Poland Power Report Q1 2008

The new Poland Power Report from BMI forecasts that the country will account for 8.59% of CEE regional power generation by 2011, and remain a net exporter of electricity to neighbouring states. BMI's CEE power generation estimate for 2006 is 2,006 terawatt hours (twh), representing an increase of 4.00% over the previous year. We are forecasting an increase in regional generation to 2,451twh by 2011, representing a rise of 22.14%.

CEE thermal power generation in 2006 is estimated by BMI at 1,247twh, accounting for 62.23% of the total electricity supplied in the region. Our forecast for 2011 is 1,527twh, implying 22.54% growth that raises the market share of thermal generation to 62.32% - in spite of environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Poland's thermal generation in 2006 is estimated at 158.6twh, or 12.72% of the regional total. By 2011, the country is expected to account for 12.99% of thermal generation.

For Poland, coal is the dominant fuel, accounting for 61.8% of primary energy demand (PED), followed by oil at 24.4%, and gas at 13.0%. Regional energy demand is forecast to reach 1,724mn toe by 2011, representing 19.8% growth over the period. Poland's estimated 2006 market share of 6.75% is set to rise to 7.12% by 2011. Poland has no operational nuclear generating capacity and isn't expected to build new plant during the forecast period. It makes no contribution to regional nuclear energy consumption.

Poland's overall business environment can be considered highly attractive in a regional context, with low long-term economic and political risk, and a relatively advanced state of deregulation. It has slightly better than average forecast growth in power consumption and generating capacity, as well as a relatively neutral position in terms of energy import dependence. In the BMI Business Environment Ranking matrix, Poland receives a slightly lower composite score of 35, which ranks the country equal first out of nine states included in the CEE region, alongside Kazakhstan.

BMI is forecasting Polish real GDP growth averaging 5.1% per annum between 2006 and 2011, although in 2007's forecast is 6.6%. Population is expected to contract from 38.1mn to 37.9mn over the period, but GDP per capita and electricity consumption per capita are forecast to increase significantly. The country's power consumption is expected to increase from an estimated 133.5twh in 2006 to 169.1twh by the end of the forecast period, providing exports rising from 28.4twh in 2006 to 41.4twh in 2011, assuming 5.0% annual growth in generating capacity.