Czech Republic Power Report Q4 2009

The new Czech Republic Power Report from BMI forecasts that the country will account for 3.20% of Central and Eastern European (CEE) regional power generation by 2013, and will remain a net exporter of electricity to neighbouring states. CEE power generation in 2008 was 2,610 terawatt hours (TWh), representing an increase of 1.35% over the previous year. We are forecasting a rise in regional generation to 2,884TWh by 2013, representing an increase of 10.51%. Thermal power generation in 2008 was around 1,342TWh, accounting for 51.42% of the total electricity supplied in the region. Our forecast for 2013 is 1,384TWh, implying 3.11% growth that reduces only slightly the market share of thermal generation to 47.99% – in spite of environmental concerns promoting renewables, hydro-electricity and nuclear generation.

The Czech Republic’s thermal generation in 2008 was an estimated 56.5TWh, or 4.21% of the regional total. By 2013, the country is expected to account for 4.20% of thermal generation. Coal is the dominant fuel in the Czech Republic, accounting for 44.0% of PED in 2008, followed by oil at 22.9%, gas at 18.0% and nuclear energy with a 13.9% share of PED. Regional energy demand is forecast to reach 1,518mn toe by 2013, representing 11.84% growth. The Czech Republic’s 2008 market share of 3.19% is set to fall to 3.14% by 2013. The country’s 26.5TWh of nuclear demand in 2008 is forecast to reach 30.0TWh by 2013, with its share of the CEE nuclear market falling from 7.50% to 6.63%. In BMI’s updated Business Environment matrix, the Czech Republic still ranks sixth out of the nine CEE states as a result of its limited market size, modest growth prospects, relatively high level of energy import dependence, moderate progress towards the use of renewables, and underwhelming privatisation trend.

Country risk factors offset some of the industry weakness, but the country seems destined to remain in the lower half of the table for the foreseeable future. BMI forecasts that real Czech GDP growth will average 2.00% a year during 2009-2013, with a decline of 3.10% forecast for 2009. The population is expected to remain at around 10.4mn, but GDP per capita and electricity consumption per capita are forecast to increase by 7.8% and 3.1%, respectively, between 2008 and 2013. The country’s power consumption is expected to rise from an estimated 64.0TWh in 2008 to 66.5TWh by the end of the forecast period, while theoretical surplus capacity is expected to rise from an estimated 21.5TWh in 2008 to 25.8TWh in 2013, assuming 0.8% annual growth in power generation.

Between 2008 and 2018, we forecast an increase in Czech electricity generation of 20.33%, which is the third slowest projected growth rate for the CEE region. This equates to 11.46% in the 2013-2018 period, up from 7.95% in 2008-2013. PED growth is set to rise from 10.02% in 2008-2013 to 11.45% in 2013- 2018, representing an increase of 22.62% for the entire forecast period. An increase of 254.2% in hydropower use during 2008-2018 is a key element of generation growth, with nuclear usage up by 24.5%. Thermal power generation is forecast to rise by just 7.92% between 2008 and 2018. More detailed longterm forecasts can be found towards the end of this report.