The energy crisis that has gripped Europe has also affected Slovenian energy companies. In 2022 and also in 2023, it will additionally affect the operations of Holding Slovenske elektrarne (HSE), the fundamental mission of which is to ensure a reliable supply of electricity to the country. With the aim of coping with the emergency situation, SSH (Slovenian Sovereign Holding), in its role as the founder of HSE, adopted a decision on the subsequent paying-up of capital in the amount of 492 million euros.
The year 2022 was certainly the most demanding in the history of HSE. Due to poor hydrology, the production of hydro power plants this year will be as much as 32 percent lower than planned and more than 36 percent lower than last year, thus also the lowest in the last twenty years. Due to the demanding geological conditions, pillar bursts and the compression of one of the two excavation fields, problems have also accumulated in the Velenje Coal Mine, which, despite the import of coal, will be able to provide much lower quantities of coal than planned, and this will result in the production by TEŠ, which under normal conditions provides as much as a third of all Slovenian electricity, being 20 percent lower than planned. The outage of own production for the reasons described above results in the purchase of replacement electricity at a time when electricity prices have risen sharply, also in large part due to the Russian invasion of Ukraine.
The extraordinary situation in production companies will have a negative impact of approximately 460 million euros on the operations of the HSE Group in 2022, which even successful trading, which will exceed the planned profit from trading by approximately 50 million euros this year, will not be able to counterbalance. In addition, the higher prices of electricity on the market and, above all, the large increase in price volatility have a great impact on the extraordinary increase in the necessary liquidity for the price protection of the sale of own production and the necessary purchases of CO2 coupons, which is why, similarly to other European countries, in September the Slovenian state also granted domestic producers a guarantee for these purposes. Due to the considerable indebtedness of the HSE Group, which has been ongoing ever since the construction of Block 6 in TEŠ, and the difficult market conditions, despite the already approved state guarantee in the amount of 800 million euros, HSE has so far managed to obtain only 185 million euros of credit from commercial banks.
SSH also recognised the resulting situation and, with the aim of coping with the emergency situation, in its role as the founder of HSE, adopted a decision on the subsequent paying-up of capital in two tranches. The first tranche in the amount of 300 million euros, for which the relevant approval of the amendment to the Annual Management Plan for 2022 (AMP) has already been obtained by the Government of the Republic of Slovenia, was transferred today, on December 5, 2022. The payment of the second tranche is scheduled for December 15, 2022 , as it is still subject to confirmation of the amendment of the Annual Management Plan by the Government of the Republic of Slovenia, which according to the Slovenian Sovereign Holding Act-1 (ZSDH-1) is the basis for such management activities of SSH.
This will enable the HSE Group to independently and efficiently manage its own electricity production even during the energy crisis and extremely increased requirements for financial coverage, and thus to ensure a competitive supply of electricity in the Republic of Slovenia in the future. Today’s restart of Block 6 in TEŠ, which has been suspended since October 14 due to a lack of coal, will definitely contribute to the normalisation of the situation.