The Slovenské Elektrárne company, which generates around 70 percent of electricity in the country, has generated a loss this year.
The finance ministry expects the company’s loss to amount to €21.3 million at the end of 2018, and €246 million at the end of the next year. Analysts see numerous reasons behind this development, such as disadvantageous deals on the commodity exchange as well as “the unfortunate” Mochovce project, the Hospodárske Noviny economic daily wrote on October 10.
Shareholders not commenting
shareholders have so far refused to comment on the situation. Both the Economy Ministry – managing a 34-percent share – and the second most important shareholder, the EPH holding, suggested only the company management can comment. Neither did EPH spokesman Daniel Častvaj did not specify for HN what new measures are being prepared to tackle the situation.
Slovenské Elektrárne was not more precise. “The net profit cited was true at a time when electricity prices were at a much lower level than today, and this result has also been impacted by the foreseen launching of the both finished blocks of the Mochovce nuclear power plant into operation, and by the connected considerable increase in depreciation of the devices,” SE spokesman Miroslav Šarišský explained for the daily.
Analysts comment on reasons
There are several reasons behind the situation such as disadvantageous trades on the commodity exchange, analysts said. Ján Pišta of the energy consultancy company JPX opines that these figures are related, for example, to the growth in energy and emissions’ prices and company’s disadvantageous deals on the commodity exchange. A year ago, the price of Slovak commodity on the exchange was quite high, due to the limits of transmission capacity in the network from the Czech Republic. Moreover, emission quotas have been considerably increased in 2018 as well, which made the power production more expensive, especially in the Novákoch as well as the Vojany plant.
Jozef Badida, analyst of the energieprevas.sk website, supposes that the strongly negative economic result of SE in the following years is connected to the completion of Mochovce 3 and 4 nuclear power plant’s units – mostly to high loan costs and depreciation of assets. During the launch of production, the costs will soar as well, he said for HN. “After the production onset, these blocks cannot be left to stand still, and so they will produce deeply below their cost – which will deepen the loss a great deal,” Pišta explained.
Households not to be impacted
The good news for consumers is that SE’s economic results will not influence their invoices to be paid. The bad news is that the price of electric power on the commodity exchange keeps becoming more and more expensive, which will be translated to the end consumer prices. “The negative economic result of Slovenské Elektrárne will not impact the electricity prices for households or companies, but it will impact the state budget – which thus loses revenues from dividends,” Badida pointed out for the daily.