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IEA: The Slovak Republic is improving its energy security

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From left to right: Mr Maroš Šefčovič, Vice President of the European Commission for the Energy Union; Mr Peter Žiga, Minister of Economy of the Slovak Republic; Ms Marta Nováková, Minister of Industry and Trade of the Czech Republic; Mr Péter Kaderják, Minister of State, Energy and Climate Policy, Ministry of Innovation and Technology of Hungary; Dr Fatih Birol, IEA Executive Director (Photograph: IEA)

The Slovak Republic has made significant progress on several fronts of energy policy, and together with its neighbours and with the support of the European Union, has strengthened cross-border connections for natural gas, oil and electricity. This has served to improve its energy security and increase competition on energy markets, according to the International Energy Agency’s latest review of the country’s energy policies.

The Slovak economy’s energy intensity has declined in recent years while the share of renewable energy in the primary energy supply has increased. And thanks to the country’s nuclear power fleet, its electricity supply is relatively secure and largely decarbonised. The country is also one of the few in Europe to build new nuclear capacity. The Slovak Republic’s significant cross-border capacity facilitates both trade and security of supply in the integrating regional market. Its national electricity network is also being reinforced. This should allow for connection of new power generation, including renewables.

“For many years, improving energy security has been a top priority for the Slovak Republic,” said Dr Fatih Birol, the IEA’s Executive Director. “This policy brought impressive results as interconnections for gas, oil and electricity have been expanded and the country is no longer dependent on just one supplier but has access to a wide variety of energy sources”.

On the energy consumption side, the review finds that the government should stop determining end-user prices for electricity and natural gas. Instead, markets should be opened and vulnerable customers should be protected through social policy. Abolishing price regulation would also encourage energy saving and be consistent with the idea of developing smart grids.

Energy-related carbon dioxide emissions have fallen, but further measures are needed to limit them. Refurbishments of residential buildings are a success story for energy efficiency and will rightly continue. As in most countries, transport is a challenge for climate policy, but many good policies are outlined in the country’s new transport development strategy. Another area where change is needed is the country’s financial support to domestic coal production. This policy does not align with national decarbonisation goals and should be gradually eliminated.

The report also offers special insights into the heating sector. Slovakia has an extensive district heating sector which has significant potential for further decarbonisation, but investments are also required to modernise the heat networks. This modernisation should be supported through a regulatory reform that enhances efficiency and market flexibility.

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Austria’s efforts to accelerate its clean energy transition

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Austria is committed to reaching carbon neutrality by 2040 at the latest – 10 years earlier than the goal set by the European Union. To meet this ambitious deadline, the Austrian government will need to significantly step up decarbonisation efforts across all parts of its energy sector, the International Energy Agency said today in its in-depth review of the country’s energy policies.

Austria’s main challenge in its transition to a cleaner energy future – a challenge shared by many IEA countries – is the decarbonisation of the heating and transport sectors. In fact, Austria’s CO2 emissions have grown since 2014, largely driven by an increase in final energy consumption in buildings and transport. Until recently, Austria risked missing its 2020 mandatory emissions reduction target that covers sectors such as buildings and transport that fall outside the European Union Emission Trading System  – and was also not on track to reach the 2030 target. 

 “At such a critical time for clean energy transitions around the world, I commend the Austrian government’s determination to accelerate the transformation of its energy system,” said Dr Fatih Birol, the IEA’s Executive Director. “The IEA looks forwards to supporting this important policy.”

The IEA welcomes the government’s plans to phase out oil- and coal-fired heating systems by 2035, while ensuring energy security. The IEA also applauds the government’s commitment to a comprehensive tax reform to achieve true-cost pricing for carbon dioxide (CO2) emissions in sectors not covered by the EU’s emissions trading system, especially transport.

This in-depth review was finalised before the coronavirus (Covid-19) pandemic. The report therefore does not take into account the potential effects of the Covid-19 crisis on Austria’s energy sector and related greenhouse gas emissions.

“As Austria prepares stimulus plans to respond to the Covid-19 and resulting economic crises, the Austrian government should consider how these plans can help to create jobs while supporting the country’s clean energy transition,” said Dr Fatih Birol, the IEA’s Executive Director. “The IEA stands ready to provide advice, based on proven examples of past success and international best practice.”

Austria already has the third highest share of renewable electricity among IEA member countries at 77% of generation in 2018. It aims to raise this to 100% of electricity supply by 2030. This will require a resilient and flexible electricity system capable of accommodating a growing share of variable renewables. Such a system would support the electrification of the economy and the use of demand-side management opportunities offered by digitalisation, although this will require an enabling legal and regulatory framework for more active consumer involvement.

Austria’s vast resources of pumped hydropower storage will play an increasingly important role in both the Austrian electricity market and in the continued integration of the European market. These resources provide storage and flexibility that is needed to accommodate the growing share of variable renewable generation in the Austrian and European electricity systems. Moreover, Austria’s innovative “Greening the Gas” initiative is promoting the conversion of power to renewable gas facilities and seasonal storage of renewable gases, including hydrogen, that would help with the integration of high shares of variable renewables in electricity generation and would also make use of the country’s extensive gas storage facilities.

Austria is set to become an innovation leader in energy through the shift of the government’s research strategy towards implementation-oriented projects that accelerate the commercialisation of emerging technologies. Several innovative demonstration projects applying the use of hydrogen in the industry and transport sectors are continuing in close cooperation with the private sector.  

“I congratulate Austria on having a strong track record in mobilising private sector funding for research, development and innovation,” Dr Birol said. “The IEA also considers Austria’s recent initiative to report on energy research spending in the private sector, broken down by technology fields, as a best practice example among IEA countries.”

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World Bank: META 2 to Modernize the Energy and Mining Sectors in Brazil

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The World Bank Board of Directors approved today a US$38 million loan for the Energy and Mineral Sectors Strengthening Project II (META 2). Under the program, various Brazilian public institutions and sectoral agencies will be offered technical assistance activities varying from studies, training, methodologies, databases and IT equipment.

Brazil’s energy and mining sectors are among the largest in the developing world and are key to the country’s growth. However, both still face challenges to realize their full development potential and promote environmental sustainability and social inclusion. The project will allow the production of more reliable power, at lower prices, and the economic benefits of growing more efficient, resilient and competitive energy and mining sectors.

“The energy and mining sectors are among the main drivers of the Brazilian economy as they form the basis for the sustainability of the industrial and commercial sectors, in addition to leading to the provision of services that are essential for the quality of life of citizens. This project is a continuation of long-term collaboration with the World Bank. This new phase will promote changes to support the sustainable extraction and processing of minerals and metals to meet the needs of the global supply chain for inputs and new technologies. In energy, working together will make it possible to increase the efficiency and resilience of markets in Brazil,” said Bento Costa Lima Leite, Brazil Minister of Mining and Energy.

In Brazil, the electricity, oil and gas and mining and mineral processing sectors represent approximately 3, 13 and 4 percent, respectively, of the country’s Gross Domestic Product (GDP). These sectors, though, stand at different stages of development. The power sector is one of the most sophisticated in Latin America, but it is facing a number of challenges with respect to supply security, affordability and increasing its resilience to climate change. In the natural gas sector, Brazil has started adopting various measures under a new program aimed at establishing an open, dynamic and competitive natural gas market.This has significant potential to enhance energy security and to reduce industrial energy costs, but still needs to solve regulatory and governance issues. The mining sector requires modernization to achieve sustainable practices and a new strategy underpinned by sustainability.

“META’s first phase provided technical assistance to strengthen the capacity of key public institutions to increase the sector’s contributions towards a lower carbon growth path that is environmentally and socially sustainable,” says Paloma Anós Casero, World Bank Director for Brazil. “This second stage aims at increasing efficiency, long term infrastructure adequacy and climate resilience in both sectors, allowing them to grow in a more efficient and competitive way.”

Among the outcomes supported by the Project are:

  • Increase efficiency, long term infrastructure adequacy and climate resilience in the energy and mining sectors;
  • Institutional strengthening of energy and mining institutions to establish and implement strategies, policies and regulation; and
  • Implementation support, monitoring and evaluation, knowledge sharing and dissemination.

This fixed spread loan from the International Bank for Reconstruction and Development (IBRD) to the Ministry of Energy is guaranteed by the Federative Republic of Brazil and has a final maturity of 20 years, with a 19.5 year grace period.

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Energy Transition at the Heart of Africa’s COVID-19 Response

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The African Union Commission (AUC) and the International Renewable Energy Agency (IRENA) held a virtual high-level dialogue  to discuss Africa’s needs in responding to the COVID-19 crisis and the role of the energy transition in the post-pandemic recovery.

The dialogue brought together a number of ministers and high-level participants from Africa, Europe, the GCC and the European Union, as well as Vice Presidents of the World Bank and African Development Bank (AfDB), the UNDP Administrator, the Director-General of IRENA as well as representatives of the Africa Renewable Energy Initiative (AREI), and Sustainable Energy for All (SEforALL).

During the two-hour virtual event led by H.E. Dr. Amani Abou-Zeid, Commissioner for Infrastructure and Energy, African Union Commission, and IRENA Director-General, Francesco La Camera, participants highlighted that energy potential in Africa can turn the COVID-19 crisis into an opportunity for the continent and its population. They agreed that energy transition is critical to both the response to the crisis and to the post-pandemic recovery.

AU Commissioner Amani Abou-Zeid remarked that: “The energy sector cannot sit back and only react, it has to join in the fight as well while at the same time positioning itself to play a pivotal role in the recovery after the crisis. Through this forum, we hope to share the actions taken by various countries and organisations and the results they have had. This will provide lessons that will be instrumental in shaping the response and preparing for recovery.”

She highlighted the measures that the AU had taken including conducting wide consultations with regional and global stakeholders and developing an emergency, resilience and recovery action plan, which was adopted by the Bureau of African energy ministers on 12th May 2020. 

On his part, IRENA Director-General Francesco La Camera hailed the collaboration with the African Union noting that their commitment to work together in the wake of the pandemic was starting to yield results with the high-level dialogue as a milestone. He noted that: “Accelerating the energy transformation can help Africa respond to COVID-19, while allowing the continent to meet its medium and long-term objectives of a decarbonised, just and prosperous society. IRENA will continue to work closely with the African Union and partners to create pathways for accelerated renewable energy deployment in Africa, to bolster resilience in the face of the current pandemic while building a future of health, wealth and opportunity for millions of people across the continent.”

Emphasising the role of renewables, UNDP Administrator, Mr. Achim Steiner said: “The impact of COVID-19 on African economies is a major setback. Rapid policy responses across the continent have helped to mitigate the health crisis but socio-economic impacts could erode development gains of recent years. Expanding access to electricity through a bold expansion of ‘on-grid’ and ‘off-grid’ renewable energy is a major opportunity in the context of national stimulus and recovery programmes. They are economic, fast, shovel ready options to address energy poverty and accelerate Africa’s transition towards a clean energy economy of the 21st century.”

Participants observed that the adverse impacts of the pandemic are stretching the African energy sector’s capabilities thin. Unless urgent measures are taken to preserve the sector and prepare it for the post-pandemic recovery, the energy situation could impede the continent’s ability to cope with the crisis and economic downturn, ministers noted. Speakers agreed that it is imperative that the COVID-19 pandemic does not dampen efforts to increase energy access and clean cooking solutions which remain a major challenge in Africa. Today, around 548 million people still live without access to electricity and 894 million people lack clean cooking solutions.

The immediate priority for the African continent is to save lives, bring the health emergency under control and alleviate associated economic hardship. However, the recovery measures adopted should also address long-term development and create resilient economies. Utilising the locally available renewable energy resources that Africa is richly endowed with can alleviate immediate energy challenges, while creating jobs, advancing industrial development and promoting human welfare. It is estimated that renewable energy deployment could create an additional 2 million green jobs in Africa.

The meeting took place following an agreement between the two organisations to strengthen cooperation to combat the pandemic and pursue Africa’s development goals.

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