Boston, MA -- (SBWIRE) -- 11/06/2013 -- Thanks to anticipated subdued demand growth from 2013, coupled with some supply expansion, Slovakia should reduce its net power import requirement. However, with the domestic and regional economy in a rough patch, and power prices hovering around historic lows, there is a risk that several major investments planned for the years ahead may experience delays or fail to materialise altogether.

An increasingly challenging business environment has hit the power industry in Slovakia badly, and rising costs and a sluggish economy have called into question the viability of a number of major planned projects. The construction of two new reactors at the EMO Mochovce power plant in Western Slovakia has encountered repeated delays, and E.ON has recently announced the mothballing of its gas-fired plant at Malzenice. While the country's continued commitment to the use of nuclear energy in its power generation mix, coupled with weak demand, should allow Slovakia to reduce its net import needs in the short term, major delays to planned investments could raise challenges for the industry in the years to come.

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Key trends and developments in the Slovak electricity market:

- On August 21, Slovakia's Supreme Court revoked the licence for the completion of two new nuclear power plants at the Mochovce power plant. Work had been under way on the project since a licence was awarded to Enel in 2009 by the Nuclear Regulatory Agency, but the decision calls a halt to construction. The case was brought to the court by Greenpeace Slovakia, which complained that it had left out of the licensing process by the regulatory agency. As a result of the decision, Greenpeace will have to be consulted before the licence can be reissued.
- Prior to the Supreme Court decision regarding the Mochovce plant, the government had agreed a deal with Enel to increase state financing for the project. In May the company claimed that it would have to stop construction on the project without an additional US$1.03bn from the government, which it claimed was needed for the project to meet the most up-to-date safety standards. In August the government agreed to a US$350mn increase in financing. The deadline for completion of the project has been pushed back from 2013 to 2015, and further delays are possible in the aftermath of the Supreme Court decision to revoke its licence.
- In July German utility E.ON announced that it was shutting down production at its 430-megawatt (MW) gas-fired power plant in Malzenice, owing to the plant's profitability. The company has decided to 'mothball' production - shutting down machines but preserving them in working order. Group chief executive Johannes Teyssen said that 'these kinds of decisions are never easy, but unless the business environment in our core European markets changes tangibly, other plant closures will be unavoidable'.

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