New Slovene Government to Consider Building Second Nuclear Reactor

November 14, 2008

BBC Monitoring European

Plans to build a second nuclear reactor at the Krsko Nuclear Power
Plant (NEK) have been around for years, but the new government has
made it a centrepiece of energy policy in the coalition agreement, saying it would
"consider the need to speed up the construction of a second reactor" and call a referendum on the issue.

The coalition partners also pledge to invest in extending the
life of the existing reactor, which is scheduled to run until 2023, and making
it a priority to find a location for a repository for radioactive waste,
which is to be built in the vicinity of the power station.

The Krsko N-plant is also a part of plans to consolidate power
utilities, as the coalition agreement speaks about a tie-up between its 50 per cent owner, Gen Energija (the Croatian power utility HEP owns the other
50 per cent), and HSE, the largest electricity producer in the country with a portfolio of hydro and steam plants.

Krsko covers 20 per cent of Slovenia's electricity needs, but
that it after delivering half of the produced electricity to Croatia in
accordance with the bilateral agreement on the jointly-built power plant.

The state-owned electricity distributors - there are currently five regional distributors but the market has been fully liberalized - are also
in for an overhaul, as the coalition agreement says they would betransformed into "modern user-centred firms that are capable of competing and remaining a reliable supplier."

However, the plan involves leaving the current system intact and
merely bringing in private capital through strategic partners. The state would remain the majority owner in distributors and the grid operator, but it would gradually reduce its stake to no less than 51 per cent.

Overall, the coalition agreement speaks about promoting energy
efficiency in households, the corporate sector and in transport, the main
goal of energy policy being "maximum self-sufficiency in electricity supply".

The parties also pledge to promote renewables, in particular with incentives for solar power plants with an output of under 500 MW, and the co-generation of heat and electricity.

The document speaks about a new energy and climate policy for Slovenia, which will put emphasis on sustainable development.

"Know-how and funding will be invested in efficient use of energy and those renewable sources of energy that are technologically and economically most viable."

Energy policy is in the domain of the Economy Ministry and it played a very prominent role in the previous government under minister Andrej
Vizjak. He is a native of Brezice, a town not far from Krsko in the Posavje
region, where energy is one of the main industries.

In the new government the portfolio will be held by Matej
Lahovnik, who interestingly hails from another energy hub, Velenje, the home of
The biggest coal mine in the country and neighbour to Sostanj, which houses the
biggest coal-fired power plant in the country.