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ENERGY SECTOR TO ABSORB HUNDREDS OF BILLIONS OF CROWNS OVER THE NEXT DECADES

Strategy: Nuclear power in

NUCLEAR power stations, multi-billion crown construction investments and more renewable energy resources could be part of Slovakia's new energy security strategy by 2030. The document, which Economy Minister Ľubomír Jahnátek presented to the press in late September, sets guidelines for Slovakia for over the next 23 years to establish a stable supply of energy.

NUCLEAR power stations, multi-billion crown construction investments and more renewable energy resources could be part of Slovakia's new energy security strategy by 2030. The document, which Economy Minister Ľubomír Jahnátek presented to the press in late September, sets guidelines for Slovakia for over the next 23 years to establish a stable supply of energy.

Major energy players say they are fine with the government's plans until it respects the EU liberalisation policies and guarantees stability on the market, while environmentalists are quick to stress that the strategy has a few bugs that must be worked out.

Slovakia would have to reach deep in its coffers, as the new energy security strategy calls for approximately Sk460 billion (€13.6 billion) to build power production facilities. Almost half of the money would flow into renewable energy resources, which are set to make up a quarter of the total electricity production, and the rest into thermal, water and nuclear power plants.

The Economy Ministry, which coordinated energy experts and others work on the document, assumes that both private money and state funds will have to be channeled to the sector. However, the final funding arrangements will also depend on political decisions, Jahnátek said.

The strategy banks on the completion of the third and fourth units of the Mochovce nuclear plant by 2013, and the construction of two units at the V3 nuclear power plant in Jaslovské Bohunice. The country switched off the first V1 unit in Jaslovské Bohunice in late 2006 to comply with European Union regulations on de-commissioning outdated Soviet-type nuclear plants. The second unit will be unplugged by the end of next year.

"The construction of the new Jaslovské Bohunice plant should start only after the third and fourth units of Mochovce are completed in 2013," Jahnátek told the SITA newswire.

The minister said that the country does not have enough qualified labour to build both nuclear facilities, which will require a total investment of about €3 billion, at the same time.

The document also lists the option of a new nuclear power plant in Kecerovce, with a comment that this would be only realistic after the problem of the lack of water in the region is solved. That strategy would require private investors, SITA wrote.


Power companies ready for plan


The investment plans of major power utility Slovenské Elektrárne and its Italian investor, Enel, are already in line with the state strategy, the company said.

"Our Sk110-billion investment plan is consistent with the Energy Strategy of the Slovak Republic and the power output projections," Slovenské Elektrárne spokesman Juraj Kopřiva told The Slovak Spectator.

The bulk of the Sk110-billion investments planned for the next five years will cover the completion of the new units in Mochovce, each with a capacity of 440 megawatts, which are expected be put into commercial operation in 2012, Kopřiva said.

The company, owned 66 percent by Enel and 34 percent by the state, wants to guarantee the safety of energy production in Slovakia, and to enlarge the company's presence in Central Europe, he said.

"However, the state has to guarantee a stable, predictable and transparent legislative and regulatory framework that would motivate investors to introduce new power generation capacities in Slovakia," Kopřiva added.

Currently, nuclear power stations provide about two-thirds of the energy produced in Slovakia.

Expanding the country's nuclear energy output is not a logical way to reach energy security, said Karel Polanecký of the Greenpeace environment watchdog.

"The current reactors in Jaslovské Bohunice and Mochovce can only be supplied by the Russian firm TVEL," he said. "Even in the future, it is not likely that Slovakia will enrich uranium or produce nuclear fuel."

The previous government considered wind or solar power to be an option in its energy plans. But the current Economy Ministry is not proposing major construction of these utilities because, according to the document, they do not contribute enough to the stability of the supply system. Instead, the strategy recommends more focus on thermal power plants, hydropower plants and similar technologies.

The country's political opposition objects to the costs of the new strategy. The Slovak Democratic and Christian Union's (SDKÚ) Ivan Štefanec said the investments will actually fill pockets of the developers and suppliers of new technologies.

"The plans are not consistent with the European energy strategy, which will prevent Slovakia from fully drawing money from the (EU) structural funds," Štefanec told SITA.

Slovakia's major oil refinery, Slovnaft, said Slovakia must continue to follow the EU's principles of liberalising its energy market. But until then, it's fine with the proposed strategy.

"Making regulation of the energy market stronger in Slovakia will not do as much to secure energy production as a functioning liberal market," Slovnaft spokeswoman Kristína Félová told The Slovak Spectator.

Slovakia's dependence on Russian oil supplies has caused headaches for energy experts. The new energy strategy calls for alternative oil pipeline routes and diversification of energy supplies.

"Slovnaft has been supportive of the idea of diversification for Slovakia and other European countries," Félová said.

Slovnaft, part of the international MOL group, also supports making oil pipeline routes more interconnected among EU members, and building strategic oil supplies in line with the EU directive on assisting neighbouring countries in need, she said.

Now that the Adria pipeline from Croatia has resumed operation, Félová said, Slovnaft can secure its oil supply by drawing on two sources: the Druzhba pipeline from Russia, and Adria.

"In case of need, Slovakia can secure three to 3.5 million tonnes of oil annually," Félová told The Slovak Spectator.

Another option for diversif-ication, she said, is the possible reserve route of the Czech branch of Druzhba. This could be filled through the TAL pipeline, which runs through Ingolstad to the Czech city of Kralupy to Slovakia.

Analyses suggest that the eventual interlinking of Bratislava and Schwechat might not be able to considerably help the diversification, said Félová. The oil for Austria flows to the country through TAL pipeline, which on the Austrian-Italian border connects to the Adria-Wien-Pipeline supplying oil to the Schwechat refinery. Based on the OMV website, the annual capacity of Adria-Wien-Pipeline (AWP) is about 10 million tonnes of oil, while the processing capacity of OMV based in Schwechat is 9.6 million tonnes of oil annually, she added.

Though currently the capacity of AWP is used only at 80 percent, with the dropping domestic extraction in Austria and the growing consumption of motor oils at our neighbours, which reaches approximately 12 million tonnes annually it is possible to expect that Austria will need to increase the use of AWP pipeline for its own purposes, Félová explained.


Political and environmental concerns


The ministry is also pinning some of its hopes on the Nabucco pipeline, which should directly link Europe to the natural gas resources in the area of the Caspian Sea, according to the Sme daily.

The pipeline, which is expected to be completed by 2012, will be built by a consortium of five energy companies, including MOL.

However, the project has already caused tensions between the US and the EU, because the infrastructure would be plugged into gas resources in Iran, Sme reported. The US Iran Sanctions Act of 1999 stipulates that if any foreign company invests more than US$20 million in Iran's gas and oil sector, the company is subject to US sanctions.

Greenpeace says it's natural that Slovakia would want an energy security strategy, because governments across Europe have similar ones. But the Slovak government's document does not pay enough attention to increasing energy effectiveness, the watchdog's Polanecký said.

"It rather resembles a document from the times of central planning," he told The Slovak Spectator. "There are only two tools that can boost energy security: minimising the wasting of energy and maximising the use of domestic sources. In Slovakia's case, it is most important to use renewable resources."

Reducing energy use in buildings, from both heating and appliances, is one way to reduce energy waste, Polanecký said. Current technologies make it possible to reduce energy consumption in housing estates and commercial buildings to one-third of their current levels. The strategy does all it can to diversify energy resources, Polanecký said.

"But unfortunately, consi-dering the limited amount of available resources, you must consider that if there is increasing interest from a larger number of clients, Russia and Azerbajan might sell their oil to someone else," he said. "The strategy should focus on how Slovakia can handle the situation with a limited amount of oil."

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