Page 137 - SE Outlook Regions 2023

Slovenia’s Economy Minister Matjaz Han announced on December 14
that the government plans to offer a subsidy scheme for more air
connections in 2023.

3.11.4 Energy & power

Amid the energy crisis, with the stoppage of the Russian gas, Slovenia
is looking to diversify its energy sources and suppliers. In November the
government announced that Slovenia will import natural gas from
Algeria under an agreement signed between Slovenia’s Geoplin and
Algerian company Sonatrach. Imports will start in January 2023.

Algeria will supply around one-third of Slovenia’s annual needs, or
300mn cubic metres of gas, contributing to Slovenia’s energy security
after Russia’s invasion of Ukraine and Western sanctions on Russia.

The International Monetary Fund (IMF) said that energy security should
remain a policy priority. Despite Slovenia’s dependance on natural gas
imports from Russia, supply disruption risks are clearly mitigated by the
strongly diversified domestic energy mix – gas plays a minor role in
electricity generation – and the availability of alternative gas supplies,
including liquefied natural gas (LNG). The authorities should,
nevertheless, make contingency plans and secure sufficient alternative
supplies to avoid disruptions in a worst case scenario. Guided by EU
initiatives, it is important that measures be taken to increase energy
savings, the IMF said. Over the longer term, the Fund believes it is
important to continue to diversify energy supplies and further develop
renewables to reduce dependence on fossil fuels, in line with the
REPowerEU initiative.

While temporary reliance on more polluting energy sources to secure
energy supplies may be needed in the short term, it is important to
continue to keep a focus on long-term climate goals, the IMF said.
Reforms and investments should continue to promote renewable
energy sources and enhance the climate resilience of infrastructure and
other assets, diversifying the energy mix and supporting climate
adaptation.

According to the Organisation for Economic Co-operation and
Development (OECD), efforts to diversify gas supply, including the
expansion of LNG capacity held in other countries and in coordination
with the EU, will help improve energy security. Such efforts should be
implemented alongside structural reforms to raise potential growth and
address labour shortages. This includes a growth-friendly tax reform
with lower labour taxes, financed by higher environmental and property
taxation.

The government responded to the energy crisis with a fiscal package of
0.6% of GDP in 2022 and announced further spending of 2% of GDP
for 2023. This includes direct subsidies to households and businesses
and temporary tax cuts. The government also capped the price of
electricity and gas in September for one year for households and small
businesses. Temporary measures are assumed to be phased out in
2023.

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