2 September 2002 – Following some successes by European Union countries, Eastern European countries have continued to try to open their rapidly growing electric markets and privatize them, however a recent report says that, even though Eastern Europeans want the immediate gratification of money and efficiency, they also want to avoid the risk of foreign take-over and the loss of jobs, a conflict that leads to choppy regulatory progress at best.

The conclusion comes from an analysis by Enerdata S.A., a major electricity-business consulting firm based in Grenoble, France.

“It has been stop and go” in Eastern Europe, said Enerdata President Bertrand Chateau. He wrote a chapter about European electric considerations for Natural Gas and Electric Power Industries Analysis (2002) (Houston: Financial Communications Company, 2002), covering in depth European electric supply, demand, outlook, mergers, and governmental affairs.

Chateau said, “The main problem for these countries is to avoid the foreign companies taking over all the business.” As a result, he said, the governments” decide to go ahead with privatization, then there is a parliamentary reaction” stopping the process, reflecting at least in part the fear of loss of jobs. This schizophrenia “is the major problem today.”

At stake are one major market, Poland; one relatively smaller market, Hungary; and other minor markets. In the near future, Polish users will consume in the order of 200 TWh a year; Hungarian users, about 45 TWh a year. At those rates, Polish consumption would then be only a little less than Spain’s (222 TWh a year in 2000, according to Chateau’s chapter in Natural Gas and Electric Power Industries Analysis), while Hungarian consumption would be about the same as Portugal’s (43 TWh a year in 2000, according to the chapter).

Thus, in electric-market terms, the Eastern European electric market is somewhere near the Iberian Peninsula’s. At current growth rates, Eastern Europe may soon assume a more-dominant role. The major players, Poland and Hungary, have been growing at the rate of 40 per cent a year in electricity use.