BMI forecasts that Russia will account for 38.28% of Central and Eastern Europe (CEE) regional powergeneration by 2013, and will remain a net exporter of electricity to neighbouring states. CEE powergeneration in 2008 was 2,610 terawatt hours (TWh), representing an increase of 1.35% over the previousyear. We are forecasting a rise in regional generation to 2,884TWh by 2013, representing an increase of10.51%.
Thermal power generation in 2008 was around 1,342TWh, accounting for 51.42% of the total electricitysupplied in the region. Our forecast for 2013 is 1,384TWh, implying 3.11% growth that reduces onlyslightly the market share of thermal generation to 47.99% - in spite of environmental concerns promotingrenewables, hydro-electricity and nuclear generation. Russia’s thermal generation in 2008 was 690TWh,or 51.36% of the regional total. By 2013, the country is expected to account for 46.58% of thermalgeneration.
Gas is the dominant fuel in Russia, accounting for 55.2% of primary energy demand (PED). Gas isfollowed by oil at 19.1%, coal at 14.8%, nuclear at 5.4%, and hydro with a 5.5% share of PED. Regionalenergy demand is forecast to reach 1,518mn tonnes of oil equivalent (toe) by 2013, representing 11.84%growth over the period. Russia’s 2008 market share of 50.43% is set to fall to 49.23% by 2013. In 2008,Russia accounted for 46.12% of regional nuclear energy consumption, with a forecast market share of49.76% by 2013.
Russia now fifth in BMI’s updated Power Business Environment Ratings, just behind Romania. Russia’scurrent score reflects the vast size of the country’s electricity market and infrastructure, a high level ofGDP per capita growth, and a relatively low level of import dependence. Country risk factors underminethe industry scores to some extent. Romania is in easy reach and there is clear scope for Russia to makeprogress over the medium term.
BMI now expects Russian real GDP growth to average 1.30% per annum between 2009 and 2013,although the 2009 forecast is for a decline of 7.80%. Russia’s population is expected to fall from 141.8mnto 138.3mn over the forecast period, but GDP per capita and electricity consumption per capita areprojected to increase by 58% and 7%, respectively. The country’s power consumption is expected toincrease from an estimated 897TWh in 2008 to 934TWh by the end of the forecast period, whiletheoretical export capacity should increase from an estimated 140TWh in 2008 to 170TWh in 2013,assuming 1.4% annual growth in generation.
We are forecasting an increase in Russian electricity generation of 17.63%, between 2008 and 2018,which is towards the lower end of the projected range for the CEE region. This equates to 10.41% in the2013-2018 period, up from 6.55% in 2008-2013. PED growth is set to rise from 9.17% in 2008-2013 to14.24% in 2013-2018, representing 24.72% over the entire forecast period. An increase of 54% in hydropoweruse during 2008-2018 is a key element of generation growth. Thermal power generation is forecastto fall by 1.9% between 2008 and 2018, with nuclear demand up almost 60%. More detail of BMI’s longtermforecasts can be found later in this report.
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