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Electricity demand makes slow recovery

November 9, 2010 - Electricity demand across Central and Eastern Europe is slowly picking up this year after the economic crisis of 2009 but still remains largely below pre-recession levels, according to data compiled by Platts Energy in East Europe.

Monthly consumption figures for eighteen of the markets covered by the newsletter for the period from October 2009 to the end of last month show higher year-on-year most notably since this spring but across the region still below 2008 levels. (See related chart: Monthly consumption trends country-by-country: October 2008 - September 2010 (PDF)).

The electricity demand data closely reflects the economic reality where domestic demand and industrial output is only slowly recovering.

Only in Poland and Turkey has domestic consumer demand recovered to pre-crisis levels, while it continues to fall in Croatia and Hungary and remains 20–30% below pre-crisis levels in the Baltics and Bulgaria.

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Analysts, however, expect demand to continue its upward curve going forward as industrial production in the region picks up again on the back of increased exports to the recovering EU markets.

Consumption in all four key Central European states has still not recovered to levels pre-dating the start of the recession in autumn 2008.

Poland has fared best with monthly demand this year down on average only 1.5% compared to 2008 levels.

Hungary and the Czech Republic have this year yet to record monthly demand higher than the equivalent levels in 2008.

Hungary is the worst affected of the four with monthly demand this year on average 4.6% lower than in 2008, while in Slovakia monthly demand is down on average 3.2%.

The figures suggest, however, that demand in all four states is returning to 2008 levels as the year progresses.

Elsewhere demand is rising strongest in Turkey and Ukraine where both have recorded double digit growth in numerous months this year.

Along with Hungary and Ukraine, the Baltic States were among the economies worst hit by the economic crisis but consumption in the region has grown by 6% year-on-year over the first nine months of the year. Estonia has seen 4% growth this year.

In Russia, cumulative power consumption over the first nine months has risen 5.1% year-on-year. Rising demand growth since February this year, has even led the government to increase its forecasts for the full year and next year.

In October, the Ministry of Economic Development forecast that the country's power consumption for 2010 would increase 3.5-3.9% year-on-year and 2.3-2.7% in 2011.

Analysts have forecast growth of 1.8-2% for 2010 and 1.4-2% for 2011.

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