Electricity Market Structure

• Upstream:

The generation sector is heavily dominated by new Slovenské elektrárne a.s. (SE a.s, 66% controlled by Italy’s ENEL SpA), the generation company resulting from the split of vertically integrated utility SE a.s. in 2001.

SE a.s. accounts for more than 80% of installed capacity (including 2 NPPs, 2 TPPs and several HPPs) and generated electricity, and also acts as reseller of power purchased by other sources.

Residual capacity owned by Tepláreň Košice a.s. (TEKO a.s., the CHP company resulting from SE restructuring) and by regional distribution companies.

Wholesale prices are freely negotiated. Maximum price set on bids for the provision of ancillary services, due to the lack of IPPs.

• Networks

State-owned Slovenská elektrizačná prenosová sústava a.s. (SEPS a.s.) is the nation-wide TSO and is in the 100% ownership of the National Property Fund of the Slovak Republic. The SEPS, a. s. does not represent an integarted company. Under the valid Energy Act, it also performs deviation settlement, however, such activity is separated from the main activity of TSO in terms of accounting.

Three regional distribution companies with majority shareholding by the National Property Fund and minority private participation:
Východoslovenská energetika (VSE, participated by RWE),
Stredoslovenská energetika (SSE, participated by EDF) and
Zapadoslovenská energetika (ZSE, participated by E-ON). Apart from three licences for distribution issued for regional distribution companies, the Regulatory Office issued 129 licenses in 2006 for local companies having fewer than 100000 consumers. With regard to the opening of the electricity market, regional distribution companies have undergone the process of unbundling in two key areas: electricity distribution and sales.

Distribution will be further provided by individual regional distribution companies, on the other hand, electricity trading may be provided by the companies that comply with the conditions set in legal regulations.

• Downstream

Regional distribution companies are dominant in respective areas. SE a.s. distributes directly to large consumers accounting for 5% of total electricity. In addition, about 150 local distribution operators (area-suppliers) are active.

All consumers eligible since 1 July 2007. Actual switching ratio remains marginal.

Electricity prices to consumers regulated through revenue cap since 2003.

Natural Gas Market Structure

• Upstream

The natural gas sector is dominated by vertically integrated company Slovenský plynárenský priemysel a.s. (SPP, or Slovak Gas Industry JSC). SPP is owned by the State (51%) and by Ruhrgas and Gaz de France through their company Slovak Gas Holding BV (49%).

Domestic production by NAFTA Gleby is negligible. Virtually the entirety of gas demand is met through imports from the Russian Federation, on the basis of a long-term agreement between SPP and Russia’s Gazexport valid until 2008.

• Networks

SPP owns and operates gas transmission and distribution under regulated TPA regime.

SPP also controls underground storage facilities, through participation in the capital of NAFTA a.s. (55%, together with Ruhrgas 40%) and POZAGAS a.s. (35%, together with NAFTA 35% and Gaz de France 30%)

• Downstream

All consumers eligible since 1 July 2007.

SPP is the dominant supplier. In addition, about 50 small suppliers active in industrial areas.

Supply prices to captive customers are regulated through price cap.

•  Harmonisation with EU Directives
• Full electricity and gas market opening on 1 July 2007.
• Reform of authorisation procedure for the construction of additional energy capacity governed by Ministry of Economy.
• Proposals for restructuring long-term PPAs.
• Secondary legislation for ensuring effective unbundling.
• Development of secondary legislation for energy distributor to develop DSM programmes
• Management of nuclear capacity. Decommissioning of two reactors at Bohunice NPP in 2006 and 2008, and modernisation of existing reactors to comply with EU safety requirements. Completion of two reactors at Mochovce NPP to avoid substantial generating deficit.

Bajkalská 27, P.O.Box 12, 82007 Bratislava, Slovak Republic
Tel.: (+421 2) 581004 18; Fax: (+421 2) 581004 79; E-mail: urso@urso.gov.sk;
Internet: www.urso.gov.sk