Saturday

26th May 2018

Focus

Scandal around Slovak solar energy industry

  • Robert Fico is said to have made sure his government's solar subsidies went to friendly companies (Photo: European Commission)

When the state-owned grid operator in Slovakia in November 2009 announced it would start accepting solar power plant applications, nobody knew about it.

“The announcement was quietly placed at the bottom corner of [the operator’s] website,” the US embassy in Bratislava said in a dispatch dated one month later, and remained unnoticed until a local newspaper picked up the news.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The operator had “summarily rejected all applications submitted to that point,” according to the dispatch, and said “the application process would be restarted from scratch five days later on a first-come-first-served basis.”

“Even those companies fortunate enough to see the news that night had little more than a weekend to complete a lengthy application and secure the necessary documentation,” it adds.

In the end, the operator is reported to have accepted applications for only “part of the day.” According to Martin Simonek, an analyst at Bloomberg New Energy Finance and a Slovak national, it closed the window after half an hour.

Good business

The government at the time - as it is today - was run by Prime Minister Robert Fico from the centre-left Smer party.

Earlier that year, he and his fellow EU leaders had agreed to binding renewable energy targets. Shortly after, his government passed a law granting generous subsidies to those producing renewable energy.

“And then they said: okay, let’s make some good business,” Martin Kretter, member of the executive committee of the Slovak Association of the Photovoltaic Industry, told EUobserver.

He accused the government of rigging the application process.

“Normal people did not know about it. Only [Fico’s] friends from politics,” he adds.

There was a lot of money to be made. The subsidy, after German example, was set up in the form of a so-called feed-in-tariff: the guaranteed purchase of generated electricity for a period of time at a premium price. That price, as was the case in Slovakia in 2010, is often several times as high as the price for electricity from non-renewable sources. The time period was 15 years.

At the same time, the price for solar panels was tumbling. China had begun to invest massively and would soon all but take over the EU market. In the time span of a couple of years, the price has fallen by some three quarters.

Logically, most money was to be made in big installations. The state-owned operator, when issuing the call, put a cap of a total of 120MW on installations bigger than 1MW.

"Those 120MW were distributed among Fico's friends," Kretter says.

Solar tennis?

The US embassy refers to “a reliable source” who “alleged that the industry has been rigged by the highest levels of government to benefit Jozef Brhel, one of a group of wealthy Slovak businessmen widely thought to bankroll - and benefit from - PM Robert Fico’s Smer party.” Brhel is also a former member of parliament.

The source is reported as having said that Fico himself was pulling strings in order to create “a regulatory regime ensuring enormous profits” and to make sure those profits would go to “Brhel-backed projects.”

The US embassy says that many of the companies whose projects were approved by the operator were unknown to industry experts and “seem to be little more than shell companies.”

As an example, it names the CTC Tennis Club, which “while it has licenses allowing it to sell vegetarian food and provide car rentals, the business is not licensed to build or operate a solar power plant - or, for that matter, a tennis club.”

Fico denies

Fico's office told EUobserver that the allegations are based on "false, fabricated constructions based on subjective, untrustworthy opinions," and "absolutely in conflict with the facts."

It added that the attribution of the 120MW of big installations was done "transparently."

"[The operator] published the criteria on its official Web page and also in the state-wide daily newspapers. All those who wanted to obtain a position of approval had already had a number of months to pass through the successful process of assessment in the regional distribution system, and thus were sufficiently qualified to submit a very simple application," it said.

Solar energy in figures: Germany is king

Europe is the undisputed sun king of the world, with close to 75 percent of globally installed solar panels. But there are big differences between countries, and Germany leads the pack.

The growing pains of the solar industry

The solar industry is in disarray. But, experts say, this is nothing out of the ordinary. It is just going through a painful but necessary process.

Solar energy

Europe’s solar energy industry has been shaken by strong competition from China. EUobserver examines whether it has got what it takes to survive.

Visual Data

EU budget: Biggest cuts and increases

The European Parliament accused the EU Commission of not providing clear figures for a comparison of the proposed and the current EU budgets. We take a look at the main differences.

News in Brief

  1. Italy set to pick eurosceptic finance minister
  2. UK foreign minister fooled by Russian pranksters
  3. Rajoy ally gets 33 years in jail for corruption
  4. Close race as polls open in Irish abortion referendum
  5. Gazprom accepts EU conditions on gas supplies
  6. Facebook tells MEPs: non-users are not profiled
  7. Commission proposes ending France deficit procedure
  8. UK households hit with Brexit income loss

Stakeholders' Highlights

  1. Counter BalanceEuropean Ombudsman requests more lending transparency from European Investment Bank
  2. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  3. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  4. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  5. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  6. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  7. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  8. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  9. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  10. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  11. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  12. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  11. UNICEFCalls for the Protection of Children in the Gaza Strip
  12. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations