The disruption of global supply chains due to restrictive measures to combat the pandemic and Russia's subsequent military aggression against Ukraine has brought turbulent times in the energy sector. The energy market is experiencing difficult times on a global scale, and Slovakia is no exception in this respect. Analysts at Goldman Sachs are talking about a perfect storm in the energy market and expect the gas and electricity market to remain tight in Europe until at least 2025. [1]
Despite this challenging energy situation, the major changes in the energy sector approved by Parliament at the end of June 2022 are not related to the above factors, but are mainly about the transposition of the European Union directives, which are collectively referred to as the 'winter energy package'.
The adoption of the new energy legislation represents new electricity market settings. Part of Act No. 256/2022 Coll. amending Act No. 251/2012 Coll. on Energy and on Amendments and Additions to Certain Acts (hereinafter referred to as the "Energy Act") entered into force on 30th July 2022, but a number of provisions will not enter into force until 1st October 2022. as also indicated by the Minister of Economy, the amendment should, among other things, facilitate access to the market, promote self-consumption and increase transparency, not least by contributing to solving the complex situation in the energy sector.
In particular, the amendments to the Energy Act concern:
- the definition of new terms and new market participants;
- the definition of the concept of the energy business;
- the specification of the authorisation to conduct business and the introduction of the concept of simple notification;
- the partial deregulation of retail electricity and gas prices and changes related to consumer protection;
- the introduction of smart metering systems.
In addition to the amendment to the Energy Act, Act No 250/2012 Coll. on regulation in the network industries was also amended. The amendment to the Act brought about an extension of the powers of the Energy Regulatory Office (ÚRSO) in line with the requirements of European legislation, and also introduced partial deregulation of electricity and gas supply prices, which, however, is unlikely to be of great significance in the coming years given the current energy prices.
New market participants will be e.g. an active consumers, an aggregator or an operator of an electricity storage facility. These definitions have arisen as a result of changes in the energy market and bring practical applications. An active customer is generally considered to be an electricity end-user who, in addition to the actual consumption, also produces electricity to some extent and supplies it to the market.
The amendment to the Energy Act should have a positive impact on the business environment as well as on the environment. The new legislation should strengthen the possibilities for consumers to participate in the energy market actively, dilute their own consumption and reduce overall energy costs by installing new equipment for producing energy from renewable sources.
In the coming months, we will see how the Ministry of Economy, the Office of the National Regulatory Authority and the government will react to the high electricity and gas prices and whether there will be an expansion of the entities that will be able to take energy at regulated prices. As stated by the ÚRSO, the most important measure will be the implementation of the use of cheaper electricity from the Memorandum with Slovak Power Plants for targeted groups of consumers.
In case of additional questions about the above changes, please do not hesitate to contact us.