SHORTAGES, RESTRICTIONS AND PRICE INCREASES COMING
In the energy situation in South East Europe, the most important question is the influence of the closure of NPP Kozloduy in Bulgaria, which is forecasted for the beginning of 2007. With the closure of this nuclear power plant, a considerable part of production capacities will “disappear”, which will have a negative effect on both Bulgaria and neighbouring countries, in the form of great pressure and a possible leap in electricity prices in South East Europe. The opening of new capacities, to compensate for the electrical power from Kozloduy, is not expected until the end of 2009, and so in the region of South East Europe, an enormous pressure on prices is expected, heightened by the increased demand for electrical power due to accelerated economic development.
The founding of the Energy Community of South East Europe has made a united electricity market which covers a territory a bit bigger than France, and which has a population of 55 million people, the same size as the Italian market.
From an energy point of view, the region of South East Europe has its greatest importance as a transit area for energy substances from the Caspian region, Russia, and the Near East, whilst its own energy sources are minimal.
The insufficiently developed infrastructure, and the forecast of growth in the consumption of all types of energy, particularly electrical power, has made the region of South East Europe increasingly interesting to investors, because of the above average rate of growth. The estimated value of the electricity market in Europe in 1995 was 244.4 billion euros, with a forecast annual growth in consumption of 1.4% until 2010. (Source: Datamonitor).
At the same time, according to the results of a World Bank study, it is expected that in South East Europe, the average annual growth rate of consumption will be 2.3% until 2020. Current operational capacities for electricity consumption in South East Europe are 43.9 GW, which is a bit more than 5% of total European capacities. This capacity is dominated by thermal plants that use lignite.
ABS Energy Research, in this year’s issue of Power Predictor 5, published its forecast of the development of new capacities in South East Europe, according to which their level will reach 75 GW by 2020. This indicates a very dynamic growth in electricity production capacity, with an average annual growth of 3.6%, by which the total capacities of South East Europe will reach 7% of total European capacity.
The biggest investment activity is expected in the period from 2011-2015, when a fourth of all new capacities in Europe will be built in the region of South East Europe.
However, the construction of new capacities will not be equally distributed throughout the entire region, because in some countries, the rehabilitation of existing ones will be the priority.
Albania is expected to remain a net importer of electrical power in the following period; in Bosnia and Herzegovina the construction of 400 MW of hydro potential is expected, however, the priority will still be rehabilitation of the existing system; in Bulgaria 2,400 MW new capacities with the rehabilitation of the existing ones is expected; Croatia is planning to build 2000 MW of new capacities, although the time frame for implementation has not yet been made; in Romania, by 2010 the rehabilitation of 8,000 MW of thermal capacities is expected; and in Serbia, the most important expansion of capacity is not expected before 2010.
The most important question in the region is the influence of the closure of NPP Kozloduy in Bulgaria, which is forecasted for the beginning of 2007.
With the closure of this nuclear power plant, a considerable part of production capacities will “disappear”, which will have a negative effect on both Bulgaria and neighbouring countries, in the form of great pressure and a possible leap in electricity prices in South East Europe. Bulgaria has traditionally exported electrical power to Greece, Serbia, Macedonia and Romania, satisfying an important part of the consumption in these markets (Bulgaria is currently the biggest electrical power exporter in the Balkans and the fourth biggest in Europe). Preliminary analyses show that in 2007, Bulgaria will be able to export just 2 TWh of electrical power- a quantity smaller than that which Bulgaria currently exports to Greece alone.
Since the new capacities to compensate for the electrical power from Kozloduy NPP aren’t expected to start working before the end of 2009 (Marica East- 670 MW), then 2011 (Belane NPP Unit 1- 1000 MW), and 2013 (Belane NPP Unit 2- 1000 MW), the region of South East Europe it expecting huge price pressure, which will be heightened by the increased demand for electrical power due to accelerated economic growth.
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