Gregor Novak, SunContract: Slovenian energy industry could be bolder

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Gregor Novak, SunContract: Slovenian energy industry could be bolder

Date: April 28^th 2021

Author: Alenka L. Klopčič, Tanja Srnovršnik

Category: En.vision

Topic: Electricity , Renewables , En.vision

For SunContract, the year of Covid-19 has mainly been a year of opportunities: the Slovenian blockchain-based energy trading platform hired fifteen new employees, stepped up its projects, and worked to additionally improve its organisational climate, said the company CEO, Gregor Novak, in a video interview for Energetika.NET (in Slovenian only). According to Novak, SunContract has invested no less than 10% of its revenue in development each year since the establishment of the platform in 2019. This will allow the company to enhance its portfolio with products including energy storage systems, and continue its energy self-sufficiency mission by expanding its activity from consumers to rural and urban communities.

The goal: one million solar users

“We have done a lot on back-office systems. It goes without saying that energy is a highly regulated business with a large amount of legislation, and this is reflected in project development,” said the CEO of SunContract when asked about the work done so far. The company had not rushed to build up its customer base until back office was ready, added Novak. One million customers is the company’s goal, while the timeframe, he admitted, is difficult to define.

According to Novak, the platform has met with a highly positive response and aims to make its customers energy self-sufficient in renewables. This is also something the company wants to see Slovenia achieve at national level, and something Novak considers to be a realistic objective.

“SunContract is transforming its customers to become self-sufficient. In Slovenia, this is regulated by a decree on self-supply,” said Novak. Another company in the group, SONCE energija – whose newly appointed CEO is Roman Gregorn – will have installed one thousand solar power plants by the end of the year, while SunContract has recently expanded its activity to self-sufficient rural and urban communities. Having started with the town of Kobarid (MORE, available in Slovenian only), the service is shortly expected to launch a renewable energy self-sufficient community (the company’s portfolio includes solar as well as CHP) in Radeče. As producers involved in the platform currently outmatch demand, the surplus is traded on a power exchange, said Novak.

“Our customers do not ‘lose’ the surplus electricity they produce; they may even pass it on to their extended family,” said Novak, adding that SunContract will expand its range of products and services with additions such as energy storage systems and other renewables. “But solar is a winning source,” Novak is confident, looking forward.

Since 2019, SunContract has had an office in Estonia. After its activity in Italy was curtailed by the pandemic, the company decided to focus even more strongly on the Slovenian market instead. Slovenia, according to Novak, is a well-developed market, whereas potential has also been recognised in Croatia and, needless to say, Austria and Germany, where this activity is mode adequately regulated.

Self-sufficiency is the future of energy in Slovenia

Energy transition has been one of the main subjects of debate in the energy industry lately, and to move forward with the transition, EU member states have prepared their national energy and climate plans (NECPs). When asked about the Slovenian plan and how ambitious it is, Novak said the document was “ambitious to some extent” – a bigger issue, however, is that it is only partly being implemented. “It provides no incentives for batteries, nor does it encourage large players to be integrated into the (energy) system. Borzen (Slovenia’s power market operator, translator’s note) fails to allocate all the money earmarked for renewable capacity growth,” said Novak, adding that the energy industry should be a little bolder, especially looking ahead to 2050.

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Novak considers self-sufficiency to be the future of energy in Slovenia, and “the sooner we take this path, the greater the benefits, or vice-versa: the longer we wait, the greater the damage this will do to the economy”. The reasoning behind his assessment is as follows: if Slovenia had invested EUR 1.4bn in solar PV instead of building unit 6 of the Šoštanj thermal power plant, it could have added some 2,000 MW of solar capacity, estimates at the time showed. This would yield an annual output of 2.2 TWh, and a revenue of between EUR 100 and 130m, depending on the price of electricity. “This means a payback period of no more than 15 years, and the country would now be at one third of it,” said Novak, referring to the loss-making thermal unit.

Another large investment Slovenia is considering now, a second unit of the Krško nuclear power plant (valued at EUR 5 to 10bn), could in Novak’s view be replaced with investment in solar-plus-storage solutions. This would allow Slovenia to build a nationwide network of battery storage systems, while the new solar PV capacity would generate an additional 11 TWh of electricity, creating a revenue of up to EUR 1bn per year.

If Slovenia were to replace the electricity production of unit 6 of the Šoštanj plant, it would have to invest about EUR 1.5bn in setting up 2.885 MW of solar PV capacity, as well as between EUR 3.6 and 5bn in storage to ensure that this energy is evenly distributed, said the power utility HSE, which operates the Šoštanj plant, based on its calculations (MORE).

Renewables are a great opportunity for everyone, said Novak, who is confident that, with a small change in thinking, Slovenia could realistically achieve energy self-sufficiency. In the video interview, Novak also discussed demand response and the challenges power distribution companies face in terms of more efficient use of infrastructure. Watch the interview here.