The IEA peer review of the Slovak Republic took place from 23 to 30 October 2023. It came at an opportune time for the Slovak Republic, which is finalising its updated National Energy and Climate Plan to 2030 towards reaching carbon neutrality by 2050. The updated Plan increases earlier targets for emissions reductions outside the European Union’s Emissions Trading System to 20% compared to 2005, the reduction of final energy consumption to 12% compared to 2020 and to reach a share of 23% of renewable energy sources in gross final energy consumption by 2030. Today, the Slovak Republic is not on track to meet its draft 2030 emissions reductions target. 

The IEA commends the government of the Slovak Republic for the preparation of a draft national act on climate change which would enshrine carbon neutrality by 2050 into law. The proposed law would also require the preparation of sectoral climate plans, which are useful tools to enable co-ordination between ministries, and their implementation. The IEA encourages the government to accelerate the finalisation of the law and the sectoral plans. The IEA also encourages the government to establish monitoring and evaluation systems for their implementation and to enable early corrective action if needed.

The Slovak Republic’s energy and climate targets for 2030 lack ambition. The country has not set a national target for economy-wide greenhouse gas emissions reductions for the period to 2050 or sector targets. The targets for 2030 are also not reflective of the substantially increased ambitions of the European Union’s “Fit for 55” package and the REPowerEU plan and will likely need to be revised upwards shortly.

The Slovak Republic has a large untapped potential for renewables. The IEA encourages the government to develop a clear roadmap with firm actions to expand and diversify the supply of renewable energy sources. This will not only help meet projected energy demand but also contribute to the large-scale electrification of the industry and building sectors.

The Slovak Republic’s industry sector is dominated by energy-intensive industries that are highly vulnerable to energy price shocks. Since 2021, the country has seen reduced industrial production despite substantial energy intensity improvements in the industry sector since 2005. A low-carbon transition in the industry sector will require the availability of reliable low-carbon electricity supply, which the country is well placed to provide, and which should be strengthened by the proactive expansion of energy from renewable energy sources.

Delivering on the current and future climate and energy targets requires the timely expansion of robust transmission and distribution systems. While some infrastructure bottlenecks have recently been removed, more effort is needed to simplify, streamline and accelerate approval and permitting processes. Moreover, the IEA encourages the government to closely monitor if the recently passed legislation to allow innovative business models in the electricity sector is delivering the expected outcomes.

The Slovak Republic has a very high share of low-carbon electricity at 85% in 2023, compared to the IEA average of 50%. Nuclear is the Slovak Republic’s main source of electricity generation, accounting for 63% in 2023, followed by hydropower with 14%. Fossil fuels only play a minor role in the electricity generation mix at 15% in 2023. The government is committed to maintaining the critical role of nuclear power generation. It is pursuing plans for the construction of additional nuclear power plants and exploring the role small modular reactors could play in the future. The government is also assessing how to better harness the potential of nuclear energy to supply heat and to contribute to the decarbonisation of hard-to-abate industry sectors.

The IEA commends the Slovak Republic for having successfully brought the 471 megawatt electrical (MW_e) Mochovce 3 unit to a successful completion in 2023. The 471 MW_e Mochovce 4 unit is expected to become operational by 2025. Mindful of geopolitical developments, it is important that the Slovak Republic diversify sources of safety-related components and fuel for all operating units.

The Slovak Republic will also need to train a new generation of workers for the proposed new build design, which will be built in the country for the first time. The IEA encourages the government to develop a long-term strategic roadmap covering all elements of the value chain and assess in detail the role nuclear can play in a net zero future. This will also give visibility to industry and set out the enabling conditions to support its nuclear ambitions, including the role of small modular reactors. 

The building sector is the Slovak Republic’s largest energy-consuming sector, accounting for 39% of total final energy consumption in 2022. Natural gas accounts for the largest share at 42%. The predominant part of natural gas consumed is imported from a single source. Reducing natural gas consumption in the building sector will contribute to enhanced energy security.

This makes deep renovations challenging as homeowners frequently require not only the financial support, which is currently available through a variety of programmes implemented by various entities with different eligibility criteria, but also technical advisory services.

The IEA encourages the government to introduce a one-stop shop scheme. Such a scheme could offer a start-to-finish project management service, including access to financing for the refurbishment of single-family houses but also for the design and implementation of projects at the regional and local levels. This is important as many rural communities lack the capacity for such complex projects.

The renovation of public buildings is lagging the annual renovation rate required by the European Commission. There is a gap in the renovation of public buildings, compared to the renovation of residential apartment buildings. One of the difficulties is the lack of a centralised system for collecting data on state-owned and central government buildings, which prevents the creation of a targeted public building renovation plan. The IEA encourages the government to create, maintain and make publicly available an inventory of the public sector building stock at the national and local levels and to develop a database to support the design of policies to enhance the energy efficiency performance of public buildings.

Carbon taxation and fossil fuel prices in the Slovak Republic are not aligned with driving consumer behaviour in support of the energy transition. Fiscal and tax policy should encourage consumers to move away from fossil fuels and support the uptake of low-emission, more efficient, renewable and innovative options. Taxation should ideally reflect the carbon content of fuels. The IEA encourages the government to advance its pledge for a fiscally neutral green tax reform.

The government of the Slovak Republic took swift action to protect vulnerable consumers from the exceptionally high energy prices in 2021 and 2022. The government opted to broaden the definition of vulnerable consumers beyond the entire household segment to almost all small enterprises and large parts of the public sector. It also extended the provision to cap retail prices through 2024.

Wholesale energy prices have now widely returned to their pre-crises level and the IEA encourages the government to end the price caps and to quickly put in place a legal definition of energy poverty. This should be complemented by the support mechanism provided as part of the social transfer and protection system, as opposed to through subsidised and artificially low retail prices, as the low subsidised prices run counter to the government’s declared priority for the energy efficiency first principle.