Southeast Europe will face severe electricity shortages in coming years that could cause economic growth in the region to slow significantly, leading energy experts warned yesterday.
They blamed government subsidies - which have kept electricity prices artificially low - for the soaring growth in consumption, while little has been done to step up production or offer alternative sources of energy.
«We are facing growing electricity shortages in the Balkans, but there is no incentive for investment in new generating capacities,» said Vuk Hamovic, a leading energy trader.
Studies by KPMG, a leading financial management consultancy, and the European Stability Initiative, an independent research institute based in Berlin, found that significant investments would be needed in energy generation and infrastructure in Southeast Europe in the coming years to overcome decades of neglect.
«If this shortfall is not urgently addressed, it could result in very expensive electrical energy for consumers and a fall in GDP of 1-2 percent in the region,» Hamovic said in an interview.
Currently, half a dozen power plants are being built or expanded in Bulgaria, Bosnia, Romania and Slovenia. But even if they all come on line as planned by 2015, their combined output will be less than half the anticipated growth in consumption.
Hamovic pointed to the $1.2 billion Stanari thermal power plant in Bosnia, the first new generating facility in the western Balkans in three decades. It will have an installed capacity of 420 megawatts. «Just to put things in perspective, in China a new power plant of comparable size is brought on line every single week,» Hamovic said.
Analysts say the annual growth of energy consumption in Southeast Europe - comprising a dozen countries with a combined population of 73 million people - averages nearly 4 percent, pushed up by strong economic growth and improving living standards.
But the region has combined installed electrical power of about 76 gigawatts, barely enough to fulfill current requirements.
«The stability of electrical supply in the region is becoming dangerously overstressed,» said Sijka Pistolova, the editor of the Balkan Energy Observer, a trade publication.
She said that the immediate reason for this was the closure last year of two units of Bulgaria's nuclear plant at Kozloduy - as part of that nation's requirements to join the European Union.
Until then, Bulgaria could always make up for shortages elsewhere. Although Romania's Cernavoda nuclear plant is being expanded, it will not be able to compensate for that loss, she said.
The region has large unexploited hydropower potential and the largest lignite coal reserves in Europe. But Pistolova noted that a general lack of investment and the damage caused by the Yugoslav wars in the 1990s - which destroyed large parts of the transmission grids - had disrupted investment in power generation. Within two to three years, this could result in daily, hours-long power cuts in some countries, she warned. Countries such as Albania, the Former Yugoslav Republic of Macedonia and Greece already barely meet their needs. «Existing capacities in Southeast Europe cannot provide the energy stability required for faster economic growth,» said Professor Milovan Studovic, an energy strategy expert. A possible remedy for future shortfalls could be to increase imports from countries that have large surpluses, such as Russia. But analysts noted that this too would require investments in transmission grids from the east. The EU has been reluctant to help develop such infrastructure, fearing it would lead to increased energy dependence on Russia.
(KATHIMERINI, 06/24/2008)