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Slovakia Power SWOT


Fitch Solutions Sector Intelligence  

 

    THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

    Slovakia Power SWOT

    • 14 Aug 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 Slovensk√© elektr√°rne 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.
    This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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