• security of energy supply and energy services,
• competitiveness and
• environmental protection.

A document setting the long term vision is the National Energy Programme (NEP) – see Main Documents. It provides a legal basis and political consensus for the instruments/ mechanisms to achieve the main requirements regarding energy services, which are key element for the prosperity, economic and technical development.

The Energy Office is responsible for strategic development and management of national energy supplies, mainly electrical power and natural gas. It ensures the proper functioning of the market, plans reliable and economically viable supply of energy in normal and in extraordinary conditions, and oversees the sustainable development of energy systems. It is responsible for the development of systemic energy legislation and for implementing procedures in the area of energy use and supply. It mediates in the strategic processes such as management and privatisation of state assets and state owned energy companies. It also covers energy matters in the country international relations and directs and co-ordinates work of two official bodies in the energy sphere: Agency for Efficient Use of Energy, and the Energy Inspectorate within the Inspectorate for the Environment and Spatial Planning of the Republic of Slovenia. The Energy Office actively cooperates with other main institutions such as Energy Agency and non-governmental organisations operating in the energy sphere.

The main international endevour of Slovenia is, no doubt, the EU. Here, Slovenia actively participates in creating energy legislation and is also activly involved in other energy related programs of the EU, such as the Florence (electricity) and Madrid (natural gas) Fora of regulators and interested parties, as well as Euro-Med cooperation.

Slovenia is also an active member of the Central European Innitiative (CEI) and the Energy Directorate participates in energy related events, although the main organization of CEI events are handled by the Ministry of Foreign Affairs.

Slovenia is a Signatory State of the Energy Charter Treaty and its Protocol on Energy Efficiency and Related Environmental Aspects. The Parliament has ratified the Treaty and the Protocol on 4. July, 1997 thus making the Treaty and the Protocol an incorporated part of the legislation.

UN Framework Convention on Climate Change and the Kyoto Protocol thereto were signed by Slovenia on 13.6.1992 and 21.10.1998, respectively. By ratifying the two instruments, Slovenia is bound to reduce green-house gas (GHG) emissions in the period 2008-2012 by 8% compared to the base year 1986. This amounts to reducing CO2 emissions to around 14,000,000 tons per year. As the energy sector includes some of the largest GHG emitters, these limitations will also significantly influence the further development in the energy sector.

Slovenia is also a party to international Conventions and Treaties concerning nuclear safety and handling of nuclear fuel.

Energy Directorate also cooperates with neighbouring countries in the field of energy on various projects, especially concerning electricity production and transmission.

Energy intensity

Slovenia consumes less energy per unit of GDP than seven new EU member states from Eastern Europe, while other EU countries have lower energy intensity rates. In 2004 Slovenia[1] consumed 322 toe (tonnes of oil equivalents) of primary energy to produce EUR 1 m of GDP expressed in constant 1995 prices, as against the 209 toe consumed in the EU-25 in 2003. Slovenia hence consumed 54% more energy than the average EU country to produce one unit of GDP. The differences in the EU countries’ energy intensity are large; the ratio between the least energy intensive Denmark and the most energy-intensive Estonia is 1:9.

Slovenia’s relatively high energy intensity can partly be explained by the much lower GDP per capita than the EU average and partly by the high share of manufacturing industries in the economy. In 2003 Slovenia’s energy consumption per capita was just 10% below the EU-25 average, while its level of development in terms of GDP per capita (at constant EUR prices, 1995) was 42% lower. The huge developmental gap was thus one of the reasons for Slovenia’s poor ranking according to the energy intensity indicator. The abovementioned seven member states with the highest energy intensity significantly lag behind the EU average as regards their GDP per capita (by 64% or more). On the other hand, Slovenia’s high energy intensity is also the result of the economic structure where manufacturing industries hold a 26% share in value added (the second highest share in the EU-25 behind Ireland with 28%). Among manufacturing industries, a large part is taken up by industries in which energy consumption represents a high share of production costs (metal, non-metal, paper and chemical industries). These industries generated 11% of Slovenia's total value added in 2003 or 42% of the value added generated by manufacturing industries. The share of energy consumed by these industries in total energy consumed by manufacturing industries was almost 71%. However, the high share of industry in the economy is only one of the factors of high energy intensity since a comparison with EU countries does not show a high correlation. For example, an exception is Ireland; with an even higher share of industry and a higher share of energy-intensive industries, its energy intensity is a half that of Slovenia’s. Of the seven countries with the highest energy intensity rates in the EU, in four the share of industry is above the EU average and in three it is below the EU average.

Slovenia’s energy intensity dropped considerably (by 17%) between 1995 and 2004, but in recent years its reduction has stopped. In the 1995-2003 period, energy intensity in the EU dropped by 9%. In Slovenia the halt in the reduction of energy intensity has been particularly strong since 1999; in 2001 and 2004 a slight increase in energy consumption per unit of GDP was registered. In 2004 Slovenia’s energy intensity was up by 0.5% (GDP grew by 4.2% while primary energy consumption was up 4.7%). Among energy sources, the consumption of hydro-energy was up by 29.9%, while in absolute terms the consumption of fossil fuels increased the most, by 95,000 toe.

The assumption that energy intensity will decrease the most in countries where levels are high is not being confirmed (see the figure). For example, in the Czech Republic energy intensity in the 1995-2003 period decreased by less than 8% and is still four times higher than the EU average. In the same period, in Ireland and Denmark, which have very low energy intensity rates, the rate was down by 26% and 13%, respectively.

Table: Energy intensity (primary energy consumption per unit of GDP), toe/m EUR1995

Source: Eurostat, Structural indicators; SORS; calculations by IMAD. Note: 1 data on energy consumption and GDP for Slovenia taken from the SORS; calculations in constant EUR1995 prices by IMAD.

Renewable energy sources

The use of renewable energy sources (RES) is in accord with the concept of sustainable development since it represents a saving of the reserves of fossil fuels and preserves them for future generations. Replacing fossil fuels with RES can significantly contribute to the achievement of the Kyoto objectives since the exploitation of solar, wind, geothermal and hydro-energy does not raise the level of greenhouse gases and keeps the pollution levels low. However, the effect on the ecosystem and environment can be important, especially in the case of huge hydro-energy power plants. Because RES are, as a rule, domestic energy sources, a higher share of their consumption means more reliable energy supply and less dependence on imported energy.

Slovenia is one of the countries with a relatively large share of RES in its total primary energy consumption. In 2004 RES represented 11.7% of Slovenia’s total primary energy consumption[2], which was twice as much as in the EU[3] (5.9% in 2003). Latvia had the highest RES share (over one-third) in the EU, followed by Sweden (26%), Finland (21%) and Austria (20%). The lowest use of renewable sources (less than 2% in total consumption) was observed in the UK, Luxembourg, Cyprus, Ireland and Belgium. Such large differences mainly depend on the countries’ natural conditions.

In most countries the so-called traditional RES such as biomass, waste and hydro-energy predominate. For Slovenia the abundance of hydro-energy is characteristic. In 2003 the average structure of RES in the EU was as follows: biomass and waste 66.4%, hydro-energy 24.1%, geothermal energy 5.2%, wind energy 3.7%, and solar energy 0.6%. Slovenia had the following structure of renewable sources that year: biomass, biogas, and industrial and municipal waste 62.9%, and hydro-energy 37.1% (other sources are not covered[4]). As regards the share of hydro-energy in total RES, Slovenia is ranked behind Slovakia (48%), Austria (45%) and Spain (38%). In the EU, since 1995 the use of biomass has increased the most (by 37.7%), while the use of hydro-energy decreased by 6.1%. In Slovenia too the use of hydro-energy is not on the rise (it is changing depending on the water level of rivers), while in the past four years the use of biomass has increased by 9.5%. Although in the EU the use of non-traditional RES such as geothermal, wind and solar energy increased by almost 2.5 times (of which wind energy was up almost 11 times), these types of RES still make up marginal shares (only 0.6%) in the countries’ total primary energy consumption. The only exceptions are Denmark, Italy and Cyprus (see the figure).

Because of the high share of hydro-energy, in Slovenia the dynamics of the share of RES in total primary energy consumption largely depend on the weather conditions which have an impact on the water levels of Slovenian rivers. While in 2000 the share of RES already achieved 11.9% of the total primary energy consumption, by 2003 it had shrunk to 10.8%. Because of drought, in 2003 electricity production in hydro-electric power plants was 23% lower than in 2000. In 2004 the hydrologic conditions improved substantially and compared to the previous year production in hydro-electric power plants improved by 38%. Thus in 2004 the share of RES increased to 11.7%.

As regards the present trends, the EU’s intention to increase the share of RES to 12% by 2010 seems to be a very distant objective. In the 1995-2003 period the share of RES in the EU increased from 5.0% to 5.9%. The ambitious objective of the EU to double its share of RES was set to achieve the Kyoto objectives; in this respect the use of RES should be increased the most by countries with favourable natural characteristics. Without radical financial and other measures this objective will not be achieved.

By finishing the new chain of hydro-electric power plants, in the next few years Slovenia should increase its share of RES. By building new hydro-electric power plants along the Sava river, the exploitation of the technically exploitable hydro-potential in Slovenia would be over 50%. Forests cover a large part of our country, which provides an opportunity to use more biomass. In Slovenia several plans have been made to build wind power plants but the realisation of these plans has been put on hold because of their impacts on the environment.

Table: Renewable sources relative to total primary energy consumption, %

Sources: Eurostat, Environment and energy; SORS; calculations by IMAD. Note: 1SORS' statistics on renewable sources include industrial waste while data on wind, geothermal and solar energy are unavailable.

Figure: Total share of renewable sources and the share of wind, geothermal and solar energy in total primary energy consumption in EU member states in 2003

  
Sources: Eurostat, Environment and energy; SORS; calculations by IMAD.
Note: 1wind, geothermal and solar energy not included. Country abbreviations: AT-Austria, BE-Belgium, CY-Cyprus, CZ-Czech Republic, DE-Germany, DK-Denmark, EE-Estonia, ES-Spain, FI-Finland, FR-France, GR-Greece, HU-Hungary, IE-Ireland, IT-Italy, LT-Lithuania, LU-Luxembourg, LV-Latvia, MT-Malta, NL-Netherlands, PL-Poland, PT-Portugal, SE-Sweden, SI-Slovenia, SK-Slovakia, UK-United Kingdom.

[1] Data on energy consumption and GDP for Slovenia taken from the SORS; calculations in constant EUR1995 prices by IMAD.

[2] Using the SORS’ data on renewable sources that include industrial waste.

[3] Eurostat, Environment and Energy.

[4] Records and statistical data collection for solar, geothermal and wind energy are still incomplete in some EU countries.

Slovenian RENEWABLE Energy Profile

Regarding the share of RES in the primary energy balance and also regarding electricity production from RES, Slovenia is well placed between the most developed European countries. The  largest contribution comes from the hydro power plants (large hydro power plants have more than 10 MW of installed power and produce 24,8% of energy in Slovenia, small hydro power plants have 10 MW or less installed power and produce 4,3% of energy in Slovenia) and biomass (wood and wood residues). With a share of 9.2% Slovenia has the fifth highest share of renewables in the primary energy balance. The average in the EU is 6%. The renewables contribute to the electricity production with a share of 30,6% placing Slovenia in the fourth place; the EU-25 average is 14,2%. The electricity production without large hydro power plants is not so favourable, with the share of 3,5% in the year 2002 Slovenia is placed among average countries; the average of EU-25 is namely 2,9%.

The following table represents the recent level of the use of the renewables and the level expected to be reached in 2010 and 2020. The data are mostly summarized from the Expert Bases for the Resolution of Energy Use and Supply of Slovenia (Ministry for the Economic Affairs, 1995) , some of them are corrected according the latest data and estimations. On general RES level there are no later analysis available, specific data for some of RES are presented further on. New technical and also economical potential is foreseen for wind in the Primorska region, where wind measurements are indicating the possibility for a larger and economical wind exploration.

The presented program of investments in upper table up to 2010 could be compared with the similar programs for RES in the EU countries. On the other hand in the period 1995-2000 the government didn’t succeed to introduce any relevant condition to support investing activities that could contribute to increase of RES share in total energy production. Taking into account that the relevant conditions for support RES will be adopted in due time and the proposed amount of the investments will be executed we could expect the shares for the renewables presented on the right picture below.

The forecast for 2010 is only an overview, based on the recent technical conditions and similar forecasts for other countries. The presented forecast for the RES was prepared within the preparation of the National Energy Plan. The preparation of the plan started already in the 2000 and is recently in the phase of the approval in the parliament. The natural conditions in Slovenia enable Slovenia to broadly exceed these targets, if an adequate regulatory framework and market conditions are implemented. One of perspective regulatory framework in so called feed-in tariff system.

The electricity production with all RES producing electricity listed in the table below is supported trough the feed-in tariff system. This system is foreseen for independent qualified producers¹ from which distribution companies² have to buy electricity on fixed prices from qualified producers (Official Gazette RS, no. 25/02) and with Decree on prices and premiums for purchase of electricity from qualified producers (Official Gazette RS, no. 8/04).

Uniform annual prices for the purchase of electricity from qualified producers and uniform annual premiums (when independent qualified producer sells at uniform annual premium he get paid a sum of adequate premium and market price, which is not necessary higher as uniform annual price) for electricity that the producers are selling individually to the end consumer or via distributor are shown in the table below. In the table QPP refers to qualified power plant but the rest of text is talking about qualified power producer. Qualified power producer can own more different qualified power plants from which he can sell electricity with prices mentioned below regarding the type of power plant.

Uniform annual prices and uniform annual premiums do not include VAT. It is foreseen that the prices will be changed once a year with government decree, taking into account the inflation and other relevant factors.

RENEWABLES

Slovenian NON-RENEWABLE Energy Profile

COAL

OIL

NATURAL GAS

ELECTRICITY

CO₂ EMISSIONS