Review of Electricity Supply and Demand in Southeast Europe

This paper reviews the power sector demand-supply balance in Southeastern Europe (SEE), covering Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Former Yugoslav Republic of Macedonia, Romania, and Serbia and Montenegro (including Kosovo). The paper first looks at the actual balance over the period 1991-2001. After that, the forecast balance to 2012 is reviewed. The analysis is based on aggregated country level demand and capacity data provided by the electric utilities and supplemented drawing on published sources. The context for the paper is the agreement between the countries above, together with Greece and Turkey, to form a South Eastern Europe Regional Electricity Market (SEEREM).1 The objective is to identify the magnitude of generation investments to be made in the evolving market. The paper also proposes mechanisms to reduce investment requirements, namely energy efficiency improvements and increased trade, and provides a brief assessment of technical and institutional barriers to trade. The preliminary conclusion of the paper is that additional generating capacity of around 4,500 MW will be required over the next ten years, together with substantial rehabilitation of existing plant. The associated financing requirement would be well in excess of $5 billion. However, these figures reflect a significant degree of national energy self sufficiency. It is likely that less investment would be required if countries were to coordinate investments, with economies resulting due to heterogeneous resources, non coincidental peak requirements, and sharing of reserves. A regional least cost expansion plan is currently being developed as a follow up to the present study; this new study is to be financed by the EC and co-managed by the World Bank. The institutional framework to support increased trade is being developed as part of the SEEREM.