Balancing the Slovak Energy Market After the Adoption of “Fit for 55 Package”

Abstract

Research background: Slovak energy sector is based on older strategic documents setting national interests within energy policy and energy security (before 2014). “Fit for 55 package” proposed by European Commission in July 2021 is one of the most politically ambitious projects after WW2 and brings crucial changes for EU27 energy systems, especially for CEE countries. Purpose of the article: To analyze the potential impact of the “Fit for 55 package” objectives and consequences on the energy system of the Slovak Republic in terms of fossil fuels substitutes. Methods: Authors use Energy Balance Sheet (EBS) to outline the unprecedented impact of the EU policy on the Slovak energy system and alternative scenarios for its development. Simulating the impact of CO2 emissions cuts via Gretl software, the authors outline crucial changes in the energy system and subsequent energy shortages within the Slovak energy market, which have to be replaced (in electricity generation, natural gas, and transportation fuels). Findings & Value added: According to the authors´ findings, possible substitutes (hydrogen or renewable energy sources) will not fully cover the future demand, and authors suggest possible solutions. Secondly, the impact on transportation capacities and energy transportation corridors are outlined. Finally, the authors stress that political efforts oversize economic and energy reality, especially in Slovakia, and policymakers should better consider the specifics of the CEE energy systems and allocate financial grants for the upgrade of transport corridors

Keywords

• slovak energy market
• fit for 55
• energy security