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Call for Applications for Energy Subsidies Published

Call for Applications for Energy Subsidies Published

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We guide you through the current overview of energy subsidy applications.

- Subsidies to businesses for the first quarter of 2023
- Energy price limits for small electricity and gas consumers
- Energy price limits for households
- A new support scheme approved by the European Commission with year-round subsidies for companies

An overview of what's coming, what's not and what's not yet known:

What's coming up:

- Subsidies to businesses for the first quarter of 2023;
- Energy price limits for small electricity and gas consumers;
- Energy price limits for households;
- A new support scheme approved by the European Commission with year-round subsidies for companies

What's not coming:

- Subsidies for the fourth quarter of 2022;
What is not yet known:
- Provision of subsidies to economic operators after the first quarter of 2023 until the end of the year

Detailed information on subsidies:

What's coming up:

1. Subsidies for the first quarter of 2023

The Ministry of Economy of the Slovak Republic has published a call for applications for a subsidy of 80% of eligible costs, i.e. the difference between the actual price of gas and/or electricity paid and the set maximum limits of EUR 99/MWh (gas) and EUR 199/MWh (electricity). This is the net price of the commodity excluding distribution and network charges. The call is available on the web page of the Ministry of Economy of the Slovak Republic (section „energo dotacie“) and the application deadline is 30 June 2023.

The application must be submitted from the applicant's electronic mailbox to the Ministry of Economy of the Slovak Republic, one month retrospectively.

- The maximum amount of the subsidy is EUR 600 000 in total per economic operator for the first quarter of 2023, i.e. a maximum of EUR 200 000 per month.
- If the amount requested exceeds EUR 100 000, the applicant must be entered in the register of public sector partners and the application must identify the beneficial owners.
- Eligible applicants are economic operators, i.e. providers of goods and/or services, irrespective of their legal form, method of financing and size, with the exception of credit and financial institutions. Enterprises in difficulty are also eligible.
- An eligible applicant is not a business that does not have an established off-take point during the eligible period and does not have a unique billing EIC and/or POD code that appears directly on the invoice.
- An eligible applicant is only an end-user of energy and is not an entity that has consumed energy for the purposes of electricity and heat production during the eligible period.
- The subsidy is backdated, i.e. in February 2023 businesses can apply for the January 2023 subsidy, in March they can apply for the February and/or January 2023 subsidy, and so on.
- The eligible period is preliminary the first quarter of 2023, i.e. the period from 1.1.2023 to 31.3.2023.
- The Ministry of Economy has earmarked a total of EUR 279 820 623 for these purposes.

2. Support for small consumers of regulated electricity and gas

Small enterprises with an annual consumption of up to 30,000 kW of electricity or 100,000 kW of gas have a guaranteed price for part of the regulated energy supply, with fixed ceilings of EUR 99/MWh (gas) and EUR 199/MWh (electricity) for the whole year 2023, according to Government Regulation No 19/2023 Coll. As this is a commodity price, this price will be increased by the fees according to the decision of the Regulatory Office for Network Industries (ÚRSO).
For businesses that have already received bills for 2023 with higher energy prices than those now guaranteed, the Economy Minister recommends that they ignore these bills and do not pay them. Energy suppliers should issue new invoices.
Entities supplying energy to small consumers will be compensated.

3. Guaranteed energy prices for households

On 16 November 2022, the Government of the Slovak Republic, by resolution, approved the so-called general economic interest, which set the maximum price of electricity for households. The Government has thus set the price of electricity for households at EUR 61.2 per MWh, which is, however, increased by the coefficient determined by the Decree of the Regulatory Office for Network Industries (ÚRSO). The resulting amount of electricity for households thus amounts to EUR 67.3/MWh. The level of the electricity price for households thus remains at the 2022 level.

At the same time, the price of gas for households was also adjusted.According to the Slovak Government Regulation No.19/2023 Coll., the price of gas is made up of a monthly payment per customer place of EUR 1.50 and the maximum gas tariff, which is determined separately for each type of tariff (D1 - D6, or D7 - D8). As a result, gas prices for households are thus increased by 15% at the 2022 price level.

4. New subsidy system

Slovakia has sent a new aid scheme to the European Commission for notification, following point 2.4 of the Temporary Crisis Framework. The scheme is intended to provide aid in a number of ways and on the basis of various conditions, which will be specified in more detail in the published call for proposals. Factors that will be considered include, in some cases, for example, the decline in EBITDA compared to 2021 or energy consumption in recent years.
The European Commission has already approved the specific draft scheme drawn up by the Ministry of Economy and notified the Ministry at the end of January 2023. Thus, the publication of the call for proposals by the Ministry of Economy is currently pending. This type of aid is provisionally to apply until the end of 2023 and is intended to help in particular energy-intensive businesses.

What is not coming:

1. Subsidies for the fourth quarter 2022

According to the information from the Ministry of Economy of the Slovak Republic, it is no longer planned to provide subsidies for energy consumed in the fourth quarter of 2022. Thus, compensation was provided only for August and September 2022, when energy prices were the highest. The period from October to December 2022 will thus not be covered by this type of state aid.

What is not yet known:

It is currently unclear whether subsidies of 80% of amounts above €199/MWh (electricity) or €99/MWh (gas) will continue to be provided beyond the first quarter of 2023 for the remaining months of 2023.

By Bernhard Hager, Managing Partner, Annamaria Tothova, Partner and Jan Scerba, Associate, Eversheds Sutherland

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