Romania Power Report Q2 2008

The new Romania Power Report from BMI forecasts that the country will account for 3.39% of Central Eastern Europe (CEE) regional power generation by 2012, and to remain a net exporter of electricity to neighbouring states. BMI's CEE power generation estimate for 2007 is 2,083 terawatt hours (twh), representing an increase of 3.84% over the previous year. We are forecasting a rise in regional generation to 2,538twh by 2012, representing an increase of 26.49%.

CEE thermal power generation in 2007 is estimated by BMI at 1,293twh, accounting for 62.1% of the total electricity supplied in the region. Our forecast for 2012 is 1,577twh, implying 22.6% growth that leaves unchanged the market share of thermal generation to 62.1% - in spite of environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Romania's thermal generation in 2007 is estimated at 36.1twh, or 2.79% of the regional total. By 2012, the country is expected to account for 3.06% of regional thermal generation.

For Romania, gas is the dominant fuel, accounting for 39.4% of primary energy demand (PED), followed by oil at 27.0%, coal at 19.7%, with hydro having a 10.7% share of PED. CEE regional energy demand is forecast to reach 1,723mn tonnes of oil equivalent (toe) by 2012, representing 24.5% growth over the period. Romania's estimated 2007 market share of 2.82% is set to rise to 3.13% by 2012. Romania in 2007 accounted for an estimated 1.79% of regional nuclear energy consumption, with a forecast market share of 2.57% by 2012.

Romania comes top in BMI's newly revised Power Business Environment rating, with a narrow lead over close rival Poland. The score reflects a relatively low level of import dependence, a high proportion of renewable energy, growing primary energy demand and an established competitive landscape. Over the medium-term, Poland has the potential to challenge Romania for the top rung of the ladder.

BMI forecasts Romanian real GDP growth averaging 5.56% per annum between 2006 and 2012, although the 2008 forecast is 6.2%. The population is expected to expand from 21.5mn to 22.3mn over the period, and 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 52.3twh in 2007 to 65.1twh by the end of the forecast period, while exports should rise from an estimated 11.7twh in 2007 to a forecast 20.9twh in 2012, assuming 5.4% annual growth in generating capacity.