Slovakia Power SWOT

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Slovakia Power SWOT

• 16 May 2022
• Slovakia
• Power

SWOT Analysis

Strengths	Market largely liberalised with the EU's Third Package Directives implemented. Supply reliability bolstered by interconnection with the Czech Republic, Hungary, Poland and Ukraine. Stable overall macroeconomic and political backdrop. Strong institutions and EU membership provide a robust legal framework adding stability for investors.
Weaknesses	Significant state control persists in the power market. Transmission system not ready to support new renewable energy sources with a large reliance on inflexible nuclear power generation. Slovakia's economy is vulnerable to any shifts in external demand due to the high share of exports in GDP. Perceptions of corruption and widespread popular mistrust of the political class remain prevalent.
Opportunities	Plans to develop biomass in remote and mountainous areas where natural gas is not available. New auctions in the renewable segment will provide opportunities for solar and geothermal developers. Consumer/household demand in the economy as a whole supports power demand. EU fiscal support for transmission system upgrades could enable increased renewable capacity growth. Plans to improve grid management and interconnect to regional markets will unlock potential growth in the renewables segment.
Threats	Slovakia faces weaker growth outlook due to pandemic-related headwinds, the surge in energy prices and persisting supply chain disruptions. Russia-Ukraine conflict has created significant uncertainty surrounding future of Russian gas imports. The government is seeking to deepen its control over the functioning of the energy market in order to ensure lower end-user prices. Delays and cost overruns hinder the nuclear sector, with Slovenské elektrárne having consistently been overly ambitious regarding commissioning timelines. State focus and support is provided to the nuclear sector drawing support from other forms of generation such as non-hydropower renewables.

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