In 2050, Slovenia will be a climate-neutral society that is resistant to climate change and that will function on the principles of sustainable development. The achievement of such an ambitious goal will require the 100% commitment of all stakeholders.
In addition to obligations, that goal also brings opportunities for individuals, society and the economy. The expected positive effects include the reduction of dependence on energy imports, new development opportunities on common energy markets, the creation of green jobs, nature conservation and the improved competitiveness of Slovenian companies.
The GEN Group produces 99% of electricity from low-carbon energy sources: nuclear and hydro energy. Our reliable operations contribute to the stability of the electric power grid. We thus contribute to a high standard of life and the improving competitiveness of the Slovenian economy.
We do not see the goal of achieving climate neutrality as simply our responsibility; we see it first and foremost as an opportunity for decarbonisation and the strengthening of the resilience of the GEN Group and Slovenian society, which we supply low-carbon electricity.
Reliability, equity and environmental and climate sustainability. The three principles of the energy trilemma that the GEN Group pursues in a balanced manner through its sustainable operations.
Our core values are: reliability, safety, sustainability and knowledge. We pursue those values in all three core activities of GEN Group companies: electricity production, trading and sales, and the planning of development and investments.
The GEN Group is one of the largest and strongest business groups in investment terms in Slovenia.
We manage an integrated electricity supply chain:
Interview with senior management
The year 2020 and the COVID-19 pandemic brought a number of new challenges and experiences for the energy sector, the commercial sector and society as a whole. Although a health crisis of such dimensions was unexpected, the GEN Group managed all associated risks with the awareness that the stable and safe supply of electricity is a precondition for the functioning of each and every social system and for the well-being of Slovenia’s citizens.
We spoke with the senior management of the GEN Group about achieved results, which are based on synergies between the Group’s production, sales and marketing and development and investment activities, and about the Group’s future plans. The latter are a strong indication of the core values that the GEN Group pursues in its operations, in particular reliability, environmental and climate acceptability, safety and competitiveness.
Despite the unusual conditions, 2020 was a successful year for the GEN Group in business and operational terms. Which results would you like to highlight?
Novšak: The GEN Group’s energy facilities operated very stably in 2020 and, for the most part, achieved or even exceeded planned results. The successfully concluded year is a reflection of our timely response to the COVID-19 epidemic and the professionalism of all employees. The fact that we did not have a scheduled major overhaul in 2020 contributed to the reliability of production. The Krško Nuclear Power Plant (NEK) operated at full capacity for the majority of the year, except for the shut-down of the power plant for safety reasons following a strong earthquake in neighbouring Croatia in December. The power plant produced 6,040 GWh of electricity, which is more than planned. Despite less-than-ideal conditions, the NEK prepared for a major overhaul that was successfully completed in the spring of 2021.
The GEN Group’s energy facilities operated very stably in 2020 and, for the most part, achieved or even exceeded planned results. The successfully concluded year is a reflection of our timely response to the COVID-19 epidemic and the professionalism of all employees. The fact that we did not have a scheduled major overhaul in 2020 contributed to the reliability of production. The Krško Nuclear Power Plant (NEK) operated at full capacity for the majority of the year, except for the shut-down of the power plant for safety reasons following a strong earthquake in neighbouring Croatia in December. The power plant produced 6,040 GWh of electricity, which is more than planned. Despite less-than-ideal conditions, the NEK prepared for a major overhaul that was successfully completed in the spring of 2021.
We generated more than EUR 2.2 billion in turnover, while profit was up by 33% relative to 2019, a reflection of our prudent and effective response to the epidemic. Group companies made investments in the amount of EUR 104.59 million, including the implementation of the Safety Upgrade Programme (SUP) at the NEK and the construction of the number 7 backup gas-fired production unit at the TEB, which was completed on schedule, despite the difficult conditions.
The GEN Group ranks among the strongest groups in Slovenia in terms of investments. Contributing significantly to business excellence was the sales and marketing element of the GEN Group, which successfully managed market risks through an appropriate response to the demanding market conditions. The GEN-I Group achieved a 25% share of the retail market for the first time in 2020, and thus consolidated its position as the largest electricity supplier in Slovenia.
»A framework for discussing the strategic infrastructure investment in the new nuclear power plant is thus crucial in terms of energy independence at the national level.«
How has the coronavirus pandemic affected the operations of the GEN Group and its companies?
Novšak: By adopting the appropriate measures in a timely manner, we ensured the efficient operations of all GEN Group companies. We ensured the stable and uninterrupted supply of electricity to Slovenian households, the public sector, healthcare and educational institutions, which were hit particularly hard, and the commercial sector. We strengthened awareness about how important energy is as a strategic commodity, in addition to water and food. The supply of energy is a key condition for the normal functioning of society.
In uncertain and stressful times, maintaining a reliable and self-sufficient electric power grid ensured the smooth functioning of social systems, in particular healthcare institutions, transport and all other sectors that have been crucial in the fight against the coronavirus. All GEN Group companies operated smoothly in 2020, and responded professionally and effectively by adopting the appropriate measures and making the required changes to work processes. Despite restrictions, we provided all necessary services, and ensured that our power plants operated safely and in accordance with high technological standards.
Levičar: Of course, our effective response to the pandemic would not have been possible without the adoption of prudent business decisions and the optimisation of technological and business processes in the past. The GEN Group is aware of the importance of energy security, and one of the most important building blocks of the latter in Slovenia is the Krško Nuclear Power Plant. This was particularly evident this year, when the circumstance of the pandemic and the resulting changes in the electric power grid dictated that the NEK play a crucial stabilising role, not only at the national level, but in the wider region, as well.
»I am sure that awareness of the importance of the stable, safe and low-carbon energy provided by the GEN Group has also strengthened amongst Slovenia’s citizen over the last year.«
Increasing awareness of the importance of nuclear energy can be seen across Europe and the world, while that importance has also been acknowledged by the Slovenian government. I am sure that awareness of the importance of the stable, safe and low-carbon energy provided by the GEN Group has also strengthened amongst Slovenia’s citizen over the last year.
How would you assess support for nuclear energy?
Novšak: Awareness is increasing in Europe that to achieve climate goals we must take into account the principle of technological neutrality, and treat all low-carbon energy sources equally, both in the scope of national, European and international energy strategies and in the framework of financial support mechanisms. A recent discussion about the EU taxonomy for sustainable financing, through which the EU will promote investments in sustainable technologies and companies, and contribute to a climate-neutral economy, confirmed the European Union’s consistent efforts towards climate neutrality by 2050, with a new goal regarding the net national reduction of greenhouse gas emissions by at least 55% by 2030. Countries must be allowed to formulate their own energy policies in order to achieve such ambitious objectives. Those policies should be in line with conditions that are characteristic for individual countries (i.e. with respect to the availability of energy sources and the existing energy infrastructure), and with their goals to achieve energy self-sufficiency and reduce dependence on energy imports.
The clear and decisive finding by the scientists of the European Commission, in the scope of the Joint Research Centre (JRC), that nuclear energy is, indeed, a sustainable energy source is crucial for decisions regarding the future use of nuclear energy in the EU.
Last July, the Slovenian government placed the construction of a second unit at the nuclear power plant on its list of priority investments. How is the JEK2 project progressing?
Levičar: At the beginning of 2020, we completed the review of the prefeasibility study and submitted an application to the Ministry of Infrastructure for the acquisition of an electricity generation licence. We updated that application in February with the consent in principle issued by ELES for connection to the grid. At the ministry’s request, we supplemented the application in November with the findings of a study on the connection of JEK2 to the electric power grid, which confirmed the economic and environmental justification of the project. The JEK2 is not only feasible, but is also crucial for the decarbonisation of the Slovenian electric power grid and for maintaining the grid’s stability.
It is completely clear today that complaints about unnecessary investments by the GEN Group in preparations for the construction of a second unit at the nuclear power plant were unjustified. The prefeasibility study and other preparatory works were crucial for the thorough verification of all key elements of the project.
JEK2 will make it possible for Slovenia to nearly triple its production of low-carbon energy. JEK2 will have a production output of 1200 MW, while we will employ pressurised water reactor (PWR) technology, with which we already have experience. We are currently completing the first phase of the project and are preparing for upcoming strategic decisions. The success of nuclear energy in the creation of a clean and modern electric power grid can also be seen in other European countries.
Which European countries would you highlight as examples of best practices in terms of the current and planned use of nuclear energy in the future?
Levičar: In France, where the majority of electricity is produced by nuclear power plants, they will build five new power plants, while the Netherlands is also considering increasing its nuclear capacities. The start-up of a new reactor is imminent in Finland, and we are also seeing an increasing number of new players in the field of nuclear energy, primarily in Central and Eastern Europe. France and Sweden are also excellent examples of the decarbonisation of the energy sector through the use of nuclear energy.
It is important to know that nearly half of the EU’s low-carbon electricity is produced from nuclear energy. The situation is similar in Slovenia, where nuclear energy is the largest single source of low-carbon energy. It is increasingly clear that nuclear energy, as the most stable source for the production of low-carbon electricity, and less-stable renewable energy sources represent a winning combination for decarbonisation and the achievement of the objectives of climate neutrality.
Slovenian energy and climate plans and strategies, such as the National Energy and Climate Plan and the Climate Strategy, also highlight the need for low-carbon energy sources and the decarbonisation of the electric power grid. How will the GEN Group contribute to the achievement of those goals?
Novšak: The climate strategy and goals call for the decarbonisation of the electric power grid, energy efficiency, energy security and the reduction of the electric power grid’s dependence on imports. These are important and burning challenges faced by the entire world. The GEN Group addresses these challenges comprehensively along the entire vertical, from production, where we are increasing the capacities of smaller- and larger-scale low-carbon production sources, to sales and marketing to end-customers, where we adapt our portfolio effectively to market needs. Addressing challenges comprehensively is crucial, as strategic goals are closely linked to one another. It is not enough that we achieve a low-carbon energy system; we must also ensure that the system is safe and reliable, and effectively supports the needs of contemporary society, energy customers and the users of energy services. The climate strategy in this area appropriately acknowledges the important role of nuclear energy.
Levičar: Through the Resolution on the Long-Term Climate Strategy of Slovenia until 2050, which envisages the long-term use of nuclear energy, we have achieved the first of three key milestones in the JEK2 project. With the aforementioned document, the Slovenian government has made clear its intent regarding the construction of JEK2, and has begun carrying out administrative procedures and the preparation of documentation to facilitate the associated investment decision. During the next phase, we will make preparations for construction. That phase will be completed with a final decision regarding the construction of the power plant, and will be followed by a third phase that will encompass the actual construction of the power plant.
You mentioned that you are pursuing the goals of the Climate Strategy in the area of sales and marketing, as well. Which activities are key in that regard?
Levičar: The GEN-I Group performed well in 2020 and achieved a market share of 25% for the first time. At the beginning of the coronavirus pandemic, we offered customers a 15% reduction in the price of electricity. We also presented the ‘CO2-free electricity’ initiative to the market in 2020. Through that initiative, we offer customers electricity that is produced exclusively from carbon-free sources, i.e. sources that produce the lowest levels of carbon dioxides. Customers can choose between solar, nuclear and hydro energy. The project is a decisive response to burning social challenges, while it is also an important source of information regarding the need to decarbonise the electric power grid and regarding the importance of individual sources to achieve those goals. To those households and organisation that make energy decisions, it provides a choice and thus facilitates a more active role.
How did 2020 emphasise the importance of the reliable and self-sufficient supply of energy?
Novšak: The pandemic shed light on the importance of self-sufficient supply and the reliability of numerous sectors, not only the energy sector, but also the healthcare sector, the food industry, education, transport and other sectors. Particularly during the spring, i.e. during the first wave of the epidemic when there was a sudden halt to life as we previously knew it, we were witness to the consequences of the lack of preparedness of certain social sub-systems in Slovenia and elsewhere.
The Slovenian electric power grid, which the GEN Group supports through a winning combination of low-carbon nuclear and hydro energy, withstood the pressures of the difficult conditions, as the result of an appropriate response during the crisis and strategic thinking in the past. Strengthening awareness that today’s decisions are shaping the destiny of generations that will be at the height of their creative powers in 2050 is one of the missions of all energy companies in Slovenia, not just the GEN Group. A framework for discussing the strategic infrastructure investment in the new nuclear power plant is thus crucial in terms of energy independence at the national level.
The JEK2 is a key measure for accelerating the achievement of the goals of climate neutrality and the decarbonisation of the Slovenian electric power grid, while it will also contribute to reducing Slovenia’s dependence on energy imports.
We are aware of the interdependence of capitals from which we create value for the key stakeholders.
Low-carbon energy sources: primarily nuclear and hydro.
Financial resources (mainly through equity and borrowing) needed for providing comprehensive electricity supply services.
Employees and intellectual capital
The knowledge, skills and dedication of our employees for performing our principal activities.
Relations with external stakeholders in providing comprehensive electricity supply services.
Promoting the understanding and appreciation of the importance of energy supply for our daily lives and enduring social prosperity.
We are guided by an appreciation of the importance of having a comprehensive supply of electricity in order to meet the daily needs of modern society: its people, product and service industries, public sector and other consumers. We seek to create and strengthen positive sustainable connections between energy, its use and social well-being.
Generating electricity with which we contribute to the reliable supply of electricity for consumers and to the stability of the national power grid.
We generate electricity primarily at the nuclear power plant (NEK) and hydroelectric power plants (SEL and HESS), the cornerstones of the present and future secure supply of low-carbon electricity. We help keep the national power grid secure and stable not only by providing reliable electricity generation but also through a gas-fired thermal power plant (TEB), which has an impressive start-up track record and delivers essential ancillary services of tertiary frequency control.