Renewable Energy Act in Slovakia

The Act on Promotion of Renewable Sources of Energy and High-Efficiency Cogeneration has came into force on 1 November 2009 in Slovakia. Slovakia has an especially high energy-dependence even by Central European standards in the electricity, heat and fossil fuel sectors, too. Most of Slovakia's renewable energy comes from a single source, the Gabčíkovo water dam, whose environmental effects and economy had been the subject of a two-decades-long bitter dispute between Hungary and Slovakia.

The new act gives a number of incentives to build biomass, solar, wind or geothermic capacities with prices fixed to 15 years, a priority in the Slovak electricity distribution, and accessibility to direct state-aid. AmCham Slovakia's Connection magazine has a nice round-up (pdf) by Zuzana Sátková at PricewaterhouseCoopers and a legalistic review of the new act (pdf) by Vojtech Pálinkáš and Peter Šťastný of Allen and Overy.

A similar act was long awaited in Hungary, too, but now it is certain that the bill will have to be submitted by the new government as the current parliament will not make new laws before the after the April general elections. This gives Slovakian investment targets at least a year of competitive advantage over Hungarian ones.