Energy Crisis

Minister Han says firms in Slovenia should hold off on buying power, gas for 2023

Minister Han firms Slovenia hold off buying power gas 2023

Photo: Ministry of Economic Development and Technology

Published

October 7, 2022

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Published:

October 7, 2022

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Minister of Economic Development and Technology Matjaž Han recommended to energy buyers in Slovenia not to sign contracts yet with suppliers for next year. Minister of Infrastructure Bojan Kumer expressed confidence there would be no electricity shortage in the winter, explaining that consumption is decreasing.

The National Assembly in Ljubljana approved an increase in aid to the business sector to ease the impact of the energy crisis with just one legislator voting against the measure. The package for this year was bolstered to EUR 86 million from EUR 40 million. Subsidies for electricity and gas will cost EUR 80 million in total and the rest of the sum is for cheap liquidity loans.

The scope of the assistance was extended to all agriculture and fisheries, associations, institutes and trade unions. The financial and insurance sectors weren’t included.

Slovenia is preparing to roll out more aid next year if it is necessary

Minister of Economic Development and Technology Matjaž Han said energy-intensive companies can on as much as 70% of eligible costs to be covered. The government will prepare by the end of next month to continue with subsidies in 2023 in case it becomes necessary, he promised.

“Since the EU and the government are preparing additional measures, we recommend to public institutions and business entities that have not yet signed contracts for next year not to sign them yet, as changes to the rules of the energy market are expected to be adopted at the European level next month,” he added.

Industrial production in EU is on downward slope

In a little over a month, German spot electricity prices halved and Europe’s benchmark TTF gas contracts dropped by more than three times.

Downward pressure came from European Union member countries filling their gas storage facilities to obligatory levels ahead of schedule, but also from recessionary factors. Namely, numerous energy-intensive industries have been lowering output under the burden of electricity and gas prices. The trajectory still depends much on the weather during the upcoming winter.

Lowering consumption by 10% is obligatory

Earlier, Minister of Infrastructure Bojan Kumer estimated that the price caps for gas in the European Union would be introduced gradually, starting with Russian gas and spreading to the entire wholesale market by the end of the month.

Turning to the risk of power shortages, he pointed to the drop in electricity consumption registered in Slovenia in the past two months. If the trend persists, there will be enough energy for the winter, in his view. However, Kumer noted the country needs to slash electricity consumption by 10%, in line with European regulations.

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