Renewable energy in Slovenia

Over the last decade, the Republic of Slovenia has been at the bottom of the EU Member States in terms of increasing the share of renewable energy consumption. Fortunately, the EU legal framework is pushing Slovenia to improve in this field. Under the current Integrated National Energy and Climate Plan (“NEPN”), Slovenia is committed to achieve a target of at least a 27% share of renewable energy consumption by 2030.  

The war in Ukraine has increased the need for the EU to end its dependence on fossil fuel imports from Russia as soon as possible. The war in Ukraine, together with other recent developments in the EU renewable energy sector, makes it almost certain that the targets currently set will be increased by the EU in the future. 

The latest draft proposal for the update to the NEPN shows that Slovenia will update its target for the share of renewable energy consumption by 2030 from 27% to around 30% - 35%. The proposed target seems optimistic, especially considering that Slovenia has not met the 25% mark in recent years and has had to make up the shortfall through statistical transfers. The cost of statistical transfers in the years from 2020 was around EUR 5 million, depriving Slovenia of funds that could have been invested in renewable energy investments, which would have brought both economic and environmental benefits to the country. 

The latest draft update of the NEPN was presented to the general public at the end of June 2023 (“Draft”) and subsequently submitted to the European Commission. 

With regard to renewable energy, the Draft states that Slovenia will actively work to improve energy efficiency in all sectors, thereby reducing energy consumption. In this way, primary and final energy consumption will be reduced. Slovenia will promote and encourage the use of renewable energy through appropriate incentive legal measures, known as positive legal discrimination, which will reduce import dependency on fossil fuels and subsequently strengthen national energy security.  

When adopting measures in the field of renewable energy, particular attention will be paid to the de-bureaucratisation, and acceleration, of the permitting process for the installation of energy production facilities. Slovenia will also actively pursue the introduction and rapid expansion of installation of solar and wind energy production facilities in areas with different primary uses (agricultural, road, water, etc.), the positioning of renewable energy sources (solar and wind) in Natura 2000 sites, and the accelerated solarisation of roofs in the public sector. 

Progress has already been made with the adoption of the Introduction of Installations for the Production of Electricity from Renewable Energy Sources Act, which will be presented in more detail in the next section. 

With the update of the NEPN, Slovenia intends to update its goal for the share of renewable energy consumption from 27% to 30% - 35% by 2030, with a share of 52% in the electricity sector, 41% in the heating and cooling sector and 26% in the transport sector (43%, 41% and 21% respectively in the current version of the NEPN). These targets are achievable by increasing the consumption of renewable energy, especially after 2025, due to a faster increase in renewable electricity generation and reducing gross final energy consumption. 

The NEPN foresees that the share of gaseous fuels from renewable sources in the total gas supply could also reach 10 - 30% by 2030.  Guidelines have also been set out for woody biomass, high quality wood from Slovenian forests should be processed into products with the highest possible added value, while only lower quality wood should be used for energy purposes (as a source for synthetic fuels and synthetic gases). Slovenia will also develop technologies for the production of sustainable biofuels, advanced synthetic gaseous and liquid fuels, and will use imported fuels until it has developed and established its own production. 

Other goals regarding renewable energy include: 

• to achieve at least two-thirds of energy use in buildings from renewable energy; 
• to achieve at least a 3% (currently 1.3%) annual increase in the share of renewable energy in heating and cooling in the industry sector, including waste heat and cold (priority resource utilisation); 
• to achieve at least 30% share of renewable energy (including surplus heat) in industry; 
• to achieve at least a 2 - 3% annual increase (currently 1%) in the share of renewable sources and surplus heat and cold in district heating and cooling systems and to achieve a 25-40% share of this generation; 
• continue to actively promote the development of the renewable energy community and target renewable energy investments to areas where additional major grid investments are not needed. 

The NEPN will be published late next year when it is submitted to the European Commission, but the current draft indicates that Slovenia is moving in the right direction with its strategy. 

In order to achieve climate neutrality and higher targets for the share of renewable energy in gross final consumption, the Introduction of Installations for the Production of Electricity from Renewable Energy Sources Act (“ZUNPEOVE”) was recently adopted. ZUNPEOVE amends certain existing Slovenian laws and transposes relevant EU directives to remove barriers that exist in the authorisation of the construction of energy storage facilities.  

ZUNPEOVE regulates priority areas for the siting of photovoltaic and wind energy installations. To avoid lengthy and complex administrative zoning and permitting procedures, the law requires the State to identify potential locations for the development of solar and wind energy projects through spatial planning acts. These priority areas will be defined by a national strategic act and further specified by a national implementing spatial act.  

ZUNPEOVE also regulates spatial planning and permitting, focusing on the comprehensive environmental impact assessment procedure and the thresholds for carrying out a preliminary environmental impact assessment in the case of the siting of stand-alone photovoltaic installations.  

In addition, ZUNPEOVE provides for the possibility of "dual use" in areas with untapped opportunities by allowing construction of solar or wind energy installations in areas where they would otherwise not be possible due to various restrictions in the applicable sectoral regulations (e.g. the construction of solar power plants over fields or orchards which would also serve as a roof to protect against hailstorms).  

ZUNPEOVE also prescribes an obligation of installation of photovoltaic power plants on all new buildings with a roof area of 1,000 sqm or more (and, after an appropriate transitional period, also on existing buildings with a roof area of more than 1,700 sqm), unless this is not possible due to the type and location of the building or other conditions, such as the possibility of connection to the electricity grid. Furthermore, ZUNPEOVE reduces the number of consents required for the installation of a photovoltaic installation on a co-owned property or on the common parts of a commonhold building. Under certain conditions, ZUNPEOVE also provides for the establishment of a free of charge easement or building right for the installation, maintenance, and operation of photovoltaic installations on facilities owned by the State or a self-governing local authority. 

ZUNPEOVE sets out rules for the promotion of exploration and production of electricity through the use of geothermal energy and for the first time in the country's history enacts so-called “regulatory sandboxes” for the testing of new technologies. 

In 2023, the European Commission adopted a temporary framework for state aid in times of crisis to accelerate the green transition and reduce dependency on fossil fuels. Under the framework, the European Commission approved a EUR 150 million state aid scheme for Slovenia to promote the use of renewable energy, heat, and energy storage. The approved state aid will help Slovenia achieve its current target of ensuring at least a 27% share of renewable energy in total energy consumption by 2030 and of having two-thirds of consumption in buildings sourced from renewable energy.  

In order to be able to provide grants to support the development of renewable energy, heat, and energy storage, on 23 June the Slovenian government adopted the Decree on Investment Aid to Promote the Deployment of Energy from Renewable Sources (the “Decree”). The state aid scheme will provide direct grants of up to EUR 25 million per beneficiary, whereby a beneficiary can be a legal person, a cooperative, a natural person engaged in a gainful activity or a self-governing local authority. The distribution of the state aid is expected to start in September 2023 based on a public call for applications, with the aid to be provided no later than December 31, 2025.  

According to the Decree, the scheme will finance the purchase and installation of new production plants for:  

• the production of electricity from photovoltaic or other solar energy, geothermal energy and hydropower with an installed capacity (i) equal to or less than 1 MW or (ii) equal to or less than 6 MW, if the production installation is 100 % owned by a small or medium-sized undertaking or a community in the field of renewable energy sources formed as a legal person;  
• the production of electricity from wind energy with an installed capacity (i) equal to or less than 1 MW or (ii) equal to or less than 18 MW, if the production installation is 100 % owned by a micro or small undertaking or a community in the field of renewable energy sources formed as a legal person;  
• cogeneration of electricity and heat from woody biomass, geothermal energy, biogas, landfill gas and sewage gas;  
• heat production from woody biomass, solar and geothermal energy, including heat pumps. 

In general, the amount of aid received shall not exceed 45% of the total cost of the project, whereby the amount of aid can be increased by 20% if the aid is granted to a small enterprise or by 10% if the aid is granted to a medium-sized enterprise. The available state aid is intended only for the financing of new energy production plants and cannot be granted for the purchase of used, refurbished, pilot or prototype production plants.  

State aid may be granted to projects for which works started after 9 March 2023 and has not been completed by 24 June 2023, or for which the energy production plant has not yet been in operation or connected to the grid before 24 June 2023. The energy production plant must be put into operation within 30 months of the decision to grant the aid.