Continuing uncertainty about the future carbon environment as well as ongoing concerns over security of supply seem to be outweighing fears about tightening supply-demand margins, according to Platts Energy in East Europe's (EiEE) latest power plant tracker.
In 2007, a total of just under 2,400 MW of new capacity was commissioned in the 21 markets covered by Energy in East Europe, and with the exception of Bulgaria, Hungary, Poland, Russia and Turkey, very little new capacity is currently under construction (see table on new capacity under construction).
Developing a balanced generation mix appears to be the main strategy of policymakers and incumbent power producers.
For many developers, this would seem to suggest that either current market conditions are too uncertain to make decisions on investments, that the actual threat of dramatic supply shortages in many of these markets has been overplayed, or most likely a combination of both.
Developing a balanced generation mix appears to be the main strategy of policymakers and incumbent power producers in Central and Eastern Europe (CEE) in light of current market conditions.
Major power producers and developers in the region's EU member states are hedging their bets while they await further clarification from the European Commission on its climate change policies including most notably on renewable energy targets and proposed auctioning of CO2 emissions for all plant post-2013.
This is being reflected in growing interest in new gas-fired and wind power capacity (see table on capacity in operation and under development ). While it may be too early to be talking of 'a dash for gas', a number of gas projects are advancing across the region, suggesting changes in utility' thinking.
The prime example is the Czech Republic's dominant power producer, CEZ, which has launched a new investment strategy aimed at rebalancing its regional generation portfolio.
The company aims to develop some 3,200 MW of gas-fired capacity across the region to replace and supplement existing coal capacity.
This includes its first combined cycle gas turbine plant in the Czech Republic - an 800-MW plant at its Pocerady lignite-fired plant in northern Bohemia; a 400-MW combined cycle gas turbine (CCGT) at its Varna coal-fired plant in Bulgaria, two 800-MW CCGTs to be built with Hungary's oil and gas company MOL at its refineries in Hungary and Slovakia, and possible further gas-fired plants in Croatia, Slovenia, Slovakia and Poland.
In a similar vein, the state power producers of Latvia, Lithuania, Macedonia and Serbia have all recently announced plans to build new gas-fired capacity.
Latvenergo, which will commission a new 420-MW CCGT in Riga in September 2008, announced plans this month to build a second 400-MW CCGT at the same site. In Lithuania, Lietuvos Elektrine plans a 350-450 MW CCGT plant.
Macedonia's ELEM launched a tender in March 2008 for a +300-MW CCGT plant in Skopje and Serbia's EPS, which is predominantly a coal-fired power producer, is preparing to launch a tender for a strategic partner to jointly develop a 400-MW CCGT plant in Novi Sad, which would be the country's first gas-fired plant.
In Hungary, two major gas-fired projects have started construction. E.ON is developing a 430-MW CCGT at Gonyu, while Karpat Energo, a joint venture between state wholesaler MVM, System Consulting and Meinl International Power, started construction in April 2008 of a 233-MW project in Vasarosnameny.
In Romania, oil and gas producer Petrom, controlled by Austria's OMV, has selected an EPC contractor for an 860-MW CCGT plant to be developed at its refinery in Ploesti, as has Enerjisa, a joint venture between Austria's Verbund and Turkey's Sabanci, for a 920-MW plant at Bandirma in northwestern Turkey. Last but not least, E.ON and Turcas have received regulatory approval for an 840-MW CCGT to be built at Denizli in southwest Turkey.
Next page: Further developments in power generation projects
Created: April 30, 2008
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This exclusive power tracker news and analysis first featured in Platts
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