New nuclear power plant, connecting renewables, electricity sharing. A major amendment to energy legislation is here

If we put aside last year's "legislative whirlwind" in the form of amendments to ÚRSO decrees, energy legislation is likely facing the biggest changes in recent years. They will mainly affect the electricity sector, but the legislative process is worth following for companies operating in the gas, heating, or transport sectors, as well as for all energy consumers.

Since yesterday (March 17), the amendment to Act No. 251/2012 Coll. on Energy from the Ministry of Economy is in the inter-ministerial comment procedure. However, the ministry is also opening up another six laws with it.

The ministry had already announced several of the changes last year as part of the legislative plan for the current year, which we reported on Energie-portal.sk in December 2024. To a large extent, it is about the transposition of new EU legislation, including last year's reform of the electricity market design, but the ministry also wants to respond to "application practice" or various government intentions with an amendment containing hundreds of amendment points.

The inter-ministerial comment procedure will last until Friday, April 4. Most of the new provisions are to take effect in 2026. Exceptions are changes in the provision of subsidies through the Modernization Fund, where the ministry proposes effectiveness as early as November 1, 2025.

Responding to EU Directives

With the draft amendment, which contains almost 400 amendment points, the ministry is also opening up Act No. 250/2012 Coll. on Regulation, Act No. 309/2009 Coll. on the Promotion of RES, Act No. 391/2015 Coll. on Alternative Dispute Resolution for Consumers, Act No. 51/1988 Coll. on Mining Activities, Act No. 657/2004 Coll. on Heat Energy, and Act No. 71/2013 Coll. on the Provision of Subsidies under the Authority of the Ministry of Economy of the Slovak Republic, in addition to the Energy Act.

The largest set of proposed changes responds to new adjustments in European legislation. The ministry explains in the explanatory report that the amendment aims to transpose and implement requirements in the area of reforming the internal electricity market design, which are adjusted mainly by last year's Regulation 2024/1747 on improving the electricity market concept and Directive 2024/1711 on improving the electricity market concept in the Union. Consultants Ľubica Ragulová and Jan Kanta provided an overview of the most significant changes resulting from this regulation and directive in their text for Energie-portal.sk last year.

While the regulation is effective and directly applicable, most of the provisions of the directive were to be transposed into national law no later than January 17, 2025. However, Slovakia has repeatedly been late in transposing European energy legislation in the past, and the Commission has launched infringement proceedings against the country, for example, for the delayed transposition of the so-called winter energy package.

In addition to the aforementioned regulation and directive, the amendment from the Ministry of Economy also responds to the pre-last year's Directive 2023/2413, which revised Directive 2018/2001, Regulation (EU) 2018/1999, and Directive 98/70/EC, regarding the promotion of energy from renewable sources.

"The submitted draft law also represents a partial transposition of Directive (EU) 2024/1788 of the European Parliament and of the Council of 13 June 2024 on common rules for the internal markets in renewable gases, natural gas and hydrogen, amending Directive (EU) 2023/1791 and repealing Directive 2009/73/EC. The partial transposition is aimed mainly at adjusting the certification of the hydrogen transmission network operator and adjusting the rules for the functioning of the internal hydrogen market. The reason for the partial transposition is the need for earlier transposition of the provisions of the directive concerning the certification process," the ministry explained.

What all does the Ministry of Economy want to push through with the extensive amendment? We bring you a selection of the most important changes.

Overview of Proposed Changes

The ministry itself, in the explanatory report to its proposal, highlighted the following as the most important changes in the Energy Act:

• legal regulation of electricity market participants,
• legal regulation of flexible connection contracts to support the development of renewable energy sources in areas with limited or no connection capacity to the grid,
• legal regulation of electricity supply contracts or combined electricity supply contracts with a fixed price for a fixed period and other related changes in the area of consumer protection,
• expansion of the obligations of distribution system operators to publish data on the number of accepted and rejected connection requests to the distribution system, free distribution capacity and its calculation, information on the conditions for reserving distribution capacity, information on submitting connection requests to the distribution system and its conditions, and submitting the required documents for the connection request in electronic form, on their websites,
• legal regulation of risk management of suppliers in the electricity sector,
• legal regulation of setting support in the form of a balancing regime contract for electricity production from nuclear fuel,
• legal regulation of assessing the flexibility needs of the electricity system,
• legal regulation of administrative offenses and fines in the area of methane emissions.

Facilitating Electricity Sharing

The amendment should affect the currently strongly resonating topic of electricity sharing and its limitation given by the new ÚRSO decree. According to the legal analysis we brought on Energie-portal.sk, it contradicts the Slovak constitution and European legislation. Now, however, it could be "overridden" by law as a superior legal norm.

"The law regulates the already existing activity of electricity sharing by consumers, which has so far been regulated primarily at the level of secondary legislation in Slovakia, but the revised Directive (EU) 2024/1711 regulates sharing in more detail than the original Directive (EU) 2019/944. A new activity is being introduced on the market, the activity of the sharing organizer, which did not correspond to any of the existing business activities in the energy sector," explains the Ministry of Economy.

An important novelty will be that the law grants end consumers the right to participate in electricity sharing in a non-discriminatory manner, so that no end consumers are excluded from participation in electricity sharing. The proposed wording of the law prohibits suppliers from conditioning the conclusion of an electricity supply contract or a combined electricity supply contract with a prohibition on sharing electricity or limiting the amount of electricity that can be shared.

The ministry also wants to push through a provision that a consumption point or transfer point can be assigned to only one sharing group at the same time. The proposed legal regulation, according to the ministry, "protects the active consumer from unfair and discriminatory treatment by settlement entities who have contractually assumed responsibility for the deviation of electricity supply or consumption at their consumption or transfer point, by explicitly stating that consumption points and transfer points assigned to one sharing group can be assigned to different balance groups to meet the requirements of the directive."

As for other active consumers in the business sector, other than small and medium-sized enterprises, they will also be able to share electricity, but only from electricity production facilities with an installed capacity of up to 6 MW.

Difference Contract and TPS for a New Nuclear Source

With other proposed provisions, the ministry is preparing the ground for the new nuclear source project. The procedure for its construction was approved by the government last November, and the ministry wants to open the tender for the supplier in just a few months.

The ministry now wants to include in the law the possibility of direct support for electricity production from nuclear fuel after July 2027 in the form of a "balancing regime contract for electricity production from nuclear fuel." According to the Ministry of Economy, this will allow Slovakia to meet the requirements of Regulation (EU) 2024/1747 in the area of supporting production sources.

"This adjustment is based on the fact that if member states decide to support investments financed from public funds through direct price support systems for new low-carbon electricity production facilities from non-fossil fuels to meet their decarbonization goals, such direct support can only be realized in the future in the form of a two-way difference contract or an equivalent system with the same effects," the ministry states.

The so-called difference contracts, which are being pushed through in the EU for RES projects as well as in nuclear, represent a "two-way mechanism." This includes not only a guarantee of revenues for electricity producers, but also a limit on the upper limit of market revenues of the relevant production assets. In the case of higher electricity prices above the agreed level, the "additional" revenue is to be collected by the state, which, on the contrary, "pays extra" to the producer in times of lower market prices.

However, whether the state will actually use this form of support for the new nuclear source is open. "Participation in this form of support is voluntary and is to apply to new investments in production sources from July 2027. The use of this form of support is at the discretion of the ministry after prior notification by the European Commission," the explanatory report says.

The ministry sees possible financing of this mechanism either "from potential revenues from this mechanism" or from "released" financial resources in the RES support system, specifically from the tariff for system operation (TPS). This currently supports supported electricity producers, whose 15

New RES Connections with Limitations

Another major topic, which is an "evergreen" of energy policy and is also addressed by the currently submitted amendment, is the connection of renewable sources. The ministry reminds that the development of RES brings with it the need for the renewal and expansion of energy infrastructure, and therefore European legislation "tries to take into account the challenges in the area of enabling the connection of new sources to electricity systems."

For this reason, the department proposes to introduce the possibility of so-called flexible connection. "The aim is to enable connection to the electricity system even in areas with limited or no connection capacity. The main characteristic of such a connection is, in particular, the right of the system operator to restrict electricity producers in the possibility of using the electricity connection capacity in cases where such a restriction is necessary for system management in the given part of the transmission or distribution system under set or agreed conditions without compensation for such a restriction," the department explained.

According to the ministry, this should primarily be a temporary measure until the necessary adjustments or expansion of the system are made to allow the transition to "standard connection." However, the proposal also takes into account situations where such adjustments in the system would not be economically efficient, and in these cases, it allows the flexible connection contract to become a permanent solution in a selected area.

"In connection with the introduction of flexible contracts and the aim to promote transparency in the area of connecting sources to the system, the obligations of system operators to publish and regularly update data on the number of accepted and rejected connection requests to the distribution system, on free distribution capacity and its calculation, information on the conditions for reserving distribution capacity, as well as information on submitting connection requests and conditions for submitting connection requests to the distribution system and submitting the required documents for the connection request in electronic form, on their websites are also supplemented," the ministry stated.

Distribution companies will be required to publish interactive maps on their websites, which will contain legally defined information on the possibilities of connecting to the distribution system.

Electricity suppliers will also not avoid new obligations. The department plans to impose new requirements on them "in the interest of protecting end consumers of electricity." This includes, for example, extending the deadline for the last resort supply or the obligation of electricity suppliers to apply appropriate hedging strategies to reduce the risk of electricity supply failures. The electricity consumer also has the right to conclude an electricity supply contract or a combined electricity supply contract with a fixed price for a fixed period with the electricity supplier for a period of at least 12 months, if requested.

Preparations for Hydrogen

Another set of topics concerns the slowly emerging hydrogen market, the development of which the state is trying to stimulate with subsidy support. However, at the level of primary legislation (laws) and secondary legislation (decrees), this is still an area with several unanswered questions.

The current proposals are described by the ministry as a "partial transposition" of the fourth energy package in the gas sector, the legislative conditions of which are contained in one directive and one regulation and whose main goal is the decarbonization of the gas sector. The submitted amendment mainly addresses the adjustment of the certification of the hydrogen transmission network operator and the adjustment of the rules for the functioning of the internal hydrogen market.

"The reason for the partial transposition is the need for earlier transposition of the provisions of the directive concerning the certification process. This need arises from the setting of deadlines and time milestones adjusted in Article 57 of Regulation (EU) 2024/1789 on the internal markets in renewable gases, natural gas and hydrogen, which regulates the cooperation of hydrogen transmission network operators through ENNOH (European Network of Network Operators for Hydrogen)," the department stated.

Eustream, the operator of the Slovak transmission network, is part of several hydrogen initiatives in the Central European area (including the European Hydrogen Backbone initiative). In this context, according to the ministry, it is important to allow it to participate in the development of network codes, the adoption of ten-year hydrogen network development plans for the entire Union, the development of recommendations for technical cooperation of hydrogen transmission network operators, and the fulfillment of other tasks entrusted to ENNOH.

"For the participation of the transmission network operator in the Slovak Republic in ENNOH, it is necessary that national law regulates the certification process of the hydrogen transmission network operator as well as the basic regulation of the hydrogen economy, especially in the area of international hydrogen transport, as soon as possible," the Ministry of Economy argues. "In the context of the development of the hydrogen economy, the adjustment of the basic provisions necessary for the purposes of hydrogen distribution activities in the context of preparatory steps for creating conditions for the development of the hydrogen economy in the Slovak Republic is also proposed within the framework of partial transposition."

Expanding ÚRSO's Powers

Another set of changes concerns the Act on Regulation in Network Industries, in which the ministry proposes to expand the existing powers of ÚRSO. It gained new competencies last year, to which the office adapted with a new organizational structure and decrees.

This time, the expansion of ÚRSO's competencies is to concern changes in the Energy Act, for example, in connection with the new obligations of suppliers. ÚRSO's monitoring powers are to be strengthened in the area of applying electricity supply contracts and combined electricity supply contracts with a fixed price for a fixed period. The regulator is also to monitor "unjustified obstacles to electricity sharing."

"In order to make the sharing activity accessible to as many consumers as possible, the obligation to develop and publish non-binding model contracts, the subject of which is electricity sharing, is adjusted. This obligation will now be with ÚRSO. The office will also monitor how unjustified obstacles and unjustified restrictions on the market related to the development, consumption of electricity produced from own sources, energy sharing, the development of renewable energy communities and citizen energy communities are removed," the ministry explains.

In the case of contracts between suppliers and consumers, the office will now also be able to monitor the application of fixed-price contracts for a fixed period and the risks associated with agreeing on such contracts for end consumers of electricity. At the same time, ÚRSO is to be obliged to process reports on the results of market development monitoring also with electricity supply contracts and combined electricity supply contracts with a fixed price for a fixed period.

Credits for Electricity from RES in Transport

The ministry also proposes a wide range of changes in the Act on the Promotion of RES. It summarizes them in five main points, where it mentions:

• legal regulation of the principle of so-called cascade use of wood biomass according to the highest economic and environmental added value,
• legal regulation of setting support in the form of a balancing regime contract for electricity production from selected renewable sources,
• legal regulation of the introduction of a credit mechanism issued for electricity from renewable sources used in transport, the method of their issuance, registration, trading, and application,
• legal regulation for RES targets in the field of transport and industry,
• legal regulation of obligations related to the production of biofuels, bioliquids, and fuels from forest biomass.

A completely new feature is to be the mechanism of credits issued for electricity from RES used in transport. The aim of the Ministry of Economy in this case is to meet the requirements of European legislation on the decarbonization of transport, where RES are being pushed through more slowly than in electricity or heating.

According to the new requirements of EU legislation, member states are to incorporate a credit market (for public and possibly private charging) into their national legal frameworks to enable electricity producers from RES to contribute to fulfilling the obligation set by individual member states for fuel suppliers in their territory.

"Credits will be issued for the amount of electricity from RES that was produced in the balance period by the holder of an electricity production permit from renewable sources, for which an electricity production permit was issued, connected at the consumption point and transfer point, where a charging station is also connected," the ministry announces, stating that the entire system of management, registration, balance and related trading with credits will be managed by the short-term electricity market organizer, the company OKTE. It already manages a similar system of guarantees of origin, which are subsequently traded in auctions.

Experience from abroad where such a credit system has already been introduced and is functioning (e.g., the Netherlands, Germany), according to the Ministry of Economy, shows that the system "significantly helps the economic return on investment in public charging points and motivates the expansion of the network of charging points for electric cars." The ministry expects, based on foreign practice, that at average credit values between €0.03 – €0.06/kWh and an average charging price at normal speed around €0.50/kWh, the credit price itself would cover approximately 10% of the electricity price charged to the electric vehicle driver by the charging point operator.

"At the same time, foreign experience shows that credits have significantly improved the business case of charging stations and encouraged charging point operators to quickly install chargers, because credit revenues help to shorten the payback period of chargers by almost half, from 13 to 7 years for public charging stations with a median consumption of 6 MWh/year," the Ministry of Economy claims.

Similar to nuclear projects, direct support in the form of a "balancing regime contract" is to be introduced into the law in the case of RES as well. According to the Ministry of Economy's proposal, it will apply to support for electricity production from wind, solar, geothermal, and water energy. The state will be able to allocate this form of support based on an auction and must include a "two-way mechanism that includes not only a guarantee of revenues for electricity producers, but also a limit on the upper limit of market revenues of the relevant production assets."

Source: www.energie-portal.sk