Power policy

The Slovenian Energy Agency publishes an annual open call for tenders for plants producing electricity from renewable energy sources and high-efficiency cogeneration for admission to the support scheme. All production facilities connected to the grid after September 22, 2014, could take part in the renewable energy tender scheme. For renewable energy plants commissioned before this, a feed-in-tariff in the form of a universal price was available.

The auction system is meant to provide investors with greater certainty. However, its size is lacking in terms of budget and projects, procuring just only around 100-130 megawatts per year with €10 million ($9.79 million), slightly limiting renewables growth.

Power prices and costs

Slovenia's residential electricity prices peaked at €168 per megawatt-hour in 2021 after remaining relatively steady at €160 per megawatt-hour over 2013-18. There has been upward pressure on power prices in neighboring countries as tensions in the region drive European power prices up. Several power and gas companies in Slovenia have also pushed prices up. Wholesale power prices rose significantly, reaching €115 per megawatt-hour in 2021, after being no more than €51 per megawatt-hour in the previous five years. The limited subsidies the government hands out typically get added to electricity bills in the form of taxes and levies. A temporary aid package of €200 million to assist business and households with energy prices was introduced in early 2022.

Power market

Slovenia's capacity mix is dominated by nuclear and hydro plants, which together provide nearly three-quarters of the electricity consumed. According to the government's long-term strategy (known as the “Energy Concept”), the reliance on nuclear will continue with a 20-year life extension to 2043 for its Krsko plant. In addition, growth in renewables is expected to continue, thanks to the support system and priority dispatch for these generators. The electricity market has been open to competition since 2007, with a variety of generators and retailers available to consumers. However, much of the market remains in the hands of state-owned players.

Doing business and barriers

Investment in clean energy over the last few years has been minimal, ranking last out of all EU member states in 2018. Investment levels should increase slightly, as the winning auction projects begin to close financing.

Slovenia had seen power demand rising slowly in the last few years, providing the impetus for further build-out of generating capacity and/or interconnection with neighboring countries. However, in 2021, peak power demand rose significantly to 4,086 megawatts from 2,474 megawatts in 2020.

Much of the country's hydro resources have already been exploited and, with high costs of new nuclear power plants, renewables will likely benefit from this growth in demand. While the renewables subsidy program remains limited to small projects, developers may explore other revenue streams such as corporate power purchase agreements (PPAs).

The barriers to the roll-out of renewables are moderate, including the lengthy development process, lack of experience within government, and insufficient spatial planning. Such challenges are mitigated by the readily available information on the implementation process and payback time. The size and budget of the subsidy scheme will limit the deployment of renewables, unless a corporate PPA market emerges.

EV market

Electric vehicles, including plug-in hybrids, made up around 1% of passenger car sales in 2021. EV market growth suffered a setback: in 2020, EVs represented around 4% of passenger vehicle sales but this fell to 1% in 2021. In 2021, Slovenia’s passenger EV fleet comprised around 5,500 battery EVs (BEVs) and 1,000 plug-in hybrid EVs (PHEVs).

EV policy

Slovenia’s energy and climate plan for 2030 sets a target of 21% of renewable fuels in the transport sector’s final energy consumption. This target can be met both by electrification and biofuel blending, but Slovenia also has a specific EV target for 17% of the passenger vehicle fleet and 12% of vans/lorries to be electric by 2030. The target also includes a ban on internal combustion engine (ICE) vehicles by 2030. Slovenia also aims to have 7,000 charging stations by 2025 and 22,300 by 2030.

Subsidies for BEVs and PHEVs were introduced in 2017 – €7,500 for a BEV and €4,500 for a PHEV. However, in 2020, the purchase incentives for PHEVs ended, and the subsidy for BEVs was reduced to €4,500. BEVs are also exempted from paying the annual road use charge of around €100.

Taxpayers under the Corporate Income Tax Act may also claim a tax base reduction of 40% of the amount invested in passenger cars and buses (BEVs and PHEV), but not exceeding the base tax amount.

Slovenia applies EU fuel economy standards. These limit average emissions across manufacturer's entire vehicle production. For passenger vehicles, these are 130 grams of carbon dioxide per kilometer (gCO2/km) between 2012 and 2019, and 95gCO2/km in 2020 and 2021. Both targets will be introduced gradually. In 2020, 5% of a manufacturer’s most polluting cars are excluded from the calculation, while in 2021, all vehicles sold will be taken into account.

Buildings market

The heating of around half of Slovenia’s residential buildings came from burning biomass in 2020. Natural gas and oil have respectively supplied a steady 12-14% of residential heat from 2016 to 2021. The share of district heating has remained stable at under 9% since 2010. Heat pumps met almost 5.5% of space and water heat demand in 2020, up from less than 1% in 2010.

The average residential natural gas price in Slovenia for the last five years is €16.40 per million British thermal units. Heating oil prices in Slovenia in 2021 rose around 15%, to €0.97 per liter from €0.83 per liter in 2020.

Buildings policy

Slovenia’s renewable energy target for heating and cooling of buildings is 41% of the sector’s final energy consumption in 2030. The 2020 target of 31% was met in 2012, only three years after the target was set. Additionally, there is a target of at least two-thirds of energy consumption in buildings to come from renewable energy sources by 2030.

Slovenia also has an energy efficiency target to reduce final energy use in buildings by 20% by 2030, compared with 2005 levels.

Slovenia has implemented the EU directive on Energy Performance of Buildings, which requires all new buildings to be “nearly zero-energy” by 2021. Under the directive, energy performance certification of buildings was introduced in 2015.

There are grants available under the Eco fund, encouraging the installation of district heating systems, including the installation of heat pumps for hot water or biomass heating plants and also encouraging the installation of heat pumps for heating residential buildings.