The Enel Group has grown a lot in just a few years, and since early 2000 has now almost doubled in size. It is now the second group in Europe for generating and distributing electricity, it operates in 40 countries and since 2009, its foreign activities have exceeded in numerical terms, those of Italy. Besides the Italian market, it is a leader in other markets, such as Russia, Spain and Latin America and of course, Central Europe through Slovenské elektrárne. Integration, not simply of operational synergies or economies of scale, but above all consisting of values that unify a very heterogenous firm, is today a primary objective, in order to tackle the prevailing uncertainty that is affecting international markets.
Changes on the global scene
Today’s vast economic, political and social changes represent a major challenge, not only for an international group, but also for any type of enterprise in any sector. The most explicit issue is that of the financial crisis and at present, we are witnessing what is defined as the third phase of the crisis, that of the sovereign debt – which poses serious implications and consequences on the global financial and economic system. The second is related to the geopolitical changes affecting the southern Mediterranean area, which until a few months ago, few could have foreseen, the so called Arab Spring, which has important implications also on the energy sector, especially as regards price and procurement of raw materials. The third is linked to the natural disaster that happened in Japan this year, at the Fukushima nuclear power plant and the subsequent decision – dictated by political rather than scientific or economic data – to review the energy policies of some countries: first in this part of Europe was Germany, that decided to gradually dispose of nuclear energy by the year 2022.
Facing up to these challenges can only take place by applying new energy and economic policies, that are able to find the right balance between a few key factors. First and foremost, safety of energy supplies – what we call in our sector energy security – which refers the origin and conditions for accessing energy resources, our dependence on it and the type of risks we have to face. The 2009 gas crisis and the consequences it had on this region of Europe is a clear example. Diversifying one’s sources has thus become an imperative today.
The second factor is environmental sustainability, that is: to pose a serious remedy to the consequences of increasing emissions of greenhouse gases and pollutants, by shifting toward what is defined as progressive decarbonisation of the economy, or in other words, the decreasing use of fossil fuels.
Finally, changes to the global scenario have highligted the importance of providing energy in a totally safe manner, at competetive costs, in sufficent quantities for the development of society and economic activities.
If we want to be able to find a compromise between these factors and solve this equation, we must necessarily work with a mix of energy sources that is as much as possible balanced, without excluding anything that modern technology has to offer.
The response of Slovakia
Slovakia has a well distributed production of electricity, among which the main sources available are: hydro, thermal and nuclear power. And, it is thanks to this mix that through Slovenske elektrarne we produce 90% of electricity without CO2 emissions. Nowadays, the only source that allows us to achieve these results – at very competitive costs and to actually provide enough energy without greenhouse gas emissions, is nuclear energy. To explain the benefits of this source of energy, the experts from the sector normally say that nuclear energy is not the only solution to energy problems, but that there is no solution without nuclear power.
Security is obviously a necessary condition in order to use this almost inexhaustable source of energy in a sustainable manner – and is a parameter that can be scientifically measured. Nuclear power plants in Europe are now under inspection on the initiative of the European Commission, which is reviewing in detail the security of all systems by means of the so-called “stress tests”. The preliminary results of these tests, which were also carried out in recent months here in Slovakia, are excellent. Investments in modernization in recent years have allowed the Slovak nuclear power stations to rank in first position for this type of technology with regard to safety, efficiency and productive capacity.
The project for completion of the Mochovce units 3 and 4 is, therefore, a further significant step forward in reaching the operative parameters and safety standards, comparable to the most modern nuclear power stations in the world. It is also the largest private investment on the part of a company that has ever been made in Slovakia and, we must remember that it will make Slovakia totally energy self sufficient and able to export a large share of its production. Today there are nearly 3,500 people on the site and more than 30 Italian companies involved in its construction, either directly or as subcontractors. It is a highly complex project that is going forward according to plan.
The energy market and prices
The price at which electricity is sold “wholesale”, i.e. – as in our case – the energy that producers sell to distributors and traders, is determined by the Energy Stock Exchange in Germany, which fixes the price on the market, based on the law of supply and demand, just as with any other commodity. As manufacturers, we can only follow the trend of the market and simply try to make our products as efficient and competitive as possible. The final price that companies pay also consists of transmission and distribution rates that amount to more than 50% of the final for SMEs , which include the so-called system costs (incentives that the state pays towards photovoltaic production). Unfortunately, we have inherited a situation that goes back many years, in which the distribution tariffs are among the highest in Europe. However, in today’s deregulated market, which separates distribution from actual selling to the final customer, a new interesting competition has arisen between companies responsible for the final link of the chain. Nowadays, numerous operators are operating and also Slovenske elektrarne has established a subsidiary company (SE Predaj) that offers complete services to customers. The advice to all entrepreneurs is surely to ask for various offers from both traditional suppliers – made up of companies related to the three traditional distributors (ZSE, SSE and VSE) – as well as from the new retail companies, by carefully evalutaing the various offers available.
The Italo-Slovak Chamber of Commerce
With more than 400 companies in Slovakia, Italy has become one of the first investors in this country, employing more than 35 thousand Slovak employees. For this reason, we surely have both the power and possibilty to consistently and effectively represent our interests. At the present moment, in these difficult circumstances affecting the European and global economy, the time has come for us to focus on the consolidation of our presence, by affording a more unifying and authoritative voice to all the Italian companies operating here in Slovakia. This can be achieved by making the already excellent connections with Slovak institutions and business associations even more operational and functional (we are the only foreign chamber of commerce, member of the board of the Slovakian Association of entrepreneurs that takes part in consultations with the government and trade unions), creating value-added services and benefits for those who are already settled in the territory, but who no longer need “start up” assistance.
Only by being close to what is actually taking place, at institutional as well as at economic level, can we really influence the decisions that are made and that have a direct impact on the work of our Italian and Slovak business associates.
By Michele Bologna
(Communication and Public affairs Director – Slovenské Elektrárne)