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Juraj Miškov
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1. marca 2011 Ostatné od Energia.skSITA

Miškov: Price of electricity can fall in summer

Week in Slovakia

Case: Minister of Economy believes that price of electricity could fall soon

Minister of Economy and Construction of SR Juraj Miškov is convinced that there is a real possibility in the regulatory system of the energy sector in Slovakia to push down prices of electricity. „I think that already during this summer it would be possible to reach lower prices than we had during 2010,” confirmed Miškov. As the economy resort further informed, chief of the Regulatory Office for Network Industries (ÚRSO) Jozef Holjenčík also shares the same opinion.

According to the Ministry of Economy, Minister Miškov and chief of ÚRSO agreed that there is space for lowering the price also in the short-term horizon. Some of the areas where the price could be modified are a re-evaluation of the system operation tariff, revision of the estimation of how many photovoltaic sources will be connected, the way how electricity from RES is bought or revision of subsidies for electricity generation. Until the end of 2011 it would be also possible in the system of transmission and distribution fees.

„In relation to the Regulatory Office for Network Industries (ÚRSO) we will demand that it sets the regulatory policy in such a way that the monopoly will not have any inadequate revenues,” explained Miškov during a press conference after holding negotiations with Minister of Agriculture Zsolt Simon and Prime Minister Iveta Radičová on food prices.

Slovakia has according to the study of the Institute of Financial Policy from the Ministry of Finance one of the highest price of electricity for companies in the whole EU. One of the possibility of how the end price could be lowered is to lower the fees in the distribution and transmission segment where natural monopoly such as operators of distribution networks and Slovak Electricity Transmission Network operate. According to the Association of Transmission Networks the total sum of the transmission tariffs and other fees was the highest among all the observed countries in 2010.

Holjenčík: Slovakia has not got the most expensive electricity

It is not true that Slovakia has the highest prices of energy,” reacted chief of Regulatory Office Jozef Holjenčík. According tom him, in the field of electricity and gas supplies for households, Slovakia has prices below the European average. „Distribution fees are also below the average. Only prices of electricity transmission are higher, but that is also only a result of including the 110kV network during the privatization process into the distribution network and not transmission network as was the case of other states,” concluded Holjenčík.

According to Holjenčík, Minister Miškov forgot to say that the visible increase in prices for businesses was caused by a non-transparent setting of fees for the Nuclear Fund or support for unrestrained electricity generation from renewable sources.

Monday – 21st February 2011 

Currently in Slovakia SEPS has issued confirmations for constructing photovoltaic energy sources with a total installed capacity more than 700 MW. The information was stated in the Development Programme of the Slovak Electricity Transmission System (SEPS) for years 2012 – 2021. Until the end of last year the capacity of the already connected sources has reached 175 MW.

German company VNG – Verbundnetz Gas AG is not interested in the privatization process of the Slovak heating companies anymore. The company, which operates two heating companies in Slovakia, in Prievidza and Nitra was interested in buying the six biggest heating companies already five years ago when they were being sold by the second government of Mikuláš Dzurinda.

The total electricity consumption in Slovak Republic should reach 31,9 TWh by 2015. The annual growth should be approximately 0,6 – 1,9 %. The information was provided by the Slovak Electricity Transmission System (SEPS) in its programme.

The Ministry of Economy of SR allowed construction of 47 electricity power plants last year. Besides that, the resort also issued a certification of compliance of the investment plan and long term energy policy concept for projects such as building a local distribution system, inter-state overflow gas station or high-pressure gas pipeline and turbo generator.

Tuesday – 22nd February 2011

Minister of Economy Juraj Miškov sees space for lowering energy prices. „We think that there is space for lowering energy prices. In relation to the Regulatory Office for Network Industries (ÚRSO) we will demand that it sets the regulatory policy in such a way that the monopoly will not have any inadequate revenues,” said minister Miškov during the press conference after holding negotiations with Minister of Agriculture Zsolt Simon and Prime Minister Iveta Radičová on food prices.

Dušan Čaplovič from Smer-SD believes that also coalition members of the parliament could support the proposal of Smer-SD to stop the privatization process of the six state heating companies. He was mainly referring to four deputies from Obyčajní ľudia.

Wednesday – 23rd February 2011

Slovenský plynárenský priemysel, a.s. (SPP, Slovak Gas Industry) wants to sell 1 billion cubic metres of gas per year in Czech republic within the upcoming six year via its company SPP CZ. This year the company has contracted purchases at a volume of 550 million cubic meters of gas. As the company SPP CZ informed, next year they want to increase their sales to 700 million.

Electricity prices are beginning to hinder also businessmen. According to the Republican Union of Employers (RÚZ) electricity prices are high and they are among the highest in the whole EU. According to RÚZ the main reason behind the high prices in Slovakia are mainly the disproportionately high distribution and transmission fees as well as an inconvenient and ineffective price regulation.

Thursday – 24th February 2011

Company Transpetrol, whose only owner is the state via the Ministry of Economy and Construction SR, is not allowed to pay out dividends. The decision was taken by the Highest Court. The Slovak distributor of oil was not allowed to disburse since March 2004 according to a preliminary provision. The provision was issued by the court in context of the case when a group of businessmen from eastern Slovakia demanded their 34 % share.

Critics of the way how the Regulatory Council and Regulatory Office are arbitrarily deforming information and data in order to manipulate the public opinion, states the Regulatory Council.

Diversification of gas pipeline connections will increase energy security of Slovakia, but can also bring smaller revenues for the state budget. The opinion was presented by chief of the Economy Committee at the National Council Stanislav Janiš (SDKÚ-DS).

State heating companies should be handed to towns, believes the opposition member of parliament Ján Slota (SNS). As he further stated, in case the companies would be sold to private investors, it might lead to higher prices for heat purchasers, meaning households.

Friday – 25th February 2011

Minister of Economy and Construction Juraj Miškov is convinced that there is a real possibility in the regulatory system of the energy sector in Slovakia to push down electricity prices. Actually the prices could be lower already this summer. As the resort further informed, chairman of the Regulatory Office for Network Industries Jozef Holjenčík also shares the same opinion.

An automatic one fifth increase in prices for heat after privatization of heating companies is nonsense. The statement came from the Slovak Union of Heat Producers as a reaction to the open letter that was sent by a number of Slovak associations representing households and consumers. „It is demagogic and false. A good legislative is able to eliminate illogical price increasing,” stated the representatives of the Union.  

Slovakia could become a small electricity exporter after finishing construction works on the third and fourth block of the nuclear power plant Mochovce, believes Stanislav Janiš (SDKÚ-DS).

According to Ľubomír Jahnátek handing over the six heating companies to towns would not be a good solution Privatization of the companies is not necessary as they have a good liquidity and are able to invest from their money. As he further stated, privatization could result in higher prices for heat supplies.

European Union and World

Monday – 21st February 2011

In the second quarter of 2011 the price for natural gas in Czech Republic could change. Price differences between various companies could differ markedly. One of the important factors will more than likely be the relatively high price for oil. Some suppliers should increase their price modestly; on the contrary, RWE wants to lower supply prices.

According the vice-chairman of the Ukrainian government, Kyiv should increase its diplomatic efforts when negotiating with Russia and EU about the modernisation of the gas pipeline system in the country. Erhij Tihipko also stated that he is worried about plans of Russia to build three underground storage tanks in Slovakia. According to him this could threaten gas transit via Ukraine.

As a result of the unrests in Libya, oil companies have started to evacuate their workers from the country. One of the companies is also the Austrian company OMV; however they did not halt extraction completely. BP and Royal Dutch Shell are also preparing for evacuation.

Tuesday – 22nd February 2011

The government in Poland gave a green light to the legislative which is needed in order to build nuclear power plant. However, the two law amendments still have to be approved by the Polish parliament.

The new legislative of the EU will according to Alexej Miller (Gazprom) restrict supplying the block with Russian gas and also discourage investors from modernising gas pipelines. The third energy liberalisation package of the EU will come into force in March 2011.

High oil prices pose a threat to global economic recovery, stated the chief of the International Energy Agency Fatih Birol. Price for American oil has reached its 2,5 year maximum after unrests in Libya disrupted extraction in the country.

International energy Agency (IEA) has sufficient strategic reserves for stabilizing markets in case of a complete disruption of supplies from Libya. The reassurance came from IEA chief of the oil division David Fyfe.

Wednesday – 23rd February 2011

Until now the decision whether to develop or not hydropower energy sources with a capacity bigger than 1 MW in Scotland was taken by the Ministry. From June this model will change. When realizing a project with a total installed capacity up to 50 MW, the decision will be taken by the city council. By changing the model the Scottish government wants to decrease the level of bureaucracy.

Czech Republic has signed the new charter of the International Energy Forum in Saudi Arabia.

Despite the outcomes of the situation in Libya it is expected that the oil sector in the county will not be left without any negative impacts according to experts.

Muammar Kaddafi allegedly ordered to destroy the oil pipeline leading to the Mediterranean ports. The situation in the country is markedly complicating export of oil and natural gas from Libya. 

Thursday – 24th February 2011

Romania might not be able to finish the construction of the nuclear power plant Cernavoda until the deadline which is 2017. The reason for extending the preparation phase is that the strategic investors stepped out of the project.

Vladimir Putin expressed his concerns during his meeting in Brussels about the implications of the third liberalisation package for his country. According to Putin the new legislative, which will unite the market with natural gas in the EU will decrease the market potential for Gazprom on the European market.

The current situation in North Africa will increase demand for natural gas from Russia, expects chief of Gazprom Alexej Miller. The increased demand should be saturated mainly through the prepared pipeline South Stream.

Friday – 25th February 2011

In 2010 Ireland imported almost quarter of its oil supplies from Libya, informed the International Energy Agency. Italy was on the second place and the third biggest imported of oil from Libya was Austria.

According to estimations of the International Energy Agency oil production in Libya fell by 75 %.

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