ (NZEB), meaning buildings that have a very high energy performance.

Buildings policy

Slovakia has a target of 19% renewables in heating and cooling by 2030. A heat pump purchase incentive program called Slovak Green Home, in which family homes and apartment blocks can apply for support for small renewable energy installations, has been running since 2014. Funding is available from the EU and the SlovSEFF III program, which is a credit line to promote the development of energy efficiency and renewable energy sources in Slovakia. The Slovak Green Renovation program incentivizes renovation of heating systems for owners of family homes older than 15 years. They will be able to receive a contribution of 16,600 euros.