STA, 16 December 2019 - The government appears prepared to making construction of a new nuclear reactor a cornerstone of Slovenia's plans to achieve carbon neutrality by 2050 in line with EU goals. Prime Minister Marjan Šarec told parliament on Monday that without unit two at the Krško nuclear power station, the goal would not be achieved.

"The fact is ... that if we don't build a second reactor at the nuclear power station and close coal-fired power stations, we will not achieve environmental goals," Šarec said during questions time. "Things are very simple or very complicated, depending how you look at it."

In summer, Šarec re-ignited a long-simmering debate about the replacement of the existing reactor at Krško, which is currently slated for closure in 2043 but whose useful life could yet be extended.

At the recent EU summit he reiterated the commitment to carbon neutrality and said achieving it would require preserving nuclear and abandoning coal; Slovenia has only one coal-fired power station, in Šoštanj, and a backup gas-fired power station in Brestanica.

The dilemma whether or not Slovenia should go for nuclear is expected to be resolved in the long-term climate strategy until 2050 and the national energy concept, key documents laying out Slovenia's energy future, which have both been delayed for years.

Šarec defended the delay today saying that it was "impossible to change in a year what had not even been under consideration for twenty years before."

All our stories on nuclear power in Slovenia are here

STA, 4 December 2019 - Wind power facilities in the EU satisfied 14% of energy needs last year, up 2 percentage points compared to 2017. Slovenia lags significantly behind in unlocking the potential of wind energy. Despite available grants and investors showing interest, problems arise in particular when a location for a new wind farm must be found.

There are only two operating wind turbines in Slovenia - a 2.3-megawatt and 0.9-megawatt installation, both in the south-west near the Karst plateau Nanos, and investors of both had faced resistance by certain local communities while obtaining permits and putting the turbines in place.

Some locals were concerned over potential health issues caused by low frequency noise emitted by wind turbines. They were also bothered by wind farms changing the landscape.

Last year, the output of the two wind turbines was equivalent to just 0.04% of Slovenia's energy consumption, Energy Agency director Duška Godina has told the STA. They generated six gigawatt hours of electricity, a tenth of one percent of total renewables production in the country.

The statistics show Slovenia ranks near the EU's very bottom in exploiting wind power resources, only Malta and Slovakia are worse.

On the other hand, countries excelling at tapping this potential are Denmark (41% of energy consumption), Ireland (28%) and Portugal (24%).

Slovenia's wind energy potential not ideal

Even though Slovenia seems to be far from a perfect destination for capitalising on wind energy - the country lies in central Europe, far from the wind-swept Atlantic Ocean and not close enough to the vast Pannonian Plain - research shows it is still windy enough to effectively implement wind power technology, according to the Wind Energy Association.

The Infrastructure Ministry agrees that the wind energy potential in Slovenia is not ideal or comparable to other countries', but the potential is there and if tapped, could be economically beneficial.

It has told the STA that "this has been proved by wind measurements and the investment programmes which have already been created by potential investors so far", adding that Slovenia has "a lot of opportunities for tapping the wind energy potential".

Interest in building wind farms exists

There are currently eight national spatial plans for wind farms in the process of development at the Environment Ministry, of which three wind farms are planned in western Slovenia and five in the east.

All the projects are in the preparation phase; however, some local communities are already up in arms, making obtaining permits more difficult.

Renewable energy resource projects also also supported by the Energy Agency's existing feed-in tariff scheme. A total of 166 projects have been selected in four open calls published so far, of which 62 are wind farm projects totalling 215 megawatt.

Permits, wind farm location main stumbling blocks

According to Godina, the wind turbine siting stage is when things get complicated. During the last open call for new renewable projects for the feed-in tariff scheme, building permits were added as a condition for applying to ensure that the submitted projects were more viable.

The move resulted in applications for major wind projects drying up, said Godina.

She urged the state to promote a broad social consensus on the siting of renewable energy infrastructure and adopt measures that would ease and speed up administrative procedures.

According to the Infrastructure Ministry, the National Energy and Climate Plan, which is in the making, will back such initiatives. "If only one wind farm comes to fruition, it would prove it is possible to do it in Slovenia and serve as a great encouragement for future investors."

STA, 19 November 2019 - The Ljubljana-based energy equipment maker Kolektor Etra has acquired the Polish company Weltech for EUR 7 million in what the company's management sees as a key acquisition in terms of market share, with Kolektor Etra outbidding two rival companies and two financial funds, the business newspaper Finance reports.

Based in Myslowice near Katowice and employing 180 people, Weltech last year generated EUR 9.6 million in revenue and operated at a profit.

It produces power tanks and traction tanks, with its key clients including Germany's Siemens and France's JST Transformateurs, the latter being its previous majority owner.

Peter Novak, the commercial director of the Slovenian manufacturer of power transformers and power generator transformers, has told Finance that four more bidders had been in play to acquire Weltech.

It has outbid two industry rivals - Siemens and SGB - and two financial funds, Novak said, adding that the interest had been high as it was hard to find good and reliable suppliers of power tanks as one of the key components of power transformers.

According to Kolektor Etra director Tomaž Kmecl, producers of tanks are actually dictating the market, while Novak added that Weltech was punctual and reliable and was one of the best power tank producers in Europe.

The acquisition cost EUR 7 million, with a 51% stake going to Kolektor Etra and the remaining shares to three companies from the Kolektor group.

Asked whether there was concern about Siemens ceasing to order tanks from Weltech now that the rival company had acquired it, Novak said that nothing implied that Siemens had "something against us becoming owners of the Polish plant."

Even if Siemens indeed reduced its orders from Weltech, Kolektor Etra's "demand for tanks is higher than planned, so they will be supplied by our new Polish factory."

Kolektor Etra generated 90% of its revenue on foreign markets, with the Nordic countries accounting for almost half of the exports or 40% of total sales.

Last year it surpassed the EUR 100m mark in revenue and posted a EUR 4.5 million net profit, while plans for this year is to reach EUR 110 million in revenue.

In the summer, Kolektor Etra signed a deal to produce, supply and install seven 400 kW power transformers to the Finnish national grid operator Fingrid by 2023. Worth EUR 20 million, it is the largest in the company's history.

STA, 18 November 2019 - National grid operator ELES officially launched in Beričevo on Monday a high tech diagnostics and analytics centre that is meant to enable a systematic approach to energy infrastructure management.

The primary goals of the centre, whose costs so far have amounted to EUR 730,000, include the planning, construction, expansion, modification and maintenance of energy infrastructure, the head of the centre Uroš Kerin told the press.

By making use of the digital potential, the objective is to monitor the efficiency of the network in real time, optimise costs and also find optimal solution in crisis moments.

Kerin explained the energy sector was being affected by a number of new trends, including new energy sources, new technologies and digitalisation.

New players are emerging on the market that are no longer only using the network as a source of energy but as a means for activities while power production is no longer only passive.

"The network is getting older, which is why it will be necessary to think about modernisation and due to new players also about voltage changes," Kerin said.

The new diagnostics and analytics centre, which will bring together experts from various disciplines, will be of help as these decisions are adopted.

STA, 8 November 2019 - The supervisory board of energy trader Petrol, which has been subject to mounting criticism in recent weeks for failing to explain October's unexpected management board overhaul, said on Friday the former management had never put forward credible documentation to support plans that substantially departed from the company's strategy.

The explanation comes after the supervisors cited "significant differences of views with respect to the implementation of the 2018-2022 strategic business plan" on 25 October and later argued the former management did not consent to the disclosure of detailed circumstances.

Friday's press release says the Tomaž Berločnik-led management had been urged on several occasions to draw up credible documents that would allow the supervisors to take an informed decision.

This was done because "the material contained errors in the magnitude of several hundred millions when it comes to calculated cash flow and the amount of new debt needed to finance the investments".

"The supervisory board assessed the material to be misleading, which is why it was unable to adopt any decisions on its basis."

The supervisors wrote that the management's plans departed from the strategy until 2022 in that they involved "multifold" increases regarding the size of the investment and the sources needed to finance it.

The supervisors added the documentation had been supplemented several times as a result of the doubts expressed, "but the remarks and demands of the supervisory board for additional explanations and corrections were not observed".

They are confident the documentation was misleading in that it presented a substantially incorrect amount and type of credit, including costlier subordinated debt.

"The importance of the dynamics and size of the planned investment and the associated risks are also highlighted by Standard & Poor's Rating Services in its credit rating justification, where it notes the key risk of major investment (in the amount of EUR 521 million in line with the adopted strategy) in the coming years, mostly outside of the company's core activities," the supervisory board wrote.

The former Petrol management board retorted by accusing the supervisory board of withholding information.

"We have consented to the disclosure of agreements on early termination to secure equal access to information to the shareholders. Clearly the supervisory board is withholding the content of these agreements so that it can offer its positions to the public," the former managers said in a message circulated by the Zdolšek Law Firm.

"The shareholders' meeting is the body which decides on disagreements between management and the supervisory board when they occur. We hope to be given the opportunity to explain our positions."

Explanations regarding the 25 October management overhaul were recently also requested from the supervisors by the government through the SSH state asset custodian.

SSH announced a shareholders' meeting by the end of this week after assessing the scarce additional explanations provided on 30 October as insufficient. The supervisors in turn said they would discuss the call for a shareholders' meeting at their session next Thursday.

Media reported last week that a legal opinion drawn up for the supervisors had revealed the management had changed the sum total of the planned investment several times. The fresh debt needed to finance it was put at around a billion euros, twice the sum envisaged in the 2022 strategy.

The supervisors subsequently explained they had not approved this and that the strategic plan remained unchanged.

STA, 25 October 2019 - The entire management board of energy group Petrol resigned Thursday night "by mutual agreement", capping a day of intense speculation about its fate amidst what media reports describe as a politically-motivated struggle to control one of Slovenia's largest companies.

Long-serving chief executive Tomaž Berločnik stepped down alongside board members Rok Vodnik and Igor Stebrnak, over what Berločnik told the press were "differences in views on strategy" with the supervisory board.

This was today confirmed by chief supervisor Nada Drobne Popović, who said in a release "the management and the supervisors had a significantly different view on the implementation of the adopted strategy".

The company will be led in the interim period by Drobne Popović along with director of strategic cost management Denijela Ribarič Selaković. Also saysing on is the board member representing workers.

The move came after a supervisory board session that had not even been announced; when first speculation appeared yesterday morning, Petrol even went as far as issuing a press release saying the management had no knowledge of a supervisory board session taking place.

Drobne Popović later said the session had been an extension of a previous supervisory board session.

Media were abuzz with speculation about the true reasons for the overhaul at the top of Petrol.

Public broadcaster TV Slovenija thus reported the management and supervisors clashed over a bond issue necessary for the takeover of three energy firms in the Balkans.

And the business daily Finance reported "problems with a project that would significantly alter the image of Petrol" as the cause, though it also suggested this was a cover for what was in fact a politically motivated replacement.

This possibility was also raised by the Manager Association, which issued a statement prior to the resignation warning against replacing a successful board.

"By bringing down a successful management team, those who want to replace them - politicians in power - would send the indirect message that they do not care about social prosperity and the fate of Slovenia's largest company."

It said it was "strongly against a political replacement of the management board as well as political games which all too often damage the economy and society".

It also pointed to the importance of stability and predictability of the business environment and of good corporate management for companies.

The association moreover believes yesterday's decision made no sense in particular in the light of Petrol positive results.

Meanwhile, the Slovenian Directors' Association expressed surprise over the management overhaul, saying that such an extreme step was usually justified.

"A justified reason must exist; if it does not, then this is careless actions," Irena Prijović, the association's executive director, told the STA on Friday.

She could not comment on whether the move was political, but added that if indeed it was, that would be unacceptable.

Chief supervisor Drobne Popović rejected claims she had acted on behalf of political actors and said she had not consulted any politicians.

Prime Minister Marjan Šarec wrote on Twitter yesterday afternoon, before the resignation was announced, that the notion his party wanted to replace the Petrol management was "one of the biggest pieces of disinformation recently".

The government discussed the step at today's correspondence session and called on Slovenian Sovereign Holding (SSH), the state asset custodian, to provide detailed clarification of the circumstances of the resignation by 4 November.

Earlier today, the opposition New Slovenia (NSi) requested an emergency session of the parliamentary commission on public finances to discuss corporate management at state-owned companies and political staffing.

The party also proposes that the Commission for the Prevention of Corruption investigate possible corruptive means in resignation or appointment of state companies' management and supervisory boards.

Berločnik was named chief executive in February 2011, when Petrol was reeling from a financially disastrous attempt to take over rival Istrabenz, and his second five-year term would have ended in 2021.

He is credited with transforming a traditional fuel retailer into an all-round energy group with a strong electricity division and increasing clout in retail.

Less than a month ago, the Manager Association named him the manager of the year.

Petrol has been going strong. It saw its sales revenue rise by 15% to EUR 2.73 billion in the first six months of the year, with net profit up by 4% to EUR 40.7 million from the same period in 2018.

STA, 14 October 2019 - Slovenia met 52% of its energy needs by own sources of energy in 2018. Of the 148,000 terajoules (TJ)) in total energy production, the Krško Nuclear Power Plant (NEK) accounted for 42%.

Renewable sources of energy, including hydro-power, contributed 32% to the output and coal 25%. Other sources represented less than 0.5%, the Statistic Office reported.

Petroleum products represented a third of energy supply (34%), with nuclear accounting for 22%, renewable sources (including hydro energy) for 17%, coal for 16% and natural gas for 11%.

Final energy consumption totalled 211,000 TJ, 40% of which was consumed in the transport sector, 27% in manufacturing and construction, 21% by households and 12% by other consumers, including agriculture.

Almost half of the final consumption was covered by petroleum products (47%), followed by electricity (24%), renewable energy (13%), natural gas (12%), heat (3%) and solid fuels (1%).

Slovenian households consumed 44,600 TJ of energy, by far the largest share (61%) for home heating. A further 17% was consumed for each lighting and electrical appliances and water heating, 4% for cooking and less than 1% for cooling.

Households depended on wood fuels for 39% of their consumption, electricity for 27%, natural gas for 10%, extra light heating oil for 9%, district heating for 7%.

They got 3% of their sources from ambient heat, obtained by means of heat pumps, and as much from liquefied petroleum, and only 1% from solar energy.

More details on this data can be found here

The covers and editorials from leading weeklies of the Left and Right for the work-week ending Friday, 27 September

Mladina: If Germany can rescue its companies, why can't Slovenia?

STA, 27 September 2019 – Mladina, the left-wing weekly, criticises Slovenian governments for failing to protect the interests of Slovenian companies, including Adria Airways, saying they usually give EU rules as an excuse not to act, whereas engines of capitalism such as Germany always help their companies. What is more, they are indirectly buying Slovenian companies.

Due to the government's inactivity, nearly 600 Adria staff will lose their jobs and at least another 600 jobs will be lost indirectly, while the budget will suffer a loss of EUR 20 million, the weekly says in its editorial on Friday.

When Economy Minister Zdarvko Počivalšek met on Wednesday a group of Adria workers who are seeking a solution, he said the state was not indifferent to its troubles, and mentioned Adria's irresponsible owner, which had put at stake the company's operating licence.

But it is surprising he became aware of Adria's troubles only now when the rest of Slovenians realised how deeply in trouble it was much earlier, and that he forgot to mention he was the economy minister in the Miro Cerar government, which sold Adria to Germany's 4K Invest in 2016.

At the time, the government argued the sale would enable Adria to "develop, expand and provide for Slovenia's new links to the world", and those who warned this would not be the case because Adria was sold to a speculative venture capital fund were said to be ignorant of the very basics of capitalism.

When Počivalšek visited Adria, Germany announced it would help the airline Condor get a loan to prevent its bankruptcy. Two days before the German rescue effort, former Adria director Peter Grašek proposed a similar solution for Adria to the Slovenian government.

But the government is actually not seeking a solution, it is waiting for the situation to calm down so that it may start pointing fingers and complain about its hands being tied by EU rules. Yet, the same rules do not prevent Croatia or Estonia to help their airlines, or Germany to immediately rescue an airline or car factory when in trouble.

Mladina says that Slovenia's national airport operator Aerodrom Ljubljana was not sold just to any company in 2014, it was sold to Germany's Fraport, which is indirectly in majority ownership of Germany.

"Isn't it strange that we are being constantly told it is vital to sell companies and banks for the state to be successful and efficient, while at the same time it always turns out that the countries which are considered the culmination of capitalist efficiency and success, are buying our companies and banks?"

What is more, they purchase our companies in collaboration with their private companies, Mladina says, noting Fraport is partly owned by Lufthansa, the airline which will most certainly take over Adria's business.

Mladina says it is clear Počivalšek knew Adria was sold to speculative funds which would drain it. And as prime minister, Alenka Bratušek also knew airport operator Aerodrom was actually bought by the German state.

"She also knew that as soon as the national airport is sold, there will be an end to the complementarity between the airport and Adria, which will be fateful for Adria in five years' time," editor-in-chief Grega Repovž says in They Knew.

Reporter: Bratušek attempting power grab in corrupt energy sector

STA, 23 September 2019 - The right-wing weekly Reporter says in Monday's commentary that a recent failed attempt by Infrastructure Minister Alenka Bratušek to be given the final word in the appointment of executives at two state-owned energy companies had not been about wanting to end rampant corruption but merely about trying to seize control over it.

While managing to subjugate SODO, the state-owned electricity distribution system operator, to the government in this way, Bratušek failed to get same statue change proposals passed by the government last week for ELES, the transmission system operator, and for power market operator Borzen.

While Reporter's editor-in-chief Silverster Šurla says that Bratušek, whose proposal had been rejected by Pensioners' Party (DeSUS) president and Defence Minister Karel Erjavec while the remaining ministers abstained, should in fact be believed when she speaks of rampant corruption in the sector.

However, in any normal state accusations of such gravity as the ones issued by her would immediately be examined by authorities specialised in the prosecution of organised crime.

"The minister should report these things to the police immediately and share everything she knowns, including with all the names," Šurla says.

He argues Bratušek has not done that because she is part of one wing of the energy lobby herself. The two wings are engaged in a struggle for the executive posts and thereby for control over the bountiful money flow in state-owned energy companies.

Šurla says under The Fox and the Sour Grapes that Bratušek "is a cunning political fox, who will stop at nothing to reach her goals and is possibly even ready to bring down the government".

All our posts in this series are here

The long-running story of Ascent Resources and its attempts to get permission to use a form of hydraulic stimulation in its gas fields in Petišovci has taken another turn, one that may have more success for the UK firm. The company announced on Friday that it will now use conventional drilling techniques to extract more gas, taking “advantage of the newly reprocessed Petišovci 3-D seismic survey to appraise new conventional targets", in the words of CEO John Buggenhagen, who took over management a few months ago. The company is also appealing the decision that prevents the use of hydraulic stimulation.

Ascent Resources’ non-executive chairman Louis Castro is also quoted as saying: "Over the next six weeks or so -- together with our partner Geoenergo -- we will be evaluating and prioritising potential shallow conventional oil and gas targets and associated well site locations.”

All our stories on Ascent Resources can be found here

STA, 19 September 2019 - The Court of Audit has issued a rebuke of consecutive Slovenian governments after determining that strategic planning regarding the exploitation of nuclear energy at the Krško Nuclear Power Plant (NEK) had left the NEK owner in limbo about the future of nuclear energy in the country.

The auditors examined government strategic planning between 2006 and 2016 and determined that strategic documents had been ignored on several occasions and new ones drawn up in disregard of previous commitments or deadlines.

For example, the decision to build a second unit at NEK was made by the government in 2006, but it took years before it ever made it into downstream strategic and operational programmes.

And in 2014 the government started drafting a new national energy programme, but it was not adopted in 2014 or until the extended deadline of 30 June 2016. In fact, it has not been adopted yet, the deadline having been pushed forward several times.

As a result, Gen Energija, the state-owned company which manages the Krško power station, was "left in uncertainty as to whether construction of the second unit at NEK will be possible", the court said in a decision released on Thursday.

The court also criticises Slovenian Sovereign Holding (SSH) for not alerting the government to the potential hazards of not giving Gen Energija clearer guidance.

Gen Energija, meanwhile, has been criticised for commissioning, between 2007 and 2016, as many as 122 studies concerning the second unit, half of which were not subject to public calls for bids.

This constitutes violation of public procurement rules and risks curtailing competition between bidders, the auditors said.

Despite the shortcomings, the Court of Audit stopped short of issuing an adverse opinion.

Instead, it issued a set of recommendations on how Gen Energija should improve its operations while requesting corrective measures from the government, Infrastructure Ministry, SSH and Gen Energija.

The Infrastructure Ministry sees the report as a call to all parties to act in a coordinated and prudent manner in planning the long-term use of nuclear energy.

It stressed that the country's energy concept was already in the making and should be debated by the government in the second half of 2020.

But the ministry also noted the report covered 2006-2016, whereas the new infrastructure minister had to first deal with delays in drafting several strategic documents, including the energy concept but also the National Energy and Climate Plan, when taking the office over a year ago.

Gen Energija interpreted the report as a call for a comprehensive and long-term planning of energy production. Changes are already under way, it added.

"Gen Energija has started introducing changes in the areas where the need arose for systematic improvements already during the audit, and we will report to the Court of Audit on the implementation of the remedy measures," the company said on its web site.