Boston, MA -- (ReleaseWire) -- 01/07/2014 -- A sluggish regional and domestic economy, weak government finances and low power prices have caused repeated delays to the implementation of planned investments in recent months, raising significant challenges for Slovakia's power industry. With the economy turning a corner, there is a risk the country's net electricity import requirements could grow over the coming years.
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 Enel's Mochovce nuclear plant in Western Slovakia - which was due to be completed in 2013 - has been subject to repeated delays and is now unlikely to be completed until 2015. E.ON 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 bodes well for longer-term energy self sufficiency, in the medium term repeated delays to planned investments could raise challenges for the industry, particularly with economic growth likely to pick up in 2014.
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Key trends and developments in the Slovak electricity market:
- Enel have pushed back the deadline for the completion of two new reactors at the Mochovce power plant to 2014 at the earliest. 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.
- In July German utility E.ON announced it was shutting down production at its 430-megawatt (MW) gasfired 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 CEO, Johannes Teyssen. said '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'.
- During the period 2014-2022, Slovakia's overall power generation is expected to increase by an annual average of 2.4%, reaching 29.5 terawatt hours (TWh). However, much of this growth is expected to be achieved in 2014 and 2015, as the new reactors planned at Mochovce come online. Beyond 2015, we see growth in generation coming in at a more subdued annual average of 0.5%.
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