At the beginning of September, the news broke – the Šoštanj Thermal Power Plant is facing bankruptcy! Minister of the Environment, Climate and Energy Bojan Kumer appeared before the Slovenian public as a saviour. He announced an intervention law to be adopted in November at the latest. In addition, a special law is being prepared to exclude the entire thermal division from the Slovenian Power Plants Holding (HSE). But the document from the Slovenian Sovereign Holding (SDH) that we received to our editorial office shows that we are in the midst of a so-called media “shock therapy”. The separation of the thermal division from the Slovenian Power Plants Holding is not a crisis solution, as they would have us believe, but part of the long-term strategy of the energy lobby. With the ultimate goal, as the commentator Vane Gošnik predicts: the destruction of the Slovenian Power Plant Holding and the subsequent merger of the remnants with the companies GEN-I and GEN Energija (GEN Energy), and the creation of an energy monopoly with one trader and one electricity producer.
At a press conference on the 3rd of September, Minister Bojan Kumer announced the preparation of interventionist legislation to turn the Šoštanj Thermal Power Plant into a public company and to provide a substantial financial injection to enable it to continue operating. Due to severe financial problems, the state is also preparing to eliminate the thermal division, which consists of the Šoštanj Power Plant and the Velenje Coal Mine, from the Slovenian Power Plants Holding, explaining that the Holding is doing well, while the thermal division is making a loss.
The Minister of the Environment, Climate and Energy was a guest on the MMC web portal the same evening. He justified the need for a state bailout and the transformation of the Šoštanj Power Plant on the basis of the current unfavourable market conditions. “The market conditions do not allow for a cost price for the operation of the Šoštanj Thermal Power Plant and the Velenje Coal Mine,” he said.
It is not about the current situation, but about …
The document we present below is part of an internal document of the Slovenian Sovereign Holding (SDH), which was produced at the end of last year. It proves that the exclusion of the thermal division from the Holding is not simply the result of unfavourable “market conditions”, but the result of long-term ideological and perhaps (as you will read below) also purely private interests of the representatives of the current government.
In the Holding’s starting points for the preparation of the state’s investment management strategy, in the section called ‘Sector strategies and capital investment statement by sector’ (subsection ‘Energy sector’), we can read that the objective is to create “a single electricity generation pillar, within which business processes are optimised and human and financial strength is consolidated.”
And then, importantly, “Preliminarily, with the objective of unbundling the coal and lignite electricity generation activities of the Slovenian Power Plants Holding into a so-called thermal power company by the end of 2024, unlocking significant additional investment potential for the implementation of an accelerated green transition”.
In short, the “unbundling” of the Velenje Coal Mine and the Šoštanj Thermal Power Plant is not “merely” the result of unfavourable market conditions, but, as they state, primarily intended to raise capital for investment in the green transition.
In the same document, among the Holding’s strategic orientations and objectives, we again find the stated intention to separate the Velenje Coal Mine and the Šoštanj Thermal Power Plant from the Slovenian Power Plants Holding.
All of this is even more explicitly stated in the section entitled “Slovenian Sovereign Holding’s expectations of the company (Slovenian Power Plants Holding)”, where we can read that Sovereign Holding expects a complete analysis of approaches to the unbundling of the thermal division from the Power Plants Holding by the end of 2024 at the latest, with the intention of ensuring financial stability and investment potential of the Slovenian Power Plants Holding.
Finally, we come to the crowning proof: the (admittedly unsigned) request from the Slovenian Sovereign Holding for the preparation of a restructuring plan for the Slovenian Power Plants Holding or a plan for the separation of the Velenje Coal Mine and the Šoštanj Thermal Power Plant from the Slovenian Power Plants Holding. As can be seen from the document, the request is dated the 5th of December 2023. It is, therefore, almost a year old.
The fact that this is a long-term plan is also demonstrated by the timeline, which breaks down the process of the thermal division of the Power Plants Holding by date.
As can be seen, the first milestone for the phase-out was set as early as the 31st of December 2023. These milestones have then continued throughout this year. Interestingly, on the 31st of April this year, the milestone “Financing required during the closure phase of the thermal division: Green Transition Funds, EU Cohesion Funds, State Aid (if compatible with EU rules)” was set.
The issue of financing the closure of the thermal division of the Power Plants Holding is particularly acute. Current estimates of the loss to be made by the Šoštanj Thermal Power Plant next year range from 150 euros to 200 million euros. The loss, by the way, is largely caused by the so-called “emission allowances,” which we have previously already reported on. The cost of closing down the Šoštanj Thermal Power Plant and the Velenje Coal Mine will not be cheaper than 2 billion euros, according to Aleksander Mervar, Director of the Eles company that is responsible for the reliable operation of Slovenia’s electric power transmission system. These days, not much is heard about the European Union’s “green transition funds” or “cohesion funds”. The talk is mainly about state aid, i.e. taxpayers’ “aid”.
All roads lead to Gregorčičeva Street and the GEN group – at the top of which is Golob
We asked Vane Gošnik, Vice-Chairman of the First Democratic Assembly and former President of the Greens of Slovenia, about the developments, and he believes that the interests of the current government are what is really behind the announced separation of the Šoštanj Power Plant and the Velenje Coal Mine from the Slovenian Power Plants Holding. That is to say, the government, its Prime Minister Robert Golob, Minister Bojan Kumer, and others are behind this.
“We would now like to transfer the Šoštanj Power Plant directly to the Slovenian Sovereign Holding. I assume that the latter cannot sell the former as long as it is part of the Slovenian Power Plants Holding, but if the Šoštanj Power Plant and the Velenje Coal Mine were transferred to the Slovenian Sovereign Holding, they could simply be classified as non-strategic investments and then sold. The worst thing is this: if the Šoštanj Power Plant and the Velenje Coal Mine were to be separated from the Power Plants Holding, the main reason for the existence of the latter would also cease to exist. The Slovenian Power Plants Holding was set up in 2001 for the very reason of creating an energy mix of hydro and thermal energy. It is an excellent portfolio that enables stable electricity production. If the thermal division is separated from the Power Plants Holding, the so-called raison d’etre of the Holding also ceases to exist. I predict that, directly after this, there will be thoughts of moving the trading part of the Holding to GEN-I, on the grounds that a small country like Slovenia does not need two electricity traders. This is one more step towards the ‘realisation’ that the existence of the Power Plants Holding no longer makes sense. Then, the next step will follow, and the rest of the production part of the Holding will be merged into GEN-Energia. The result will be one trader, controlled by Golob, and one producer, GEN Energija,” Gošnik predicts.
Golob is in a hurry …
As Gošnik predicts, the ultimate consequence of the above economic and political manoeuvres will be a significant deterioration in Slovenia’s energy self-sufficiency. The renewable energy sources that they intend to use to make up for the loss of electricity from the Šoštanj Thermal Power Plant will not be sufficient to meet demand, so we will be forced to import electricity, which will, of course, be more expensive than if we produced it ourselves. The consequences for households and industry will be catastrophic.
“Golob is in a hurry. He does not know how much longer he will be able to stay in power, so he needs to implement the planned changes as quickly as possible. Then, when the government falls, all those who came out of the energy sector will go back into it. But by then, it will be tailored to their wishes. We will be left with expensive electricity bills and certainly with electricity cuts, as already foreshadowed by the new 5-tariff system,” Gošnik concluded.
Ž. K.
