The covers and editorials from leading weeklies of the Left and Right for the work-week ending Friday, 13 September

Mladina: Energy sector suffers from excessive pay

STA, 13 September 2019 - The left-wing weekly Mladina says in its latest commentary that the government does not want to make order in the energy sector and reduce the excessive wages there as the sector is highly politicised, with each political party having their piece of the pie.

"The world of energy in Slovenia is a distinctively political matter. The entire sector could be called a small political paradise," editor-in-chief Grega Repovž says under the headline EUR 100,000 a Month.

According to him, energy should be a competitive business in which the state does not and must not have any connection, because otherwise it does not function under the economic principles.

"It is supposed to be a serious business, with competition, market, large players, fierce fights for every consumer. But it is not. In reality, it is a completely state-owned system, but excluded enough from the state that the public sector rules do not apply to it."

At the same time, it is included in the state enough that politics can influence it. When it comes to distributing influence in the energy sector, political parties are able to make agreements and they cooperate well.

"There is a code of silence among parties and each new party which enters the government quickly gets its own 'energy district'," Repovž adds.

As energy companies in Slovenia are mainly public companies, it would be right if they get completely subordinated to the rules of public sector "in the field of wages for starts. Slovenia has one unusual feature: the highest wages are not paid out in the banking sector, but in energy."

However, Mladina does not believe that the current government has the courage or even the intention to do something about that. "It seems that a majority has already forgotten about their high-flying election promises," concludes the commentary.

Demokracija: Slovenia should learn from Estonia

STA, 12 September - The right-wing weekly Demokracija praises Estonia for its break with Communism, while Slovenia opted for a gradual transition and never really broke with the regime. "Communism was an occupation and Slovenia will not be able to step out of its shadow by ignoring its remnants. The snake needs to be decapitated or it will bring us down once more."

The weekly comments on Thursday on an interview Estonian President Kersti Kaljulaid gave the broadcaster TV Slovenija last week in which she specifically said that the country had been occupied by the Soviet Union and did not join the union willingly.

Slovenia and Estonia are similar in many ways, sharing similar fates after World War II. "Both had been occupied, in both countries the Communists first killed most of the bourgeois intelligentsia, industrials and entrepreneurs, and sent the rest to labour camps."

In both countries, power was in the hands of foreigners: in Slovenia in the hands of Serbs and in Estonia in the hands of Russians. They experienced Communist dictatorship and the countries stagnated for half a century.

But after the fall of the Berlin Wall and the independence of the two countries, their ways diverged. Slovenia opted for a gradual transition to market economy and never got rid of its socialist mindset, while Estonia broke off with Socialism overnight.

Slovenia could learn a lot from Estonia. The latter was a much poorer country when it became independent, but is now on Slovenia's tail, the paper says under the headline Why Estonia Became E-stonia.

The different mindsets were the most pronounced in the 2008 crisis, when Slovenia decided for Keynesian measures, while Estonia let the market sort itself out.

Although unemployment in Estonia was higher than in Slovenia during the crisis, the levels are similar now. But Estonia's debt amounts to only 8% of GDP, while Slovenia's is at over 70% of GDP.

All our posts in this series are here

STA, 11 September 2019 - The energy company Petrol signed cooperation contracts with Russia's T Plus Grupa and Schneider Electric at a Slovenian-Russian business meeting held in Moscow on Tuesday as part of Prime Minister Marjan Šarec's visit to the country.

Petrol will cooperate with the two Russian companies in energy efficiency. According to Petrol CEO Tomaž Berločnik, the projects will focus on optimisation of district heating.

The project with T Plus Grupa will be carried out in Izhevsk, and the other in Yekaterinburg, where Petrol will set up specialised software and provide IT support.

"Thus we will reduce energy use and optimise operative costs," Berločnik explained. According to him, the two projects are worth "a few million euro" and potentially tens of million in the future.

The business meeting, hosted by Šarec, Economy Minister Zdravko Počivalšek, Foreign Minister Miro Cerar, Labour Minister Ksenija Klampfer and Russian Digital Development Minister Konstantin Noskov, featured nine other Slovenian companies that already operate on the Russian market.

In his address, Šarec highlighted the two biggest Slovenian investors in Russia, the pharma company Krka and ICT company Iskratel.

According to Krka CEO Jože Colarič, Krka's sales in Russia will reach almost EUR 300 million this year, which is about 40% of Slovenia's total exports to the country.

Also represented at the meeting were the telecoms equipment maker Comita, air dome maker Duol, sports equipment manufacturer Elan Inventa, gas wholesaler Geoplin, industrial group Kolektor, engineering company Riko and steel group SIJ.

Šarec said that despite the EU's sanctions against Russia over the Ukrainian crisis Slovenia as en export-oriented economy was very much interested in the strengthening of economic cooperation with Russia.

He said there were many opportunities to enhance ties in high-tech and called for a joint foray into third markets.

Počivalšek echoed this call and pointed to potential for cooperation in energy, pharmaceuticals, automation and tourism, especially spas.

The economy minister noted that in 2018, bilateral trade in goods reached EUR 1.16 billion, of which EUR 790 million was Slovenia's exports and EUR 370 million imports.

In the first six months of this year, Slovenia's exports to Russia almost reached EUR 750 million. The exports are slowly approaching the 2013 level and the one billion euro milestone, Počivalšek assessed.

Currently, 38 Slovenian companies are present in Russia with total direct investments of EUR 357 million, which is 5% of Slovenia's total external investment, the minister said.

In turn, Russian companies mostly invest in the financial, metal and spa industries in Slovenia. Russian indirect investments in Slovenia top EUR 538 million.

Počivalšek called on Russian companies to increase their investment in Slovenia and take part in the final phase of privatisation of some 110 companies.

"We are striving to create a competitive environment for domestic and foreign investors and want to be green, creative and smart," the minister said.

Talking to the STA on the sidelines of the event, he rejected criticism that the strengthening of relations with Russia could have a negative impact on Slovenia's relations with its other alleys.

"Slovenia is an export-oriented economy. Out of last year's GDP, which reached EUR 46 billion, exports totalled 39 billion, which is 85%. And 80% of the exports was generated in EU markets. We're not neglecting any markets. And the Russian market is important to us," he stressed.

Slovenia's top market is the EU, the Western Balkans comes second, and China has already overtaken Russia, which is thus our fourth most important market, he added.

Cerar and Noskov, who head the intergovernmental economy commission, also addressed the participants of the business forum. Cerar stressed the importance of the "friendly atmosphere" between Slovenian and Russia, and Noskov assessed that the future of the bilateral economic relations was bright.

STA, 29 August 2019 - The London-based oil and gas exploration company Ascent Resources will demand EUR 50 million in damages from Slovenia for delays in obtaining a permit to develop the Petišovci gas field in the north-east of the country, news portal Litigation Finance Journal reports.

As the British company said in a release on Tuesday, it is preparing "legal claims for damages against the persistent delays in permitting relating to the further development of the tight gas reservoirs in the Petišovci gas field".

Ascent also insists on its appeal against the decision of the Slovenian Environment Agency (ARSO) requiring an environmental impact assessment for the re-stimulation of its producing wells.

In March, ARSO decided that an environmental impact assessment will have to be made to establish whether gas extraction with hydraulic fracturing has no damaging effects on the environment.

"This is definitely a procedure which will change the physical reality of the environment," said ARSO's decision, which was also upheld by the Environment Ministry.

Ascent is also exploring possibilities to further develop the Petišovci gas field without hydraulic stimulation.

According to its press release, it is reprocessing the Petišovci 3D seismic survey acquired in 2008-2009.

It is currently interpreting preliminary data volumes in preparation for a full evaluation of the new seismic volumes, with the final data expected by mid-September.

Its CEO John Buggenhagen said the company planned to work with its partners in Slovenia to also increase production through new conventional drilling opportunities.

Ascent and its Slovenian partner Geoenergo are moreover working on documents to secure an extension of the concession for Petišovci, which is valid until 2022.

All our stories on this issue can be found here

STA, 26 August 2019 - Infrastructure Minister Alenka Bratušek highlighted the need for Slovenia to remain at the cutting edge globally when it comes to the transition to clean energy, as she addressed the European Conference of the International Association of Energy Economics on Monday.

Na @EFLjubljana poteka evropska konferenca Mednarodnega združenja za energetsko ekonomiko #IAEE. Ministrica @ABratusek je na otvoritvi poudarila, da ima Slovenija enega najboljših energetskih sistemov na svetu in da se bomo @mzi_rs potrudili, da bo vsaj tako dober tudi v bodoče. pic.twitter.com/dbnzh5hxNn

— Ministrstvo za infrastrukturo (@mzi_rs) August 26, 2019

"Slovenia is among the best and we plan on keeping it this way," she said in reference to the country placing 6th among 125 countries in the World Energy Council's Energy Trilemma Index.

She said users will play a bigger role in energy generation in the future, as will smart grids. Public transportation will have to be strengthened and buildings insulated.

"Some of the measures are free, but in most cases the path to decarbonisation will be expensive. Financing of the transition should be the key issue," she said.

Bratušek also noted that in the transition to carbon-neutral energy sources, Slovenia will have to be mindful to keep energy accessible to all citizens.

The minister delivered the address at the 16th European Conference of the International Association of Energy Economics (IAEE), organised by the IAEE, the Ljubljana School of Economics and Business and the Slovenian Energy Economics Association.

Through Thursday, the conference will feature debates on smart solutions, the future of gas and gas infrastructure, and geopolitical issues, including relations with Russia.

All our stories on energy in Slovenia are here

STA, 22 August 2019 - Prime Minister Marjan Šarec visited Slovenia's sole nuclear power plant in Krško on Thursday, calling for "investing all our efforts to build a second reactor" to replace the current one beyond 2043.

 "We need to invest all our efforts in this and set out to build a second reactor because in the future we will need ever more electric power, in particular if we want to be a development-oriented country," Šarec said during a visit to the Krško Nuclear Power Plant (NEK).

"In light of the changes in the field of energy and a rethink about the future sources of energy, a decision will have to be made soon what direction Slovenia wants to take," Šarec said.

"With the power station's management we have established that Slovenia is definitely a nuclear country considering that NEK generates a significant portion of our electricity, and we'd soon feel its loss," the prime minister added.

The existing reactor is slated for closure in 2043, by roughly which time the Šoštanj coal-fired power station TEŠ will have ceased to operate, so Šarec believes Slovenia needs to decide what energy policy it will pursue.

"If we don't want wind farms or thermal plants and other sources of energy, we'll soon find that there's nowhere we can get energy from," said Šarec, calling for more effort to attain energy self-sufficiency.

The rate of unscheduled outages of NEK since 1983 has been reduced to virtually zero and the power station has been performing successfully, Šarec said. "Since becoming operational, the amount of energy it supplies has increased equal to an output of almost ten hydro power plants."

Šarec spoke to reporters after meeting NEK CEO Stane Rožman and Martin Novšak, the CEO of Gen Energija, the state-owned company that owns the Slovenian half of NEK. The pair were happy with the talks.

"I believe we have many opportunities to build a bright carbon-low future," Novšak commented, with Rožman adding that they had asked Šarec for his support in principle for their plans.

They also discussed the national climate and energy plan whose draft does not discuss nuclear energy, although the prime minister believes it should.

"I expect professionals to decide in the end because decision-making is too often left to those who are driven by emotions rather than by expertise," said Šarec, who sees positive effects of nuclear energy outweighing negative ones.

A decision on potential construction of a new reactor should be taken as soon as possible because it would take at least a decade from the time the decision is taken to when the reactor is built.

Gen Energija has conducted a number of studies to prove that the location and technology is right, while permits are still pending, and so is the project's zoning.

"There's also tenders, development permits, [planning] operation and decommissioning," said Novšak, who would like the national climate and energy plan to state clearly that the country would keep nuclear energy in the future.

Šarec also faced questions about the difficulties surrounding major infrastructure projects in Slovenia, admitting that TEŠ 6 generator was a "sad story", but would not speculate on who was responsible.

The biggest problem is the spatial planning of such projects, and there is the question of legislation. "Once we don't have a referendum on each thing because of everyone who has five minutes to spare, things will go in the right direction," he said.

The prime minister has not yet tested coalition support for a second nuclear reactor and would not speculate whether other countries could be involved in its construction and financing. "I will make the effort though that Slovenia remain independent energy-wise," he said.

Owned jointly by Slovenia and Croatia, the plant began operating at full capacity in August 1982, launching commercial operation in January 1983.

The foundation stone for the plant was laid in 1974 and construction started a year later. After the first phase of trial operation in May 1981, the plant transmitted first kilowatts of power into the national grid in October that year.

STA, 17 July 2019 - Ascent Resources, the UK developer of the Petišovci gas field in eastern Slovenia, has reportedly launched administrative dispute proceedings in Slovenia after it was ordered to get a separate permit for hydraulic fracturing.

The move, reported on Tuesday by the Stock Market Wire news portal, comes after the Environment Ministry upheld a decision of the Environment Agency (ARSO) on the controversial gas extraction project in Petišovci.

The ministry agreed that an environmental impact assessment and a separate environmental permit were necessary because the location of the gas wells was close to water sources and because underground waters and agricultural land in the area do not have very good ability to regenerate.

"The decision of ARSO and the Environment Ministry ignores the opinion of the six independent expert bodies whose advice ARSO sought," Ascent said.

The decision mistakenly concluded that the project fell within a conservation area and misapplied EU case law in relation to mitigation measures, Ascent also said as it announced multi-pronged legal action against Slovenia on 14 July, a day before the deadline for the Administrative Court appeal.

Aside from challenging the decision at the Administrative Court, Ascent plans to submit a claim for damages against the state for breach of EU law including for the unreasonably long time it took for the decision to be reached.

The company will seek damages for loss of future income from the project "which would have been expected to have been a multiple of the historic investment of some EUR 50 million."

It also plans to lodge an investment treaty arbitration claim under the Energy Charter Treaty.

All our stories on Ascent Resources are here

STA, 2 July 2019 - The share of electricity from renewable sources in gross end use in Slovenia in 2018 rose by 3.4 percentage points to 21.8% from 2005, the Energy Agency, the national regulator, says in its 2018 report.

This was facilitated by a support scheme which has since 2009 involved more than 2,500 producers with almost 3,860 production facilities running on renewables.

But in line with national goals stemming from the EU's climate and energy package, the share of renewables in gross end use will have to be raised to 25% by 2020.

To achieve this goal, progress will have to be made in transport and in power production, the agency says in the report, which has been sent to the National Assembly.

In transport, Slovenia was by 4.7 percentage points behind the target 10.5% share in 2018, while the gap for electricity output to the 39.3% goal was over 7 points.

Renewables-based power was generated mostly by hydro plants and other plants running on renewables, reaching 34.5% of the country's total power output in 2018, up almost 5 points annually.

The rest of Slovenia's power output came from coal-fired power stations (29%) and the Krško Nuclear Power Plant, the country's only nuclear power station (36.5%).

Domestic electricity production covered almost 85% of domestic electricity consumption, up 1.7 points from 2017.

However, the agency said the output did not reflect the actual potential of the country's electricity production facilities.

It was rather a result of the structure of production facilities, their competitiveness and the emerging electricity market target model, says the report.

For instance, hydro power stations' output depends on water levels, while coal-fired power stations and plants running on liquid and gas fuels strongly depend on daily power consumption as well as on market variables such as the prices of emission coupons, fuel or wholesale.

The agency also says market concentration in the retail market somewhat decreased last year, which shows there is more competition among electricity suppliers.

However, the end price of electricity for an average household edged up 0.3%, while it rose by more than 8% for other users.

While there is still much room to save on electricity bills by changing suppliers, the number of those did so in 2018 dropped by one point to 5.7% over 2017, a second consecutive annual drop.

The Energy Agency is the country's national regulatory authority which directs and supervises electricity and gas energy operators.

Its mission is to act in the interest of all market stakeholders, so it is not financed from the state budget but from network charges.

STA, 18 June 2019 - Elektro Ljubljana, the largest of the five companies managing Slovenia's electricity distribution network, posted sales of EUR 103 million for 2018, up from roughly EUR 98 million in the year before. Net profit increased from EUR 14 million to EUR 17 million.

Profit before income tax, depreciation and amortisation (EBITDA) amounted to EUR 48m, with value added per employee, at EUR 95,000, placing Elektro Ljubljana in the top tier of Slovenia's most productive companies.

"This was the most successful business year for us," director Andrej Ribič told the press on Tuesday.

The company invested EUR 37.5 million in the distribution network, the highest amount in the last ten-year cycle, but Ribič said much higher investments were needed if Slovenia is to transition to a low-carbon economy.

The five distribution companies get EUR 123 million in network fees per year for investments. According to Ribič, at least another EUR 50 million would be needed every year.

"Some additional funding will have to be secured if we are to build what we have to build," he said.

STA, 17 June 2019 - Prime Minister Marjan Šarec agreed with an opposition MP during questions time in parliament on Monday that Slovenia should not allow small environmental groups halt developmentally and environmentally important projects. He proposes that the Environment Ministry draw up legislation to prevent this.

"Protecting the environment is important, but stopping every project will also not get us far," the prime minister told MPs, adding that Slovenia would have to decide where it would obtain energy from.

Šarec was responding to a question by Dušan Šiško of the opposition National Party (SNS) on the latest in a series of projects that faced opposition from environmental groups.

After the government aborted plans to build hydro power stations on the river Mura in the north-east at the end of May, the latest project stopped by environmentalists is the construction of the Mokrice plant in the south-eastern part of the Sava river.

The Austrian-Canadian automotive multinational Magna Steyr also faced strong opposition from environmentalists before it could build a paint shop in Hoče, north-east.

Referring to the Mokrice case, in which a small, six-member NGO, the Society for Fish Watching, managed to halt the EUR 200 million project by launching an appeal at the Administrative Court, Šiško asked the PM how long will environmental and other groups be able to obstruct investments of national importance.

"We are letting small groups for reasons that are not clear halt developmentally and environmentally important projects under the pretence of environmental protection.

"The state has clearly made a mistake by allowing every group which has a status of a public interest group to take part in procedures and actually work against public interest," Šiško said.

Šarec noted the government had moved to protect Mura, as promised, and would protect a lot more, but "that's not enough for some". "Every day I get mail from different initiatives to stop this and that construction, close TEŠ 6 and Krško. I agree this is not the way to go about things," he said.

Šarec thinks the Environment Ministry should prepare legislation that would specify which organisations serve the public interest to introduce some restrictions as to who can act as a stakeholder.

He said common sense should be used when addressing environmental issues. "Even the fiercest environmentalists use mobile phones, cars and other modern technology. All these use electricity in a direct or indirect way," he said.

"We're always moving from one extreme to the other. We used to not care about the environment at all, and now we want to protect it so much that we are causing damage to ourselves," he said.

Wind power plants are widespread everywhere around the world, only in Slovenia "birds and butterflies apparently don't know how to fly pass them", Šarec illustrated.

STA, 14 June 2019 - Ascent Resources, the UK developer of the Petišovci gas field in eastern Slovenia, plans to take multi-pronged legal action against Slovenia after it was ordered to get a separate permit for hydraulic fracturing.

Ascent will submit a "robust response to this manifestly wrong decision contrary to EU law," the company said in a permitting update posted on the website www.investegate.co.uk on Friday.

The statement comes after the Environment Ministry upheld a decision of the Environment Agency on the controversial gas extraction project in Petišovci.

The ministry agreed that an environmental impact assessment and a separate environmental permit were necessary because the location of the gas wells was close to water sources and because underground waters and agricultural land in the area do not have very good ability to regenerate.

The decision mistakenly concluded that the project fell within a conservation area and misapplied EU case law in relation to mitigation measures, Ascent said.

Aside from challenging the decision at the Administrative Court, Ascent plans to submit a claim for damages against the state for breach of EU law including for the unreasonably long time it took for the decision to be reached.

The company will seek damages for loss of future income from the project "which would have been expected to have been a multiple of the historic investment of some EUR 50 million."

It also plans to lodge an investment treaty arbitration claim under the Energy Charter Treaty.

"It was the strong desire of the board to avoid such litigation and obtain the permits necessary to develop the field which it was legally entitled to. As it has now become apparent that the possibility of achieving these goals has significantly diminished, the company will move ahead with filing this claim," the statement reads.

As a result of these developments, the company's focus in Slovenia now "inevitably shifts away from the development of the Petišovci Project towards obtaining legal redress for the damages inflicted on shareholders by the actions of the government."

All our stories about this project are here