Slovakia coal phase-out

Upper Nitra in Slovakia will be transformed into an attractive and self- sustainable region where economy will be developed in symbiosis with clean environment
Upper Nitra in Slovakia will be transformed into an attractive and self- sustainable region where economy will be developed in symbiosis with clean environment

Slovakia can be a role model for a just transition away from coal power. In July 2019, newly elected President Čaputová announced that the country will stop burning coal to produce electricity by the end of 2023. Subsequently, Slovakia joined the Powering Past Coal Alliance in September 2019.

Slovakia relies less on coal than its neighbours in Central and Eastern Europe. Nevertheless, coal power features prominently in its energy mix, accounting for 11% of electricity production in 2018. The country has two coal power plants: Vojany, located in the in the south-east of the country, uses imported hard coal coming from Ukraine; Nováky, located in central Slovakia, burns domestic lignite mostly produced in three mines in the Upper Nitra region.

Up until 2017, the issue of phasing out coal in the region was considered taboo due to a deep-rooted tradition of coal mining and associated impacts on jobs and livelihoods, similarly to other countries in central and eastern Europe. But since then, coal power generation has come under increasing economic, regulatory and social pressure.

Lignite is deep mined in Upper Nitra, which makes the production costly. Thus, over the recent years the price of electricity produced from domestic coal has been more than double the market price. Slovak electricity consumers need to pay approximately €100 million per year in electricity bills to subsidise it.

The rising carbon price in the EU’s Emissions Trading System and investments required to meet stricter European environmental and air quality regulation further undermine economic viability of coal power generation. According to a report by the European Commission’s Joint Research Centre from 2018, closing the Novaky coal power plant will save the Slovak economy €388 million in total system energy costs.

The end of coal in Slovakia was also spelled by public concerns about air pollution and climate change, and civil society pressure. Due to decades of coal mining and burning, more than a half of the population of the region live in areas with an impaired environment, with negative impacts on health.

The Novaky plant ranks as the 18th most polluting facility in Europe. Closing the plant will massively improve air quality and thus health standards and bring €160-170 million a year in savings from avoided environmental and health costs. It will also reduce CO2 emissions by nearly 6% in 2030, helping Slovakia meet its commitments under the Paris Agreement.

A successful transition away from coal mining and burning requires reinventing the local economy, safely decommissioning the mining operations, improving the quality of life and creating alternatives for workers whose jobs will be lost.

The Slovak lignite sector in Upper Nitra provides over 3,000 jobs directly. While the share of national workforce these jobs represent is small, a ‘just transition’ takes on extra significance in the regions where they are concentrated. The present conditions are favourable: the unemployment rate in the area is low and the region has other large employers, including automotive, chemical, rubber, footwear or machinery industries. Moreover, in 2023 when the mines will be closed, nearly half of their employees will be above 55 years old, potentially qualifying for early retirement.

While the phase-out of coal is not expected to significantly increase the unemployment in the region, there were many other challenges to a smooth transition of the region from a coal-reliant economy. The region is faced with ageing population and negative migration; industry value added, SMEs activity and EU funds absorption are below Slovak average; and there is a significant gap in investments into transport infrastructure.

In July 2019, Slovakia’s national government approved an action plan which will prepare the workers and local communities for a post-coal future. The document, officially called the ‘Transformation Action Plan of coal region Upper Nitra’, was developed by a consulting company for the office of the Slovak deputy prime minister. It is largely based on inputs from local communities in Upper Nitra, who have been organising in working groups to prepare scenarios for the transformation of the region since 2018. It has also received support from the EU’s Platform for Coal Regions in Transition, as Upper Nitra is one of its pilot regions.

The plan aims to transform Upper Nitra into ‘an attractive and self- sustainable region where economy will be developed in symbiosis with clean environment and well interconnected with other economic centres’. It outlines priorities and actions under four main pillars:

1. Mobility and interconnection (including sustainable forms of mobility, such as public transport or electro-mobility),

2. Economy, entrepreneurship and innovation (including sustainable energy, SMEs, sustainable agriculture, circular economy and tourism),

3. Sustainable environment (including sustainable energy, elimination of environmental burdens and sustainable waste and water management),

4. Quality of life and social infrastructure (including healthcare, social services, sport, culture, recreation, housing, education and support for vulnerable groups).

The focus now needs to be on the systematic implementation of the plan in the region with continued engagement of local communities. According to the recommendations of the working groups, projects should be developed through broad participation of local stakeholders, which will ensure that they are tailor-made to regional needs. Priority should be given to projects developed by municipalities or small and medium-sized enterprises.

Local communities emphasised that projects should contribute to building a net-zero carbon economy, by promoting energy efficiency, energy storage, e-mobility and renewables. They should also have positive social impacts and constitute long-term employment. While there are many project ideas on the ground, there is a need to link their initiators to sources of financing, including from the EU funds for 2021-2027 or the Just Transition Mechanism.

Slovakia is an example of good practice for other countries, showing how other coal regions could move away from coal while respecting people’s voices. Through its membership in the Powering Past Coal Alliance, Slovakia can share this positive experience at the international level and thus support other countries in overcoming key social barriers to the transition away from coal. The country also has great untapped potential for expanding its wind and solar energy capacities, which could help further accelerate its sustainable transformation.