Slovakia Power Report Q1 2008

The new Slovakia Power Report from BMI forecasts that the country will account for 1.55% of Central Eastern Europe (CEE) regional power generation by 2011, and remain a net exporter of electricity to neighbouring states such as Hungary. 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. Slovakia's thermal generation in 2006 is estimated at 8.3twh, or 0.67% of the regional total. By 2011, the country is expected to account for 0.80% of thermal generation.

For Slovakia, gas is the dominant fuel, accounting for 27.8% of PED, followed by nuclear at 22.8%, oil at 22.1%, with coal having a 21.5% share of PED. Regional energy demand is forecast to reach 1,724mn toe by 2011, representing 19.8% growth over the period. Slovakia's 2006 market share of 1.24% is set to remain around this level to 2011. Slovakia in 2006 accounted for 5.23% of regional nuclear energy consumption, with a forecast market share of 4.13% by 2011.

Slovakia's overall business environment can be considered fairly unattractive in a regional context, with relatively high long-term economic risk offsetting its low long-term political risk, and an advanced state of deregulation. It is also let down by only modest forecast growth in power consumption and generating capacity, as well as a high level of energy import dependence. In the BMI Business Environment Ranking matrix, Slovakia receives a higher composite score of 28, which now ranks the country sixth out of nine states included in the CEE region.

BMI forecasts Slovak real GDP growth averaging 6.83% per annum between 2006 and 2011, down from 2007's forecast of 8.5%. Total population is expected to remain constant around 5.4mn 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 27.0twh in 2006 to 32.7twh by the end of the forecast period, while exports should rise from an estimated 4.4twh in 2006 to a forecast 5.3twh in 2011, assuming 3.2% annual growth in generating capacity.