BMI's Executive Summary

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The new Poland Power Report from BMI forecasts that the country will account for 9.02% of CEE regional power generation by 2011, and to remain a net exporter of electricity to neighbouring states. BMI's CEE power generation estimate for 2006 is 1,995 terawatt hours (twh), representing an increase of 3.39% over the previous year. We are forecasting an increase in regional generation to 2,398twh by 2011, representing a rise of 19.4%.

CEE thermal power generation in 2006 is estimated by BMI at 1,230twh, accounting for 61.6% of the total electricity supplied in the region. Our forecast for 2011 is 1,440twh, implying 17.1% growth that reduces the market share of thermal generation to 60% – in spite of environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Poland's thermal generation in 2006 is estimated at 157.4twh, or 12.80% of the regional total. By 2011, the country is expected to account for 13.54% of thermal generation.

For Poland, coal is the dominant fuel, accounting for 61.8% of primary energy demand (PED), followed by oil at 23.9%, and gas at 13.3%. Regional energy demand is forecast to reach 1,676mn toe by 2011, representing 18.1% growth over the period. Poland's estimated 2006 market share of 6.75% is set to rise to 7.12% by 2011. Poland has no operational nuclear generating capacity and isn't expected to build new plant during the forecast period. It makes no contribution to regional nuclear energy consumption.

Poland's overall business environment can be considered highly attractive in a regional context, with low long-term economic and political risk, and a relatively advanced state of deregulation. It has slightly better than average forecast growth in power consumption and generating capacity, as well as a relatively neutral position in terms of energy import dependence. In the BMI Business Environment Ranking matrix, Poland receives a composite score of 36, which ranks the country first out of nine states included in the CEE region.

BMI is forecasting Polish real GDP growth averaging 4.5% per annum between 2006 and 2011, although this year's forecast is 5.2%. Population is expected to contract from 38.1mn to 38.0mn over the period, but 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 132.8twh last year to 163.2twh by the end of the forecast period, providing exports rising from 32.8twh in 2006 to 53.3twh in 2011, assuming 5.5% annual growth in generating capacity.