REBIS: GIS Volume 4: Demand Appendices Final report 31 ...

The European Union’s CARDS programme for the Balkan region – Contract No. 52276

REBIS: GIS Volume 4: Demand Appendices Final report 31 December 2004

This project is funded by the European Union

CARDS 52276 - GIS

Final Report

Complete GIS Report Table of contents Volume 1 – Executive Summary 1 EXECUTIVE SUMMARY 7 Volume 2 – Main Report - Electricity Demand Forecast 29 2 ELECTRICITY DEMAND FORECAST 29 2.1 Objectives 31 2.2 What Are We Forecasting? 2.3 Background 33 2.4 Approach 40 44 2.5 Assumptions And Data Sources 2.6 Forecasting Model 48 51 2.7 Results And Validation Volume 3 - Main Report - Generation & Transmission Study 75 3 GENERATION AND TRANSMISSION STUDY 75 3.1 Introduction 76 3.2 Computer Models 3.3 WASP And GTMax Runs 84 87 3.4 Candidate Plant 94 3.5 Fuel Costs 3.6 Fuel Costs – Utility Data 108 111 3.7 Fuel Costs – Reconciliation, Forecast Study Prices 116 3.8 Base Case Assumptions 3.9 Scenario A, B and C Results 121 163 3.10 Conclusions 172 3.11 Recommendations 4 REFERENCES 174 Volume 4 – Electricity Demand Forecast Appendices Appendix 1: Review of econometric studies into the relationship between GDP per capita and electricity demand Appendix 2: Details of the econometric analysis of the relationship between GDP per capita and net electricity consumption Appendix 3: Basis for long term GDP per capita growth forecasts Appendix 4: Load shape adjustments Appendix 5: Findings from ECA methodology review Appendix 6: Country electricity demand forecasts Volume 5 – Generation & Transmission Study Appendices Appendix 7: Country data profiles Appendix 8: Specific candidate plant and rehabilitation Appendix 9: Screening curve analysis and cost of rehabilitation Appendix 10: Hydro sensitivity analysis Appendix 11: GTMax Analyses and Results Appendix 12: Scenario A, B & C results Volume 6 – PSSE Appendix Appendix 13: PSSE Appendix

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Volume 4 – Electricity Demand Forecast Appendices Appendix 1: Review of econometric studies into the relationship between GDP per capita and electricity demand Appendix 2: Details of the econometric analysis of the relationship between GDP per capita and net electricity consumption Appendix 3: Basis for long term GDP per capita growth forecasts Appendix 4: Load shape adjustments Appendix 5: Findings from ECA methodology review Appendix 6: Country electricity demand forecasts

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Appendix 1: Review of econometric studies into the relationship between GDP per capita and electricity demand

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Table A1.1: Previous economic studies that have examined the relationship between electricity demand, income and prices Summary Year Paper Author(s) Source 1999

Electricity Demand by the Commercial Sector in Kuwait: An Econometric Analysis, Eltony,-M-Nagy; Hajeeh,Mohammad, OPEC Review

This paper models and estimates electricity demand by the Kuwaiti commercial sector, using an error correction model. It also simulates the estimated model under three scenarios and presents an analysis of the results. The empirical results indicate that short- and long-run electricity consumption and the level of economic activity are interrelated. The forecasts show that electricity consumption varies directly with economic growth.

2000

An econometric analysis of electricity demand in Turkey, Bakirtas,-Tahsin; Karbuz,-Sohbet; Bildirici,Melike, Middle East Technical University Studies in Development

The aim of the paper is twofold: first, to investigate the long-run economic relationship between electricity demand and income in Turkey for the period 1962-96 using the concept of cointegration and error correction modelling. Second, to model the electricity consumption using univariate ARMA process and to make forecast for the years 1997-2010. The results indicate that electricity consumption and income are cointegrated, i.e., they tend to move together in the long run. Using error correction specification, the short- and long-run elasticities of income are estimated. The results show that income elasticity of electricity consumption is very high and electricity consumption in the future will continue to grow at higher rates.

2001

Electricity consumption and economic growth in China, Kui-yin Cheung, Elspeth Thomson, Pacific and Asian Journal of Energy

This study examines the causal relationship between the consumption elasticity and economic growth in China during the period 1952-2000. Through the use of cointegration techniques it is found that the long-run income elasticity was 1.1. The error correction model showed that there exists bidirectional causality between the gross domestic product and electricity consumption. In other words, there is a Granger-type causal relationship between the electricity consumption and economic growth.

2001

The Relationship Between Energy Consumption and Economic Growth in Pakistan, Anjum Aqeel and Mohammad Sabihuddin Butt, Asia Pacific Development Journal

This paper investigates the causal relationship between energy consumption and economic growth and employment in Pakistan. By applying techniques of co-integration and Hsiao’s version of Granger causality, the results infer that economic growth causes total energy consumption.

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Earlier studies also suggested a strong relationship between electricity demand and GDP. These studies cover different groups of countries – thus giving different estimates of the elasticity of electricity consumption with respect to GDP. Table A1.2: Earlier studies in which the income elasticity of demand for electricity was estimated Year

Paper, Author(s), Source

Summary

1981

The energy - GDP relationship in developing countries, Ben-Zion Zilberfarb, Energy Economics Demand elasticities in the OECD: dynamical aspects, Richard D. Prosser, Energy Economics

This study uses cross section and pooled cross section time series data to find that the elasticity of energy consumption with respect to GDP in developing countries is in the neighbourhood of 1.35, and significantly above one. Over the period covered, 1970 to 1976, the relationships appear to have remained stable. There are significant differences between areas of the world, but the differences in the elasticities between different continents are not large Four models with different lag structures are used to express final energy demand in OECD from 1960–1982 as a function of real GDP and average energy price. The income and long-run price elasticities are not significantly dependent on the model specification, but the Koyck lag scheme, estimated in its distributed lag form, is found to give the most satisfactory results. The statistical properties of the data together with evidence of trends in the elasticities both suggest that the period of falling real prices prior to 1971 is not comparable to the present period. For the period after 1971, an income elasticity of 1.02 is obtained.

Energy-GDP relationship and capital intensity in LDCs, Dinesh Desai, Energy Economics

This study provides an updated estimate of the GDP elasticity of energy consumption for LDCs. It uses a production function approach in determining this elasticity. Energy consumption is explained in terms of economic activity, capital intensity and structure of economy. The elasticity is found to be less than unitary.

1985

1986

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Co-integration relationship between electricity demand and GDP The co-integration approach is commonly employed for estimating the long run relationship between electricity consumption and GDP. The articles listed below provide support for our chosen methodological approach in the absence of sufficient reliable price data. Table A1.3: Demand forecasting studies using co-integration analysis Title

Author

Demand Forecasting for Electricity

Meetamehra

Year Published Unknown

Electricity Demand Analysis Using Co-integration and Error-Correction Models with Time Varying Parameters: The Mexican Case

Yoosoon Chang, Eduardo MartinezChombo

2001

Electricity Demand in the People’s Republic of China: Investment Requirement and Environmental Impact

Bo Q. Lin

2003

Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, The Philippines

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K. Fatai, Les Oxley, F.G. Scrimgeour

2004

Relevance

•

Co-integration is useful for estimating long-run relationships.

•

Difficult to estimate the price elasticity due to administered tariffs and supply bottleneck (in India).

•

Specification test for model suggest time varying coefficient cointegrating model

•

Electricity price coefficient not significant in the regression. This suggests that electricity prices do not significantly affect in the long run the residential and commercial demand for electricity in Mexico.

•

Co-integrating approach to electricity demand forecast.

•

Problems in getting price data due to administrated prices and differences in tariffs within and between provinces.

•

Used the fossil fuel price indexes published by the National Statistics Bureau of China as a proxy of electricity prices.

•

Causality test using different approaches and tried bivariate vs multivariate (including price data) for several countries.

•

Concluded that approaches (which exclude price data) could explain electricity demand even when using

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Author

Year Published

Relevance

different methodologies.

and Thailand

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•

Multivariate approach (including prices and/or ECM term variable) gave similar results as bivariate approaches.

•

Consequently, the relationship between GDP and electricity consumption could be estimated in the absence of price data.

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Appendix 2: Details of the econometric analysis of the relationship between GDP per capita and net electricity consumption

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We have undertaken a review of the economic analysis of the relationship between national income and demand. Most studies tend to suggest that for each 1% increase in GDP per capita, electricity demand increases by between 0.9% and 1.2% depending on the country and time period under consideration. Our own analysis of transition economies suggests that a 1% increase in GDP per capita results in a 1.2% increase in net electricity consumption in the long term. We extend the simple national/income electricity demand relationship by also examining the impact of: •

The relative electricity intensity (measured as GWh per US$ of GDP in 1995 terms) of the jurisdictions under consideration when compared with other economies that have been through transition; and also

•

The lagged effect of electricity demand in the previous year.

This is done by applying a standard co-integration model, which models the return to ‘equilibrium’ of electricity intensity of the jurisdictions under consideration. The ‘equilibrium’ level is proxied by the experience of transition economies in Eastern Europe, and therefore suggests the reform of electricity pricing towards economic, cost-based levels, as occurred in these countries. By doing this, the model also implicitly includes the impact of changing economic structure towards that of the transition economies we modelled. Using a simple long term model, the long-term relationship between the GDP per capita and electricity consumption would be estimated as the following: LELCO(i) = Constant(i) + α LGDPPC(i) for each country i. Where:

LELCO(i) Constant(i) LGDPPC(i)

Log of electricity consumption per capita for country i Constant term adjusting for departure from trend for country i Log of GDP per capita in the year 20001 for country i

We estimated this model for data on comparative countries in conjunction with the Balkans countries. Our data sample included Central Eastern European (CEE) countries such as the Czech Republic, Hungary and Poland, as these countries are similar in historical background. However, the Eastern European countries have made progress in their transition to market economies, and may therefore provide an indication of the transformation the Balkan countries could achieve. Some other European Union countries, for example, Ireland, Portugal and Spain were also considered. Other comparators included were the South East Asian economies and selected South American countries, which have achieved substantial growth in recent decades.

1

Stated in 1995 prices.

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The long term electricity demand relationship we estimate for each jurisdiction is: LELCO(i) = Constant(i) + 0.889 LELCO (-1) + 0.133 LGDPPC(i) Where:

LELCO(i) Constant(i) LGDPPC(i)

Log of electricity consumption per capita for country i Constant term adjusting for departure from trend for country i Log of GDP per capita in the year 20002 for country i

The coefficient of the lag term (0.889) in the model reflects the degree of persistence in electricity demand – the degree of dependence of current electricity demand on the previous period’s demand. This coefficient regulates the rate at which the model will predict that electricity demand returns to its assumed long run trend level relative to GDP. The treatments of the lag term for Bulgaria and Serbia (excluding UNMIK) differ from the rest of the countries. These two countries have significantly higher electricity intensity than the other countries. As such, the degree of electricity intensity levels returning to ‘equilibrium’ is affected by the ability to reform, which in turn would be affected by the extent of over-usage. Estimating the rate of reform for different jurisdictions is extremely problematic, particularly when the distance from ‘equilibrium’ is so great. We therefore model the inability to correct the over-usage by giving these two countries different lag terms, which are more appropriate for countries with relatively very high levels of electricity consumption. The constant varies by jurisdiction. The variation represents the amount of adjustment required by each jurisdiction to reach long term trend levels of electricity intensity. Standard specification tests have been carried out to ensure that the model does not suffer from biases. Each regression is checked for

2

•

Co-integration –The residuals of the regressions were tested for non-stationarity (known as unit root test). Stationary residuals would suggest that the variables in the regression are co-integrated, i.e. there exists a long term relationship between the variables. Regressions that fail the co-integration tests would not be included in the sample.

•

Omitted variables – Our approach is “general to specific”, where lag terms of variables were included in the initial regression. The lag terms were then tested to see if they were significant, and those that fail to be significant were removed, to obtain the final regression equation for each country.

•

Coefficient of lag term – The lag term is tested as to whether it differed significantly from 1. It was found that the lag term was significantly different than 1 for each regression, and therefore calculation of the long-term GDP coefficient is possible.

•

All of the estimated models for the comparator countries passed these tests to the standard 95% confidence level. Stated in 1995 prices.

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Appendix 3: Basis for long term GDP per capita growth forecasts

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We have included the jurisdictions included in the Study into three categories: •

Category 1: The higher income SEE jurisdictions i.e. Croatia;

•

Category 2: Middle income jurisdictions that has embarked on the economic reform process (FYR of Macedonia, Romania, Bulgaria, Bosnia and Herzegovina);

•

Category 3: The lower income countries in the region (Albania, Serbia and Montenegro, UNMIK)

For each of the three categories we review in turn: •

Recent developments in each of the economies included in the Category;

•

Economic outlook for the economies;

•

External economic growth forecasts for the economies;

•

Performance of other economies in the Category income range; and

•

Medium term scenarios for the economies.

Category 1 Category 1 includes only one of the southeastern Europe economies under consideration: Croatia. Croatia Recent developments Background: The period from 1992 to 2000 for Croatia was marked by war and economic hardship created by the costs of accommodating refugees. The Government that took office in early 2000 embarked on a reform process that has achieved closer international integration and further liberalisation of trade and prices, and has introduced laws to liberalise the infrastructure sector. Other economic objectives include macroeconomic stabilisation, imposing budget constraints on loss-making public enterprises, restructuring the business sector, accelerating privatisation and facilitating foreign investment. Growth: Real GDP growth per capita averaged 4.0% between 1996 and 2001. More recently, household consumption growth has decelerated steadily, a result of the HDZ’s (the central bank of Croatia) liquidity-tightening measures. In contrast, fixed investment has been growing rapidly, driven by continued heavy spending on the national motorway construction programme. Prices have remained generally stable and inflation in 2003 was just 1.7%. Wage growth and strong domestic demand, along with expected price liberalisation for electricity, gas and water in 2004 should lead to a rise in inflation.

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External conditions: Croatia has become a member of WTO, has signed a Stabilisation and Association Agreement (SAA) with the European Union and has joined NATO's Partnership for Peace Programme. The current account deficit (denominated in USD) has been widening, partly due to the currency strengthening. The trade deficit is expected to continue widening but at a much slower rate, held back by the effects of monetary policy measures to restrain import growth. Foreign Direct Investment: Since 2000, the government has focused on attracting foreign investments, through the introduction of investment incentives, reduction of payroll and corporate taxes and accelerating privatisations. As a result, the investment climate has been gradually improving, with higher inflows of FDI. The bulk of FDI so far is connected to privatisation deals, although other inflows have been increasing. Economic reform: The government has been successful in privatising some key sectors of the economy, such as the financial services industry and telecommunications. The government has also taken important steps to tackle alleged administrative shortcomings in the public sector. Economic Outlook & External forecasts for Croatia Croatia is expected to maintain a healthy economic growth rate over the next two years, of around 4-5% per annum. The desire to join the EU suggests that structural changes will occur, but the pace will be determined also by the political conditions of the jurisdiction which have been fragile. Inflation has been maintained at low levels, but the liberalisation of prices in utilities may exert some upward pressure on inflation. Table A3.1: EIU Feb 2004 Real GDP (% change) Retail prices (% change; av) Current-account balance (% of GDP)

2003 4.6 1.5 -6.0

2004 4.2 2.2 -4.2

2003 4.7 1.7 -5.9 68.4

2004 4.5 3.5 -5.2 67.8

2005 4.6 2.6 -3.4

Table A3.2: IMF Nov 2003 Real GDP (% change) RPI inflation (% change; av) Current-account balance (% of GDP) External debt (% of GDP)

Performance of other Category 1 economies A number of the CEE and EU economies fall within the Category 1 income range, as detailed in Table A3.3 below. With the exception of the Czech Republic, these economies have achieved relatively robust GDP growth of around 4-5% per annum since their economies ended their post-communism decline in 1993. The average growth rate across

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all of these economies is 4.0%, which indicates the potential growth rate of post-communist transition economies aiming for EU accession. Table A3.3: Eastern European transition economies GDP pc (1993)

GDP pc (2001)

Czech Republic $4,610 Hungary $4,150 $3,150 Estonia Slovak Republic $3,210 Poland $2,560 Average annual GDP per capita growth rate

$5,580 $5,540 $4,710 $4,410 $3,720

Average annual growth rate 2.4% 3.7% 5.1% 4.0% 4.8% 4.0%

Some other economies within Category 1 have achieved more rapid economic growth. As detailed in Table A3.4, both Chile and Malaysia achieved average GDP per capita growth of around 4-5% per annum during the 1986 to 2001 period (which was generally a period of robust economic growth performance by emerging markets). It should be noted that both of these economies have suffered economic recessions within this period, but nevertheless on average maintain a healthy level of growth. Table A3.4: Selected Category 1 “tiger” economies GDP pc (1986)

GDP pc (2001)

Chile $2,680 Malaysia $2,540 Average annual GDP per capita growth rate

$5,390 $4,710

Average annual growth rate 4.8% 4.2% 4.5%

Table A3.5 details the GDP per capita performance of Category 1 economies in Latin America and Turkey over the period 1990 to 2000. These economies did not achieve average growth rates as high as those in CEE or the “tiger” economies, as their economies were mired by sharp financial crises and currency instability. On average, they achieved GDP per capita growth of 2.3% over this period. Table A3.5 Latin America and Turkey GDP pc (1990)

GDP pc (2000)

Argentina $5,780 Brazil $4,080 Mexico $3,190 Costa Rica $2,950 Panama $2,520 Turkey $2,580 Average annual GDP per capita growth rate

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$7,910 $4,630 $3,810 $3,930 $3,280 $3,150

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Average annual growth rate 3.2% 1.3% 1.8% 2.9% 2.7% 2.0% 2.3%

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Medium-term scenarios for Category 1 countries We have developed three scenarios for the Croatian economy, based on the information presented above. The main scenario seeks to present the most-likely central forecast for the economy, while the high and low scenarios seek to highlight the uncertainties surrounding the economic outlook. Main Scenario In the main scenario, Croatia would experience growth of 4%3 per annum, similar to the Eastern European average. The commitment of the government to economic reform and the desire to join the EU suggest that structural changes would continue to occur. Privatisation of public utilities and large enterprises as well as price liberalisation for utilities prices are expected to be carried out. High Scenario In a high growth scenario, Croatia would be able to outpace the Eastern European economies and grow at about 5% per annum. The government would manage to carry out further fiscal consolidation, and acceleration of structural reforms. Sectors such as agriculture would also receive attention in restructuring. The comparable economic status with EU countries like Hungary and Estonia would make successful accession into the EU extremely plausible. Low Scenario The downside-risk comes from regional underperformance caused by instability in other South Eastern European countries. Incomplete reform or political uncertainty within the jurisdiction may also hamper growth expectations. In this scenario, we would expect Croatia to attain growth of only 3% per annum. This scenario would be more in line with the growth performance of economies in Latin America and Turkey over the past decade. Category 2 – FYR of Macedonia, Romania, Bulgaria, Bosnia and Herzegovina Introduction The Category 2 countries in general have been growing modestly at around 3-5% per annum. Substantial progress in economic reform has been made, in the form of privatizations of small and medium sized enterprises, and some improvement in macroeconomic stabilisation. Privatizations of larger state-owned enterprises have been much slower, albeit in progress, and improvement in the general business environment (creating greater transparency and regulations) is still needed. Below, we review recent developments and the short term economic outlook for the four countries separately, and then review medium term prospects for these Category 2 economies based on a review of the performance of other Category 2 economies

3

We have used 4.2% pa in the demand forecast as it is recommend by the government of Croatia

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Macedonia Recent developments Background: In 2001, inter-ethnic violence prompted the signing of the Stabilisation and Association Agreement (SAA) with the EU on 9th April 2001 to establish a Europe Committee to enhance political and inter-ethnic dialogue. The situation deteriorated nevertheless, resulting in Macedonian Albanians fleeing the country to southern Kosovo and Serbia whilst ethnic Macedonians moving to other parts of the country. NATO finally negotiated a cease-fire in June and successfully reduced the violence in the country whilst the political situation improved. Growth: In 2000, notable progress was made in transition and in laying the foundations for sustainable economic growth, and significant reforms were introduced, including the acceleration of large-scale privatisation and better banking supervisory standards. These achievements have been, however, seriously jeopardised by the 2001 conflict. Economic activity declined sharply and key reforms were put on hold. The economic costs of the conflict have included trade disruption, the collapse of business confidence, both foreign and domestic, and the heavy fiscal burden of security expenditures. External conditions: The continued engagement of international organisations in Macedonia will help to reduce the risk of a relapse into inter-ethnic conflict, at least in the short term. EU’s military peacekeeping mission that took over from NATO is likely to be extended until the end of 2004 at least, focusing on combating organised crime, setting up a border police and co-operating more closely with other police forces. EU is also the country’s main trade partner and account for about half of its foreign trade. Foreign Direct Investment: As of end 2001, cumulative foreign direct investments since 1991 amounted to little more than USD 800 million, while domestic investment is constrained by the low savings rate and lack of access to capital and by administrative and legal barriers to investment. FYR of Macedonia has benefited over the last decade from access to loans on favourable terms from the international community, and the external debt burden, at around 40% of GDP, is relatively moderate. However, the scope for incurring new sovereign loans is limited. Economic reform: The EBRD identified several significant transition challenges for FYR of Macedonia, in particular: (i) improving the business environment for investors, (ii) privatising or liquidating large loss-making companies and promoting post-privatisation enterprise restructuring and the development of institutional and financial support for SMEs; (iii) commercialising and privatising utilities, building upon the earlier success of the telecom privatisation, and developing critical regional infrastructure; and (iv) strengthening and consolidating the banking sector and developing non-bank financial institutions. Economic Outlook & External forecasts for FYR of Macedonia The short-term outlook for the economy of FYR of Macedonia suggests GDP growth of around 4% per annum in 2004 and 2005. Continued international engagement and the biethnic composition of the ruling coalition should help to reduce the threat of a return to the

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conflict experienced in 2001, but the risk of inter-ethnic violence remains at least in the short term. FYR of Macedonia is expected to apply formally for EU membership, but there is no indication that the EU will look favourably on such an application at this stage. Although EU accession remains a distant prospect, FYR of Macedonia has realistic hopes of joining NATO in the next few years (FYR of Macedonia signed the US-Adriatic Partnership Charter in May 2003, with a view to increasing co-operation with NATO). The stand-by arrangement with the IMF has brought about some official financing, although the policies that the agreement entails could lead to social unrest. The economic recovery is expected to accelerate in 2004-05, reflecting increased foreign funding and a pick-up in both investment and private consumption. Despite an expected recovery in merchandise exports, the current-account deficit is likely to remain large in 2004-05, at nearly 7% of GDP. Table A3.6: EIU Feb 2004 Real GDP (% change) Retail prices (% change; av) Current-account balance (% of GDP)

2003 3.0 1.2 -7.5

2004 3.8 2.4 -6.7

2005 4.5 2.5 -6.7

Romania Recent developments Background: The reform in post-communist Romania has focused on gradualism. Successive macroeconomic stabilisation programmes have been undermined by a persistent failure to undertake difficult structural reforms. The main policy tasks facing the government are further fiscal consolidation, and the restructuring and privatisation of large state enterprises and utilities. Growth: GDP growth has been driven by high rates of investment in fixed capital formation, while the growth in public consumption moderated due to a tightening in fiscal policy. Periods of positive growth have however been accompanied or superseded by high inflation and macroeconomic imbalance. The present government, however, has been more committed to macroeconomic stabilisation and structural reform, through an 18-month stand-by arrangement with the IMF in 2001, and a public sector adjustment loan with the World Bank. External Conditions: The country's international standing has strengthened with better macroeconomic conditions and enhanced market sentiment toward Romania. Improved regional political stability has led to the signing of bilateral free trade agreements with most of Romania's neighbours and the planning of a regional energy market. Romania has two main foreign policy priorities: to become a member of NATO in 2004; and to sign an accession treaty with EU by the end of 2005 so as to have a chance to join by the target date of 2007 (along with Bulgaria). However, Romania was not granted recognition by the European Commission as a “functioning market economy” (FME). Nevertheless, the EC has been positive about Romania’s progress, evidenced by the detailed road maps to Romania’s membership and increased pre-accession funding.

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Foreign Direct Investment: Comparatively low wages, rising productivity, attractive market size and location, and the prospect of EU accession are key factors for foreign investors willing to relocate production facilities into Romania. However, the country's poor investment climate and the high level of bureaucracy and other administrative barriers remain major obstacles to further private sector development and higher net foreign direct investment (FDI) inflows. Economic reform: Although most of small and medium-sized public enterprises have been privatised, large-scale privatisation have been slow. A major problem in Romania is weakness in the rule of law. Transparency International considers Romania as one of the most corrupt countries in the world. Property rights are weak. There are serious concerns by the EC on its judicial independence. The EBRD has committed to support the privatisation momentum in the energy sector, the required regulatory reforms as well as focus on the affordability issues raised by privatisation and reforms. Economic Outlook & External forecasts for Romania The economy is expected to grow around 4-5% per annum in 2004 and 2005, driven by new investment activity. Strong import growth is expected, which will make it difficult to reduce the current-account deficit. Increases in real wages and continued rapid credit growth will continue to boost consumption. Fall in inflation levels is forecast to continue. However, the inflation level will remain high, generated by a continuation of the consumer credit boom. This will also lead to real effective appreciation of the currency at least for the short term. Table A3.7: EIU Feb 2004 Real GDP (% change) Consumer price inflation (% change; av) Current-account balance (% of GDP)

2003 4.8 15.4

2004 4.9 12.7

2005 5.1 9.8

2006 5.0 8.2

2007 4.5 6.7

2008 4.3 5.8

-6.3

-5.5

-5.2

-5.2

-5.2

-5.1

Bulgaria Recent developments Background: Following the 1996-97 economic crash, reforms initially focused on stabilising the economy, with the help of a currency board, support from the IMF, tight budgetary policy, strict banking supervision, structural reforms and privatisation. Reducing the high level of unemployment has become a policy priority for the government. Future reforms will focus on the commercialisation or privatisation of utilities and on adapting Bulgaria’s legislation to EU standards. Growth: The loss of protected markets under communism led to a steep decline in output in the 1990s. The recovery since 1997-98 has been slow and partial in industry, and almost non-existent in agriculture. A rise in the importance of services indicates a move towards

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modern, service-oriented economy. In recent years, robust GDP growth has been attributed to strong domestic investment growth, fuelled by a rapid expansion of credit to the private sector and further progress in structural reforms. External Conditions: Improved political stability on a regional level has led to signing of free trade agreements with all neighbouring countries and an increasing role for Bulgaria as a regional energy hub. Bulgaria is broadly on track to join the EU in 2007, and recognised as having a functioning market economy. A lower trade deficit, higher receipts from a booming tourism sector, and lower interest payments on debt, have contributed to a significant reduction in the current account deficit in 2002. Foreign Direct Investment: FDI remains low compared to the more advanced accession countries, partly due to Bulgaria's weak, albeit improving, investment climate. Economic reform: Privatisation and structural reform have been slowing down. There is also the need to proceed further with judicial reform and combating corruption. Other key transition challenges identified for Bulgaria are to: accelerate the deregulation and privatisation of the energy sector; strengthen the administrative and implementation capacity of the public administration; and focus on social issues and sustainable improvement of living standards while maintaining macroeconomic stability. Economic Outlook & External forecasts for Bulgaria The economy is expected to grow by around 4% per annum in 2004 and 2005. Economic policies are expected to focus on EU accession requirements and on completing a number of major privatisations. The current-account deficit rose sharply in 2003 but is forecast to narrow gradually as a share of GDP, though still be around 7% of GDP by 2005. Table A3.8: EIU Feb 2004 Real GDP (% change) Consumer price inflation (% change; av) Current-account balance (% of GDP) Foreign Direct Investment (US$ bil)

2003 4.5 2.3

2004 4.2 4.6

2005 3.8 4.2

2006 4.6 3.8

2007 4.6 3.7

2008 4.4 3.4

-8.3

-7.5

-6.9

-6.6

-6.1

-5.9

0.65

0.70

0.65

0.68

0.68

0.68

Bosnia & Herzegovina Recent developments Background: Macroeconomic stabilisation and structural reforms have been moving forward, supported by low inflation and continued rapid GDP growth. The acceptance of the new currency is achieved through fiscal restraint and strict adherence to the currency board rules, and has led to an increase in official reserves.

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Growth: The economy has grown at double digits after the conflict of 1992-1995, reflecting recovery. It has begun to slow since 2000, and the real GDP has only reached about half the pre-war level. The economy is still very fragile, GDP per capita at around US$ 1,400 is among the lowest in Europe, and unemployment and poverty are widespread. Pent-up demand fuelled high levels of private consumption in the latter half of the 1990s, matched by high public-sector consumption largely financed by international donors. Investment, on the other hand, has been modest in absolute terms and mainly externally funded. By late 2001 and early 2002 there was some indication of a pick-up in domestic savings, although this was not strong enough to back up more robust investment activity. External Conditions: As foreign assistance and post-war reconstruction aid will continue to decline, the country will increasingly be obliged to take control of its own destiny. The international community expects the new governments at State and Entity levels to implement a new reform drive. Foreign Direct Investment: The investment climate is poor and the rule of law is not yet fully entrenched. However, FDI is increasing, at about USD 117 million in 2000, but the level is still fairly low and private capital inflow needs to increase to deal with the pressure of declining international assistance. The problem with BiH is its recent history, the weak economy and the amount of legislation and bureaucracy. Efforts are slow but under way with the help of international financial institutions to improve the investment climate. Economic Reform: Small-scale privatisations have been moving forward, but large stateowned enterprises continue to dominate the economy. However, the pace of progress is increasing. Trade liberalisation is gradually being implemented to promote domestic competition and establish a transparent and non-discriminatory trade regime. Reforms in social benefits and taxation still face difficulties. Key challenges include: the introduction of a single customs administration and VAT to create a single economic space across Bosnia and Herzegovina; improving the business environment via strengthening of the legal framework, accelerating large-scale privatisation and improving corporate governance; and improvements to physical infrastructure through utility restructuring and privatisation. Economic Outlook & External forecasts for Bosnia & Herzegovina Some economic growth is expected to continue, at around 4% per annum in 2004 and 2005, putting the country towards recovery but still significantly poorer than its pre-war standards. The entity and state-level governments concluded several key reforms in 2003, which will strengthen the role of the central government and open the door for Bosnia and Herzegovina to join Euro-Atlantic structures. BiH's foreign policy will revolve around relations with the US, the EU and its regional neighbours. Economic policy trends will be guided by the priorities set out in the recently adopted poverty reduction strategy paper (PRSP), which will probably be accompanied by a three-year poverty reduction and growth facility with the IMF. The PRSP puts the reforms necessary to initiate eventual EU membership, which is at the centre of the overall reform programme. Reforms will include acceleration of the privatisation process, improving the business environment, combating corruption and organised crime, and promoting foreign investment and strengthening BiH’s export sector. Exports look set to grow steadily. Implementation of BiH’s recently signed free-trade agreements with several of its neighbours is also likely to improve regional

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prospects for trade. With exports strengthening, and imports moderating as a result of an anticipated slowdown in consumer demand, the merchandise trade deficit and the currentaccount deficit are likely to narrow. Table A3.9: EIU Feb 2004 Real GDP (% change) Retail prices (% change; av) Current-account balance (% of GDP)

2003 3.5 0.2 -24.7

2004 3.8 0.4 -20.7

2005 4.0 N/a N/a

Performance of other Category 2 economies Several former Soviet Union states have comparable GDP per capita with the countries in Category 2. These economies have generally experienced healthy growth with an average growth rate of 4.4% Table A3.10. Latvia and Lithuania have recently joined the EU, another suggestion of achievable growth rates for pre-EU accession countries. Table A3.10: Category 2 Former Soviet Union states GDP pc (1994)

GDP pc (2001)

Latvia $1,940 Lithuania $1,710 Russia $2,210 (1996) Average annual GDP per capita growth rate

$2,820 $2,310 $2,610

Average annual growth rate 5.5% 4.4% 3.4% 4.4%

Thailand, despite suffering an economic recession in 1996-97, achieved average growth rate of 5.0% over the 1986-2001 period, as shown in Table A3:11. It has successfully progressed from a primarily agrarian country to an industrializing economy, with a long period of steady growth before the recession. This gives an indication of the degree of industrialisation the Category 2 countries can potentially achieve. Table A3.11: Category 2 “tiger” economies GDP pc (1986)

GDP pc (2001)

Thailand $1,380 Average annual GDP per capita growth rate

$2,853

Average annual growth rate 5.0% 5.0%

Table A3:11 shows the performance of other Category 2 countries in the last decade. While some economies achieved mild growth, others had in fact a negative average growth rate in the 10-year period. The average growth rate of the selection of economies is a meagre 1.6%. Table A3.12: Other Category 2 economies

Lebanon

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GDP pc (1990)

GDP pc (2000)

$1,720

$2,890

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Average annual growth rate 5.3%

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GDP pc (1990)

GDP pc (2000)

$1,910 Peru $1,820 Tunisia $2,240 Jamaica $1,380 Dominican Rep. $1,380 El Salvador $1,820 Paraguay $1,290 Iran $1,520 Jordan $1,650 Algeria $1,360 Guatemala $1,480 Ecuador $1,310 Morocco Average annual GDP per capita growth rate

$2,340 $2,470 $2,150 $2,050 $1,760 $1,700 $1,660 $1,620 $1,610 $1,560 $1,430 $1,370

Average annual growth rate 2.1% 3.1% -0.4% 4.1% 2.5% -0.7 2.5% 0.6% -0.3% 1.4% -0.3% 0.4% 1.6%

Medium-term scenarios for Category 2 countries We have developed scenarios for the Category 2 economies (FYR of Macedonia, Romania, Bulgaria and Bosnia & Herzegovina), based on the information presented above and the likelihood of EU accession. The main scenario seeks to present the most-likely central forecast for the economies, while the high and low scenarios seek to highlight the uncertainties surrounding the economic outlook. Importantly, both Romania and Bulgaria are broadly on track to join the EU in 2007 as planned, whereas Macedonia and Bosnia & Herzegovina are unlikely to join for a number of years thereafter. We believe this has substantial implications for the likely rate of structural change and foreign direct investment, and therefore has implications for the likely pace of economic growth. Our growth scenarios are therefore higher for Romania and Bulgaria. Main Scenario In the Main Scenario, the economies of Romania and Bulgaria are expected to experience GDP growth of around 4.5% per annum over the 2006-2020 period. The progress in economic reform and the drive to join the EU will continue to fuel growth, drawing in foreign investments and local development of infrastructure. Privatisation of large state-owned enterprises is expected to be the main focus of reform in the near future. In the Main Scenario, FYR of Macedonia and Bosnia & Herzegovina could be expected to achieve a similar rate of growth if they pushed for early EU accession through rapid structural change. There is a risk that this will not be the case, however, so in this scenario average GDP growth is forecast to be somewhat lower, at around 4.0% per annum over the 2006-2020 period.

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High Scenario Successful large-scale privatisation and the creation of a functioning market economy will give a positive outlook for these countries. Accession into the EU will be looked favourably upon, and the amount of foreign direct investments could pick up. Sustained growth of 5% could be achieved by Romania (although for the demand forecasts the high/case 3 scenario draws a growth assumption from the Ministry of Economy) and Bulgaria as the economies catch up with their Central Eastern European counterparts. The risk of later EU accession for FYR of Macedonia and Bosnia & Herzegovina suggests a slightly lower growth rate, of 4.5%. Low Scenario The downside risk unsuccessful or partial economic reforms, and the inability to attract further investments from abroad will all pose a limit to growth. In the low scenario for all four countries, growth hovers around 3%, privatisation remains limited to small and medium sized enterprises, foreign direct investments do not grow favourably, and local conditions add uncertainty to the general business environment. The risk of the low scenario is perhaps greater for Macedonia and Bosnia & Herzegovina. Category 3 – Albania, Serbia (excluding UNMIK) & Montenegro and UNMIK The countries within this category are amongst the poorest in Europe, and are highly dependent on agriculture. Recent conflicts left the countries trying to recover – giving high growth rates that are attributed to reconstruction, aid or transfers from abroad rather than improved economic environment. Some reforms have been carried out, but the grey economy, corruption levels and lack of regulatory and enforcement bodies continue to discourage large foreign investments. Albania Recent developments Background: Despite several setbacks in the last few years, including the pyramid scheme collapse of 1997 and the influx of refugees from the conflict in neighbouring UNMIK in 1999, Albania’s firm commitment to economic reform has resulted in encouraging macroeconomic results - for example growth rates of 7-8% in the last 5 years (not including the grey economy). The country appears to be politically stable, with improving national security and with external help, infrastructure is being restored and trade is boosted. Agriculture accounted for almost 50% of GDP in 2002. Industry accounted for 24% of GDP in 2002 (at current prices), down from an average of about 40% in the late 1980s. This shift reflects the reduced importance of the mining and manufacturing segments since the communist period, when the authorities pursued a policy of aggressive industrialisation. The service sector is a smaller part of the economy than in most other post-communist countries in Central Eastern Europe. This reflects the fact that Albania is at a less advanced stage of transition than many other countries in the region.

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Growth: Albania’s growth performance has been stable and rapid since 1998, driven mainly by private consumption, which is in part attributed to strong private transfers (especially remittance from Albanians abroad). Growth is further fuelled by construction, services, agriculture and increased productivity. The constraints lie in the decline in public and private investment, the problems of large privatisations and electricity supply, and the difficulty in keeping government expenditure and investment under control as part of its IMF agreement. External Conditions: Trade deficit has been high but falling. However, as structural changes would be needed to improve this significantly, it will only be reduced slowly. Albania is highly dependent on EU that takes up 90% of the country’s exports and provide for 70% of its imports. Foreign Direct Investment: With greater regional stability, Albania’s foreign direct investments have been increasing. It is however still at a low level and dependent on internal factors such as reductions in corruption and infrastructure improvements especially road construction. Economic reform: Privatisation has been moving forward, mainly for state-owned SMEs. The government has turned its attention to larger enterprises and utilities, but these would be harder to conclude and may pose a strain to the general economy’s growth. Key challenges identified are: combating corruption and strengthening law enforcement; accelerating energy sector reform and liberalisation of tariffs; and completing the privatisation for state-owned banks. Economic Outlook & External forecasts for Albania GDP growth of 6-7% per annum is expected over the next two years. The authorities would be mainly focusing on tackling low living standards, widespread poverty and high unemployment. Privatisation of state-owned large enterprises would be promoted. Public investment will concentrate on improving infrastructure, healthcare and education. Closer integration with the West is likely to remain the central tenet of foreign policy in 2004-05. Average annual inflation is expected to be about 3% in 2004-05, with inflationary pressure kept in check by IMF-endorsed fiscal constraints and lower global oil prices. Table A3.13: EIU Feb 2004 Real GDP (% change) Inflation (% change; av) Current-account balance (% of GDP)

2003 6.0 3.0 -7.3

2004 6.0 3.0 -6.3

2005 7.0 3.0 -6.3

Serbia & Montenegro Recent developments Background: Following a decade of conflict after the dissolution of the Socialist Federal Republic of Yugoslavia, in March 2002 an agreement was signed to form a loose union

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between Serbia and Montenegro. In February 2003, a Constitutional Charter was adopted, under which the Federal Republic of Yugoslavia became Serbia4 and Montenegro. They now share a common foreign and defence policy, and operate under a common market. Growth: Real GDP growth in 2003 is about 2%, due to the weak performance in industry and agriculture. Growth in 2004-2005 is forecasted to be 4-5% p.a., driven by inflows of FDI from privatisation, government infrastructure investment, supply-side reforms that encourage enterprise creation and improve the overall business environment, and some pick-up in external demand. The priority for the new Serbian government, as well as the authorities in Montenegro, will be to encourage investment and stimulate stronger economic growth, not least in order to ensure popular support for reform. The parties in the new Serbian government broadly agree on the general direction of reform. Serbia will remain dependent on external funding, and IMF requirements will greatly limit the scope for any deviations from the present macroeconomic policy stance. External conditions: The FRY made great efforts in rebuilding the ties with the international community that were damaged during the conflict. Serbia & Montenegro is working towards reintegration into the Euro-Atlantic structures, and has joined various international organisations including the UN and the IMF. Trade deficit in Serbia and Montenegro's balance of payments reached about US$4.5bn in 2003, reflecting the lack of international competitiveness among Serbian exporters and weak import demand across much of the EU. Economic reform: Serbia has made much improvement in macroeconomic stabilisation since 2000, at the same time carried out liberalisation of market access to the EU. Smallscale privatisation has been progressing ahead of the IMF projected level, but large-scale privatisation remains slow. The parliament in Serbia has approved measures to ensure companies insiders cannot block sales and existing owners/managers cannot artificially raise cost to buyers due to redundancy packages. In Montenegro, some large scale privatisations have been initiated or carried out. However, efforts of the government to open tenders for 11 hotels in February 2003 has attracted little interest from foreign investors. The overhaul and strengthening of banking sectors in both republics have made significant progress, with sales of several major banks and greater supervisory powers given to the Central Banks. Key challenges are: greater legislative reforms on bankruptcy and competition, acceleration of privatisation programmes for large enterprises in an open and transparent manner, and further strengthening of the financial sector. Economic Outlook & External forecasts for Serbia and Montenegro External forecasts suggest that Serbia ad Montenegro should achieve GDP growth of around 4% per annum over the next two years, although considerable uncertainties exist for even the short-term economic outlook. Continued growth in the services sector is hoped to offset weak performance in industry and agriculture in the near future, with further acceleration in growth further on, driven by inflows of foreign direct investment (FDI) from privatisation; government infrastructure investment; further reforms; and some pick-up in 4

A part of Serbia (Kosovo) is now administered under a UN mandate (UNMIK.) All references to Serbia in this section exclude UNMIK.

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external demand. The broad deflationary trend is set to continue in 2004-05, as macroeconomic policy remains within the bounds of the IMF agreement. The IMF has been urging Serbia to satisfy counter-inflationary as well as competitiveness goals in its exchange-rate policy, but the Fund's increasing concern at the external imbalance could lead it to put greater emphasis on the competitiveness factor. Export performance is forecast to improve in 2004-05, as restructuring, privatisation and other supply-side reforms take effect and the external environment gradually improves. Serbia and Montenegro, however, will continue to run large trade deficits, fuelling protectionist sentiment and calls for state-financed “export promotion”. Serbia and Montenegro will continue to rely on external assistance to finance the current-account imbalance, especially if delays in state asset sales and heightened perceptions of political risk cause levels of FDI to be lower than currently forecast. Table A3.14: EIU Mar 2004 Real GDP (% change) Retail prices (% change; av) Current-account balance (% of GDP)

2003 1.5 11.2 -10.4

2004 3.0 7.6 -8.9

2005 5.0 6.2 -7.9

There are significant downside risks to this forecast because of the threat of political instability, lower official inflows, and the possibility that FDI may drop sharply if privatisation stalls. UNMIK Recent developments Background: Post-war UNMIK economy has experienced high GDP growth, but the income level in the country remains one of the lowest in Europe (some 40% of Macedonia’s level). Unemployment rate is one of the highest in the region at an estimated 50%. Political tensions still exist. Growth: The main sources of income for a UNMIK household are remittances from relatives in Western Europe (with one in six Kosovar living outside the country), and contributes to 30% of GDP. The strong growth in 2001 at 11% is fuelled by large official transfers of around 70% of GDP through consumption and investment. The international aid has been essential in meeting the post-war humanitarian and reconstruction needs, thus making UNMIK highly aid-dependent. However, donors’ transfers have been declining as the situation stabilises and international organizations are leaving the country. Agriculture and private services sector have been doing well, but industrial production has largely failed to recover. External Conditions: Estimates for 2001-2002 indicated that the country has a trade balance deficit of half of the GDP, giving pressure on the need to improve export performance in the years to come. This huge external imbalances are being covered by remittances and official transfers – hence a relatively low current account deficit.

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Foreign Direct Investment: FDI only plays a minor role but is expected to rise along with the beginning of privatization. Economic reform: The process of privatization of the socially owned enterprises (SOEs) was delayed for a long time due to property rights issue, only beginning to take off in June 2002 when the UNMIK established the Kosovo Trust Agency in charge of the privatization or liquidation of the 350 SOEs. Public enterprises run by UNMIK have not yet been included on the privatization scheme. The grey economy is still widespread and cigarettes and fuel smuggling rampant and difficult to control. Economic Outlook & External forecasts for UNMIK With decreasing foreign aid, it will be necessary to ensure successful reforms especially in increasing tax revenues and fighting smuggling and corruption. Unemployment is unlikely to fall as major international organizations pull out of the country. Growth is projected to be about 4-5% per annum over the next two years. Price stability is expected to improve. Trade deficit will remain high, funded by remittances from Kosovans abroad. Table A3.15: UNMIK May 2003 Real GDP (% change) Inflation rate (%) Current-account balance before grants (% of GDP) Current-account balance after grants (% of GDP) Workers’ remittances (% of GDP)

2003 4.5 4.0 -37

2004 4.5 3.5 -23

2005 5.5 2.5 -16

0 23

-1 19

-1 17

Performance of other Category 3 economies The selected former Soviet Union states in Table A3:16 have GDP per capita similar to the economies within this category. However, long term data were not available as period before 1996 include bouts of hyper-inflation. For the five-year period of available data, these economies record an average of 5.4% annual growth for GDP per capita. This is a fairly high rate of growth, which may be an indication of catching up to its other European neighbours. However, the range of growth rates varies across the countries, with Ukraine only having a 2.7% average growth but Belarus at 7.0%. Table A3.16: Category 3 Former Soviet Union states GDP pc (1996)

GDP pc (2001)

Belarus $1,070 Kazakhstan $1,260 Ukraine $ 860 Armenia $ 810 Average annual GDP per capita growth rate

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$1,490 $1,710 $ 990 $1,070

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Average annual growth rate 7.0% 6.4% 2.7% 5.7% 5.4%

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The Category 3 “tiger” economies grew by an impressive average rate of 7.2% in the period 1986-1996. After 1996, Indonesia suffered an economic recession which also led to political unrest – a marked contrast from the period of sustained high growth before that. Table A3.17: Category 3 “tiger” economies GDP pc (1986)

GDP pc (1996)

China $ 280 Indonesia $ 630 Average annual GDP per capita growth rate

$ 630 $1113

Average annual growth rate 8.5% 5.9% 7.2%

Other category 3 economies have shown mild average growth in the last 15 years. The average annual GDP per capita growth rate for these countries is 2.0%. Table A3.18: Other Category 3 economies GDP pc (1986)

GDP pc (2001)

Philippines $ 980 Egypt $ 890 Bolivia $ 800 Sri Lanka $ 570 Average annual GDP per capita growth rate

$1,170 $1,230 $ 940 $ 880

Average annual growth rate 1.1% 2.2% 1.1% 3.0% 2.0%

Medium-term scenarios for Category 3 countries We have developed three scenarios for the Category 3 economies (Albania, Serbia & Montenegro and UNMIK5), based on the information presented above. The main scenario seeks to present the most-likely central forecast for the economies, while the high and low scenarios seek to highlight the uncertainties surrounding the economic outlook. Main Scenario In the Main Scenario, the Category 3 economies are expected to continue with recovery – with a period of high growth for the near future, then stabilising at around 4% per annum. For the 2006-2020 period, the scenario therefore envisages average growth of 4.5% per annum. Remittances from abroad or foreign assistance would continue to be important. Some achievement in economic reform would be expected – privatization of state-owned enterprises, the establishment of basic business laws and enforcement bodies, and some crackdown on the grey economy. High Scenario A more optimistic scenario might envisage growth averaging 6.5% per annum over the 2006-2020 period, reflecting political stability and strong economic recovery, which allow 5

While the PwC Consortium has investigated these scenarios, our demand forecasting is based on scenarios suggested by utilities for Albania, Serbia (excluding UNMIK) and UNMIK.

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the Category 3 economies to begin catching-up with the rest of the South Eastern European countries in Categories 1 and 2. Stable political conditions and structured economic reforms would begin to attract foreign investments, thus reducing the dependency on remittances and aid. Some progress includes: careful privatization of state enterprises, especially large enterprises and alleviation of poverty and inequality. Low Scenario The political uncertainty or social unrest remains the largest threat to economic progress. Low economic growth would be expected in this scenario – an average growth of about 3%, with considerable dependence on foreign aid and remittances rather than locally generated growth. The grey economies remain sizable, and little progress happens in economic reforms. Failure to industrialize and being highly agriculture-dependent will also cause difficulty in eventual integration with the rest of Europe.

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Appendix 4: Load shape adjustments

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Historical electricity consumption and load shapes Wherever possible we have sought to source our historical data regarding electricity demand and load profiles from the utilities. Given the importance of the electricity sector to the jurisdictions concerned, in a number of instances, we have also received inputs regarding historical data and assumptions for projections from Government and electricity sector regulators. The Consortium has also engaged in an extensive contact programme with utilities, governments and regulators in the region to clarify issues arising from the data provided to ensure that as far as possible consistency between the data for each jurisdiction can be achieved. In the first phase of data collection, historical electricity demand data for each country was initially sourced from data provided by EKC [24], KfW [5], ESTAP [6] and publicly available data from utility annual reports. Further hourly electricity demand data from 2001 was provided by MWH, a firm in the PwC consortium, from a previous hydropower study [22]. The data from existing studies and sources was collected during February 2004 and a request for additional missing data was made, through our local experts, in early March, 2004. A first, preliminary demand forecast, based on incomplete datasets for most countries, was circulated to all countries on April 17, 2004 with an invitation to comment. Comments were incorporated in a presentation via video conference to the Donor Group on May 4, 2004, a revised forecast was circulated to all countries on May 27, 2004 and presented to all countries at the 4th Athens Forum on June 2, 2004. Following comments and discussions during and after the Forum a Final Demand forecast was circulated to most countries (except those with some missing data) on June 11, 2004. At the request of the donors, ECA Consulting reviewed the approach to the demand forecasting in June, further comments and data were received from the utilities in June and July and the demand forecast was submitted for use in the preliminary GTMax runs in August, 2004 presented in a draft interim report submitted at the end of August, which incorporated the preliminary generation investment plan for South East Europe. The results of these preliminary GTMax runs were revised in September and presented on October 12th, 2004 to the Donor Group and again on October 25th, 2004 at the 5th Athens Forum to all countries. Following review by the utilities of the results of the preliminary investment plan, some countries requested further changes to their demand forecast in the Base Case and Cases 1& 3. The subsequent changes to these countries were agreed with the countries during November and final GTMax runs were made in December 2005. In Section 2.5.3 we describe some of the adjustments we have made to jurisdiction specific data to reflect the situations of those jurisdictions. Table A4.1 provides a summary for each jurisdiction of the main data sources. Table A4.1: Summary of sources for historical data Jurisdiction

Albania

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Sources for historical demand data and population KESH, Population: Albanian Statistical Office. Population

Year

Availability of load shape data

2000 2001

Data from MWH, 8760 hours Not available

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Sources for historical demand data and population Growth rate from “First part of the national strategy for energy” ZEKC, US Census Bureau

Bulgaria

NEK

Croatia

HEP, Hrvoje Pozar [3]

UNMIK

ESTAP report

FYR Macedonia

ESM US Census Bureau

Montenegro

KfW [5]6, Serbia and Montenegro Statistical Office US Census Bureau Electricity demand and losses: National Institute of Statistics (Romania) Population: Ministry of Economy and Commerce 2003. GDP forecasts: Ministry of Economy and Commerce. EPS, GDP and Population figures from 2002 Census: Serbia and Montenegro Statistical Office growth rate

Romania

Serbia (excluding UNMIK)

6

Year

Availability of load shape data

2002 2003

Data from SEETEC, 8760 hours Data from SEETEC, 8760 hours

2000 2001 2002 2003 2000 2001 2002 2003 2000 2001 2002 2003 2000 2001 2002 2003 2000 2001 2002 2003 2000 2001 2002 2003 2000

Not available Not available All 3 utilities combined, 8760 hours All 3 utilities combined, 8760 hours Not available Data from MWH, 8760 hours Not available Data from utility NEK, 8760 hours Data from MWH, 8760 hours Not available Not available Available for 30 representative days from HEP Not available Data from utility KEK, 8760 hours Data from utility KEK, 8760 hours Data from utility KEK, 8760 hours Data from MWH, 8760 hours Data from utility ESM, 8760 hours Data from utility ESM, 8760 hours Data from utility ESM, 8760 hours Data from MWH, 8760 hours Data from utility EPCG, 8760 hours Data from utility EPCG, 8760 hours Data from utility EPCG, 8760 hours Data from MWH, 8760 hours

2001

Data from utility EPCG, 8760 hours

2002

Data from utility EPCG, 8760 hours

2003

Data from utility EPCG, 8760 hours

2000

Not available

2001

Data from utility EPS, 8760 hours

2002

Data from utility EPS, 8760 hours

Numbers in square brackets refer to publications listed in Chapter 4 of this report.

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Sources for historical demand data and population from “Least Cost Investment Plan for Serbia Electricity Sector. Workshop III Demand and Least Cost Models” [7]

Year

Availability of load shape data

2003

Data from utility EPS, 8760 hours

Country specific assumptions and data adjustments Albania Load shedding We have adjusted the Albanian hourly demand profile we received from KESH through SEETEC by adding shed load back to the profile. We do this as the analysis undertaken by WASP and GT Max will perform its own calculation of shed load in the forecast period. We were provided with monthly total shed load data for 2003 and 2002 by KESH which showed that shed load amounted to 662GWh in addition to the 5,894GWh demand in 2003 (an 11% increase). The actual hourly shed load profile was not made available to us by KESH, so we have assumed that the load shedding profile can be added to the demand profile in a similar manner to the UNMIK actual data presented later. The UNMIK data shows that load is shed over almost the entire year, in proportion to the system demand at the time. We have estimated a value of shed load for each hour such that the amount of shed load for each hour summed over the month equals the actual historical figure given to us by KESH. The result of our estimated adjustment for shed load is shown in the following figure. Figure A4.1: 2003 Albania system load curve correction for shed load Addition of shed load to Albania 2003 demand

Demand (MW)

1800 1600

Including shed load

1400

Excluding shed load

1200 1000 800 600 400 200 0 0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Hours at or above load

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The Albanian shed load demand has been added to our demand forecast as we aim to forecast unconstrained demand for each jurisdiction. If transmission or generation constraints forecast by WASP and GTMax then mean that load cannot be met, it is shed in our forecasts once the WASP and GTMax runs have been made. We therefore avoid estimating ‘pent up demand’ in our forecasts. We tabulate below the annual demand with and without shed load. Table A4.2: Historical impact of load shedding in Albania

2002 2003

Gross consumption (GWh) (from 8760 demand profile) 5,348 5,746

Shed load (GWh)

Shed Share of Gross (%)

847 662

16% 11%

Forecast start point (Gross + shed) (GWh) 6,195 6,408

Technical Losses The surge in domestic demand on the electricity system in Albania has had a significant impact on the location and profile of electricity demand. The original transmission and distribution system was not designed to service the load centre, which have become dominant following this shift from industrial to domestic demand and the changing location of demand. Substation capacity and design flows have been completely altered following this shift, and there has been little investment in the networks since this change in flow patterns to alleviate bottlenecks and pinch points. The Tirana area in particular has seen demand far outstrip the network capacity required to reliably supply it. As a consequence, and in combination with the fact that most generation is in the north and most load is in the south around Tirana, we understand that technical losses have risen to exceptionally high levels, even without considering non-technical losses. While the commissioning of the Vlora 135MW CCGT in the South by July 2007 will help to reduce this problem, major investment is required to reconfigure the network and flow patterns to alleviate the high amount of technical losses, and we do not forecast this to occur in the short term. So while we forecast technical losses to decrease in most other countries to about 10% by 2010, in Albania, we target 14% in 2015 (based on the Government of Albania publication “First Part of the National Energy Strategy”). Non-technical Losses As for the other countries in this study, we have added historical estimates of non-technical losses in Albania to net demand and used this figure in our econometric analysis. In Albania, 2003 data from the utility suggests that non technical losses were 12.2% of net consumption. We consider that non-technical losses, although not paid for, are nevertheless utilised and therefore contribute to the gross domestic product. Were nontechnical losses excluded from the electricity intensity, the figure for Albania would be understated. We assume that non-technical losses will reach a level of 5% by 2015 (similar to UNMIK.)

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Table A4.3: Assumed adjustment for losses to demand in Albania Sales Shed load Non-technical losses Net demand forecast (GWh) (GWh) (GWh) start point (GWh) 2002 3,130 847 777 4,753 2003 3,492 662 708 4,862 Bosnia & Herzegovina We were provided with hourly demand data for 2002 and 2003 for each of the three BiH utilities, EP HZHB, EP BiH and ERS by ZEKC. We added these hourly demand values together for each hour of the year. We confirmed with ZEKC that the demand data did not include pumped storage or auxiliary demand, we have assumed that shed load is negligible and therefore no adjustments were made to the data. Total losses were running at 18% in 2003, with non-technical losses running at an estimated 5.4%7. We have assumed in our forecast that these non-technical losses reduce to zero by 2010. Bulgaria We were provided with hourly demand data for 2003 by NEK. The demand data included pumped storage and auxiliary demand, and we have corrected the data according to the technique and assumptions described in Appendix 4. The correction applied had the following effect on the start point from which we began our forecast. Table A4.4: Impact of pumping and auxiliary demand in Bulgaria Generation from Pumping Auxiliary Forecast start point hourly profile demand (GWh) demand (GWh) (Gen-pump-aux) (GWh) (GWh) 2001 37,044 767 4,351 31,926 2002 36,406 837 4,106 31,463 2003 37,057 483 4,230 32,344 We have assumed zero non-technical losses in Bulgaria. Croatia In creating a base year shape for the daily load profiles, the technique applied to Croatia differs from other countries in this study in that a complete set of 8760 hours of demand for recent years was not available. Instead, hourly demand profiles for thirty representative days were provided by HEP for the 3rd week of January, April, July and October and the maximum and minimum days in 2003. We have used these representative profiles to reconstruct a 2003 annual hourly demand profile. We have assumed zero non-technical losses in Croatia. UNMIK Load shedding

7

Based on correspondence with World Bank staff and the three utilities, EPBiH, EPRS and EPZHB.

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We have adjusted the UNMIK demand profile by adding shed load back to the profile. We do this as the analysis undertaken by WASP and GT Max will provide information regarding shed load for the forecast period. The shed load profile amounts to a substantial amount of energy; 650GWh in addition to the 3,746GWh demand in 2003 (a 17% increase). KEK have provided us with the hourly shed load for 2003 and we have added each hour back to the system demand load curve. We show the result of this addition in the following graph, which shows that load has been shed in UNMIK over more than 90% of the duration of the year 2003. Figure A4.2: 2003 UNMIK system load curve showing effect of shed load Addition of shed load to UNMIK 2003 demand 1000 900

Including shed load

800

Excluding shed load

Demand (MW)

700 600 500 400 300 200 100 0 0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Hours at or above load

The UNMIK shed load demand has also been added to our demand forecast for the same reasons described under the section on Albania. We tabulate below the annual demand with and without shed load as per these tables and how we arrive at the starting 2003 value for the UNMIK demand forecast. Table A4.5: Impact of load shedding UNMIK Gross consumption Shed Shed (GWh) load Share of (GWh) Gross (%)

Shed load losses (GWh)

Forecast start point (Gross + shed) (GWh)

2001

3,345

552

17%

130

4,027

2002

3,546

705

20%

166

4,418

2003

3,746

651

17%

153

4,551

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However, even adding the shed load to the UNMIK hourly electricity demand profile does not produce a profile through the year which would be expected to represent the stable and efficient electricity system which will characterise the future UNMIK system. We have therefore not used the 2003 KEK actual hourly demand profile as a basis for forecasting the hourly electricity demand. We have instead substituted an ‘idealised’ demand profile for UNMIK which has been morphed to reflect the monthly actual profile of demand in UNMIK but exhibits smoother daily and hourly demand fluctuations than has historical been the case in UNMIK.

Data adjustments for losses

In addition to the significant component of shed load in UNMIK, the system is characterised by a high degree of losses, both technical and non-technical. The last year for which net demand is available is 2001 (although KEK have supplied us with data on gross demand up to 2003) and therefore the latest estimate of total losses in UNMIK is 2001 and amounts to 50% [5], broken down into 19% technical losses and 31% non-technical. We have assumed this level of losses has remained constant in 2002 and 2003. We show in the following table the calculation of the starting point of our forecast demand. Table A4.6: Assumed adjustment for losses to demand in UNMIK Sales Technical losses Non-technical Net demand forecast (GWh) (GWh) losses (GWh) start point (GWh) 2001 1,676 639 1,030 3,345 2002 1,777 678 1,092 3,546 2003 1,877 716 1,153 3,746 For the projections, non-technical losses are reduced linearly from 23% in 2003 to 5% in 2015. Technical losses are reduced from 22% in 2003 and fall to 15% by 20208. Following comments received from KEK, the Ministry and ERO on 8 November, 2004, we have added additional demand resulting from increases in usage at Trepca mines and a new Feronikel company as shown Table A4.7. We have assumed these customers will follow the same profile as the system demand. Table A4.7: Forecast additional UNMIK large consumer demand 2003 2004 2005 2006 Trepca, MW 5 22 44 44 Trepca GWh 35 193 385 385 Feronikel MW 0.3 0.3 50 50 Feronikel GWh 47 195 635 635

2007 and beyond 44 385 80 925

8

These figures were provided to the consortium by the Prime Minister’s office in Kosovo on 12 November 2004. Our forecast is based on this updated losses data. The new information however has not been included in the 2003 data shown in Table A4.6 as it would have no material impact on the demand forecast for the SEE region.

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FYR Macedonia We were provided with hourly demand data for 2001, 2002 and 2003 by ESM. We confirmed with ESM that the demand data did not include pumped storage or auxiliary demand, we have assumed that shed load is negligible and therefore no adjustments were made to the data. We have assumed zero non-technical losses in FYR Macedonia. Montenegro We were provided hourly demand data for 2001, 2002 and 2003 by EPCG. We confirmed with EPCG that the demand data did not include pumped storage or auxiliary demand, we have assumed that shed load is negligible and therefore no adjustments were made to the data. We have assumed zero non-technical losses in Montenegro. Romania We were provided with hourly demand data for 2003 by Transelectrica. The demand data included auxiliary demand, and we have corrected the data according to the technique and assumptions described in Appendix 4. We show in the table below the reconciliation between the hourly demand profile and the forecast starting point. We have assumed zero non-technical losses in Romania. Table A4.8: Impact of pumping and auxiliary demand in Romania Generation from hourly Auxiliary demand profile (GWh) (GWh) 2001 51,002 4,670 2002 52,335 4,700 2003 54,454 4,760

Forecast start point (Gen-aux) (GWh) 46,332 47,635 49,694

Serbia The latest year for which consistent historical annual demand data is available for Serbia is 2002 [2]. Only the gross demand provided by EPS from the sum of the hourly demand was available for 2003. We have therefore assumed that losses remain at the same level in 2003 as in 2002 (19.7%) giving net demand a value of 24,998GWh for 20029. We have assumed zero non-technical losses in Serbia.

9

EPS did submit 2003 estimated gross consumption, net demand and losses data in June 2004 (including UNMIK) and November (excluding UNMIK) 2004. However, the data was not reconcilable with the 8760 hourly demand profiles we had previously received for Serbia subtracting UNMIK. The issue was raised with EPS. Given project timescales, and the difficulty of reconciling the new data, this data has not been factored into the demand forecast presented in this report. However, we note that while the gross consumption has been revised upward, the 2003 net demand of 25,102GWh is within 0.5% of the net demand we had previously assumed.

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Load shape adjustments We have confirmed with most of the utilities that the hourly load profiles they provided us with were equal to the total net consumption as we define it in Figure 2.1; that is inclusive of all technical and non-technical losses, but exclusive of auxiliary demand (power station consumption) and pumping demand. We separately describe our correction for the addition of shed load for Kosovo and Albania in Section 2.5. The reason we have defined net consumption in this way for this study is that the demand forecasts are used by GTMax which calculates independently the own consumption by power stations (which will vary depending on the plant mix) and pumped storage (which will vary depending on reservoir levels and wholesale price differentials). However, the hourly demand data from NEK for Bulgaria included auxiliary and pumping demand and the hourly demand data from Transelectrica for Romania included auxiliary demand. We describe here the correction we applied to the 2003 hourly demand profiles in order to correct the profiles, which are the basis for the entire forecast period, to be consistent with the other countries. For Bulgaria, NEK informed us that auxiliary consumption was 4,230GWh (11.6%) and pumping was 483GWh (1.3%) of total generation (37,057GWh) in 2003. However, profiles of how this demand varied for each hour of the year were not available from NEK, and we have therefore adjusted the hourly load profiles as follows: 1. For auxiliary demand, we have assumed that the total annual demand is spread over each hour of the year in proportion to the demand at that time. So at peak demand times, the auxiliary demand is highest and a minimum system demand, we assume auxiliary demand is lowest. 2. For pumping demand, we have assumed that the annual pumping demand is spread equally each night across the hours of 1am-6am throughout the year. These six hours of pumping per day equate to a pumping factor of about 25%, which is broadly consistent with pumping profiles in other countries. To illustrate the effect of this correction, we show in the following graph the unadjusted and adjusted maximum and minimum day for the 2003 Bulgarian data.

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Figure A4.3:- Adjustment of Bulgarian daily load profiles to subtract auxiliary & pumping demand Max day (unadjusted)

Max day (adjusted)

Min day (unadjusted)

Min day (adjusted)

8000 7000 6000

MW

5000 4000 3000 2000 1000 0 1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour

Source: NEK, PwC Calculations

For Romania, Transelectrica informed us that auxiliary consumption was 4,760GWh (8.7%) of total generation (54,454GWh) in 2003. Again, profiles of how this demand varied for each hour of the year were not available from Transelectrica, and we have therefore adjusted the hourly load profiles in the same manner as described for Bulgaria above. To illustrate the effect of this correction, we show in the following graph the unadjusted and adjusted maximum and minimum day for the 2003 Romanian data. Figure A4.4:- Adjustment of Romanian daily load profiles to subtract auxiliary demand Max day (unadjusted)

Max day (adjusted)

Min day (unadjusted)

Min day (adjusted)

9000 8000 7000

MW

6000 5000 4000 3000 2000 1000 0 1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Source: Transelectrica, PwC Calculation

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Hour

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Developing annual load profiles Estimating demand for the GIS requires an understanding of how demand profiles will change over time. Increasing peakiness in demand, for example, may result in a need to commission additional plant earlier than projected10 if demand was growing in the off peak times of the day. Historical load profiles Our approach to developing annual load profiles has depended upon the level of historical data available. We have attempted to collect detailed electricity demand data for the last four years for each of the jurisdictions, and have succeeded in collecting one complete data set of hourly demand for each hour of the year 2003 for all jurisdictions except Croatia (HEP who provided 30 representative days.) This data provides the basis of our load shape projections for the forecast period. Table A4.9 summarises the completeness of the historical load profile data we have been able to gather by jurisdiction. Table A4.9: Summary of available historical load shape data Jurisdiction Year Availability of load shape data Albania 2000 MWH with 8760 hours 2001 Not available 2002 Data from SEETEC, 8760 hours 2003 Data from SEETEC, 8760 hours BiH

2000 2001 2002 2003

Not available Not available All 3 utilities combined, 8760 hours All 3 utilities combined, 8760 hours

Bulgaria

2000 2001 2002 2003

Not available MWH with 8760 hours Not available Data from utility NEK, 8760 hours

Croatia

2000 2001 2002 2003

UNMIK

2000 2001 2002

MWH with 8760 hours Not available Not available Available for 30 representative days from HEP Not available Data from utility KEK, 8760 hours Data from utility KEK, 8760 hours

10

This point also allows us to define our materiality threshold with demand forecasting. For some of the larger systems, the incremental generating unit is likely to have a capacity of approximately 300MW. Assuming a load factor of 50% implies a variation in demand of approximately 1,300GWh in a year would result in a material impact on the generation investment study. For smaller systems, the incremental unit may be smaller, for example 100MW in which case the material variation in demand is +/-400GWh in a year.

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Jurisdiction

Year 2003

Availability of load shape data Data from utility KEK, 8760 hours

FYR Macedonia

2000 2001 2002 2003

MWH, 8760 hours Data from utility ESM, 8760 hours Data from utility ESM, 8760 hours Data from utility ESM, 8760 hours

Montenegro

2000 2001 2002 2003

MWH, 8760 hours Data from utility EPCG, 8760 hours Data from utility EPCG, 8760 hours Data from utility EPCG, 8760 hours

Romania

2000 2001 2002 2003

MWH, 8760 hours Data from TRANSELECTRICA, 8760 hours Data from TRANSELECTRICA, 8760 hours Data from TRANSELECTRICA, 8760 hours

Serbia

2000 2001 2002 2003

Not available Data from utility EPS, 8760 hours Data from utility EPS, 8760 hours Data from utility EPS, 8760 hours

Changes to seasonal demand patterns All of the South East European and indeed Central Eastern and Western European countries are experiencing changes to the seasonal demand for electricity. Figure A4.5 shows the example of Croatia. It is clear that monthly electricity demand as a percentage of total annual demand throughout SEE is increasing in summer months (chiefly June, July and August) and decreasing in winter months (chiefly November, December and January). Spring and autumn monthly demand is relatively more stable.

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Figure A4.5: Historical change in monthly energy demand for Croatia

Monthly/Annual Energy Demand

1999

2000

2001

2002

2003

12% 11% 10% 9% 8% 7% 6% Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: UCTE

We assume that there are two reasons for this shift in seasonal demand patterns (although we note that (b) is not a necessary condition, as winter share of annual demand will decrease even if winter load does not decrease, as long as summer demand increases): 1. Increased air-conditioning & refrigeration load in summer, dependent on two factors: a. Increased consumer wealth and spending on luxury goods such as airconditioning & refrigeration. b. A sufficiently high average temperature during summer to drive demand for air-conditioning & refrigeration. 2. Decreased space heating load in winter, dependant on two factors: a. The availability of alternative fuels such as gas (as in Romania) or oil which are more efficient at heating than electricity and therefore of overall benefit to the economy. b. A properly functioning electricity market which sends the correct price signals to the domestic customer to enable them to make the correct economic decisions and switch winter heating from electricity. Given this recent and continuing shift in energy demand from winter to peak in all jurisdictions, the forecast must take into account (a) when this trend might stabilise and (b) how fast the monthly demand will vary in each jurisdiction until it reaches this stable point. To enable us to estimate (a), we have compared in Figure A4.6 several neighbouring countries in the region.

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Figure A4.6: Comparison of 2003 monthly energy demand for European countries 12%

Monthly/Annual Energy Demand

11%

10%

Greece Italy Croatia Austria Poland Bulgaria Serbia

9%

8%

7%

6% Jan Source: UCTE

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

From the figure above, we have drawn several conclusions: 1. Greece and Italy experience the annual peak energy demand in July, not during the winter as for SEE countries. This is largely the result of a temperature effect with milder winters and hotter summers in these two countries than in SEE countries. July demand is 10.1% and 9.3% of annual demand in Greece and Italy respectively. 2. Croatia, Austria and Poland still experience their peak monthly demand in winter, Croatia and Austria (Figure A4.6) both have a greater share of demand in July (8.0% and 7.7% respectively). 3. Bulgaria and Serbia are taken as examples of the remaining SEE countries (i.e. excluding Croatia) being studied but are representative of all the others. These countries have very high winter demand and very low summer demand, amounting in July to just 6.9% and 6.5% respectively. We assume that the trend in increasing summer demand is being driven by increasing consumer wealth which maybe expected to continue. Therefore, we assume that the seasonal variation in demand in SEE countries including Bulgaria and Serbia will tend toward Croatia and Austria. However, Croatia, with its relatively high share of summer demand, is not yet showing signs of stabilising as seen in Figure A4.5. Furthermore even Austria is still experiencing increasing share of demand in summer as shown in Figure A4.6, albeit at a slower rate than Croatia.

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Figure A4.7: Historical change in monthly energy demand for Austria

Monthly share of annual energy demand

11.0% 10.5% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Also shown on the following page is the evolution of seasonal demand in Italy which is also seen to be changing rapidly and continues to do so. Therefore, all of the immediately surrounding countries to SEE which could be considered as models due to their relatively higher consumer wealth and hence summer air-conditioning load with associated final seasonal energy demand distribution model cannot be used, as they are either too different in temperature (Greece), or still themselves evolving (Austria, Italy). We note that Greece does in fact seem to have stabilised at it’s high levels of summer energy demand.

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Figure A4.8: Historical change in monthly energy demand for Italy

Monthly share of annaul energy demand

10.0% 9.5%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0%

Source: UCTE

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

We must therefore turn to a country outside the region to determine the potential final seasonal demand profile of energy demand in SEE. This target country must possess the following criteria: 1. Has achieved economic transformation; 2. Has a similar temperature profile to SEE; 3. Well developed in terms of air-conditioning and summer electricity demand patterns. The comparison of capital city average monthly temperatures in Figure A4.9 shows that: •

The SEE region can be considered to be approximately isothermal for the purposes of this study, and therefore all countries can be expected to evolve to a similar profile of monthly electricity demand as a share of annual.

•

Greece, with 10.1% of annual demand in July, appears too hot be a model for SEE; and

•

Italy is closer to SEE in terms of temperature profile but it’s 9.2% of annual demand in July is still growing.

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Figure A4.9: Monthly average temperatures in comparator country cities Rome

Zagreb

Sofia

Athens

Vienna

30

Mean Monthly Temp (deg C)

25 20 15 10 5 0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

-5 Source: qwikcast.com

Vienna is clearly the closest temperature profile to the SEE countries. While it’s share of July energy demand is still increasing, it has approached that of Croatia in recent years (7.7% vs 8.1%). We have therefore conservatively assumed that Austria and the other SEE countries will increase their July share of annual energy to 8% in the medium to long term. We show, in Figure A4.10, the historical evolution of monthly energy demand in Croatia, and the assumption we have made that it remains the same after 2003.

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Figure A4.10: Transformation of load shapes based on monthly ratios to annual system peak demand; Example of Croatia

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Monthly GWh/Annual GWh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 10.0% 9.4% 9.1% 7.8% 7.1% 7.0% 7.5% 7.5% 7.3% 7.9% 9.1% 10.4% 10.5% 9.2% 9.2% 7.6% 7.2% 7.3% 7.8% 7.8% 7.5% 7.9% 8.2% 9.6% 9.4% 8.4% 8.5% 8.0% 7.2% 7.1% 7.8% 7.8% 7.6% 8.0% 9.2% 11.0% 10.5% 8.7% 8.6% 8.0% 7.3% 7.3% 8.1% 7.8% 7.5% 8.1% 8.3% 9.9% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8%

In addition to changing the load profile, the demand modelling ensures that the total GWh electricity demand for the profiled year equal the projected GWh target produced by the forecast demand econometric analysis is described in Section. The rate of change of seasonal demand patterns The next issue is how fast the monthly demand will progress towards the stable point. We have observed a variation profile in Croatia in recent years shown in Figure A4.10. We assume Croatia to be the system others in the region will follow because of it's higher per capita income, and is a suitable proxy for what other countries in the region will do in future provided their incomes increase in future also.

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Annual change in monthly share of demand (%)

Figure A4.11: The historical average of monthly variation in Croatia as applied to other countries in the region in demand forecast. 0.200% 0.150% 0.100% 0.050% 0.000% -0.050%

Jan

Feb Mar

Apr May Jun

Jul

Aug Sep Oct

Nov Dec

-0.100% -0.150% -0.200%

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The resultant monthly variations are applied to each of the countries in different ways following consultation with the utilities and consideration of factors unique to those countries Jurisdiction Albania Bosnia and Herzegovina Bulgaria Croatia UNMIK

Macedonia Montenegro Romania Serbia (excluding UNMIK)

Assumed seasonal demand profile change Continue historical level (7.3%) to 2007. Post 2007 increase July share to 7.8% which is reached by 2010 then stable. Reaches 8.0% in 2007 from the present level of 7.4%. Increases from the current level of 6.7% to 7.9% by 2010 (following discussions with NEK). Remain at 2003 monthly demand profile with 8% demand in July. We forecast UNMIK demand using a demand profile corrected for shed load (described in section 3.5.3.5). We forecast the corrected July share (7.0%) to 2007, and increase this share to reach 8.0% by 2014. Modify each month from 2004 until July reaches target of 8.0% in 2010. No change because of a very high system load factor dominated by single industrial user. Domestic demand changes not expected to influence profiles in future. Continuation of historical average. Increases to 7.6% by 201011.

11

Following discussions of these assumptions with EPS who have noted that the summer air conditioning load in Balkans countries may not be the same as in the Mediterranean/Adriatic coast (which tends to have electricity demand reflecting tourism patterns in part of the country) and therefore may not expect to see the full extent of the changes in load shape experiences in Croatia.

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Appendix 5: Findings from ECA methodology review

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At the request of the World Bank, Economic Consulting Associates (ECA), undertook a review of the methodology used by the PwC Consortium to undertake the electricity demand forecasting for the SEE region. PwC Consortium representatives met with Paul Lewington of ECA on the 18 June 2004 and have subsequently corresponded regarding the demand forecasts. The main points arising from the ECA review are described below: 1. Methodology The approach to demand forecasting adopted by the PwC Consortium is appropriate for the purpose of the study and will produce a consistent set of results. 2. Estimate of the long run responsiveness of electricity demand to GDP per capita growth Economic Consulting Associates noted that the sample of income elasticities of electricity demand used in the PwC Consortium data set had a wide range. ECA suggested the removal of coefficients from Central and Eastern Europe. The impact of the different sample on the value of the income elasticity co-efficient is shown in the table.

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Figure A5: 1: Effect on the long term GDP coefficient of a revised data set

Romania Albania Bosnia Croatia Hungary Czech Poland Slovakia Slovenia Estonia Portugal Turkey Greece Spain Ireland Indonesia Malaysia Philippines Thailand Brazil Chile Mexico Average of Comparators Median of Comparators

Long term coefficient of net electricity demand per capita on GDP per capita 2.413 1.987 0.336 0.868 1.110 0.913 0.189 0.427 0.581 0.490 1.418 2.783 1.281 1.536 0.909 2.550 2.139 1.007 1.637 1.524 1.361 0.394

Restricted sample of long term coefficients based on ECA suggestions

1.236

1.534

1.196

1.321

1.110 0.913 0.427 0.581 0.490 1.418 2.783 1.281 1.536 0.909 2.550 2.139 1.007 1.637 1.524 1.361

Using a long term elasticity of 1.321 makes only minor changes to our findings The figure compares the PwC Consortium Case 2 demand forecast for the region under three scenarios: a. Using the long term GDP elasticity of electricity demand of 1.196 converting the starting electricity intensities using exchange rates (LT1.196 Forex); b. Using the long term GDP elasticity of electricity demand of 1.321 converting the starting electricity intensities using exchange rates (LT1.321 Forex);

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LT 1.196 Forex

LT 1.321 Forex

300,000 250,000 200,000 150,000 100,000 50,000

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

-

3. Combined effect of adopting PPP conversions and the higher income elasticity of demand The PwC consortium analysis of electricity intensity is based on intensity being defined as: Electricity Consumption in the jurisdiction GDP per capita (in 1995 terms) in the jurisdiction for each of the jurisdictions considered in the study. The GDP per capita figures for each country are all stated in US Dollars and are converted from national currencies using appropriate exchange rates. ECA have suggested that the Consortium consider converting the initial electricity intensity calculations based on GDP per capita figures converted using Purchase Power Parity figures rather than exchange rates and test the sensitivity of the forecasts to that type of conversion. We have tested the sensitivity of our conclusions regarding demand forecasts in each of the jurisdictions our findings are shown in the figure below:

31 December 2004

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LT 1.196 Forex

LT 1.321 Forex

LT 1.321 PPP

350,000

300,000

250,000

200,000

150,000

100,000

50,000

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

-

The figure compares the PwC Consortium Case 2 demand forecast for the region under three scenarios: a. Using the long term GDP elasticity of electricity demand of 1.196 converting the starting electricity intensities using exchange rates (LT1.196 Forex); b. Using the long term GDP elasticity of electricity demand of 1.321 converting the starting electricity intensities using exchange rates (LT1.321 Forex); c. Using the long term GDP elasticity of electricity demand of 1.321 converting the starting electricity intensities using PPP (LT1.321 PPP); The PPP based conversion of the electricity intensity calculations leads to a substantial shift in the demand forecast for the region and also some significant shifts in the data for particular jurisdictions (most notably Romania.) Our analysis of the PPP data suggests that it is unclear how reliable the PPP data for the economies in the region is at present and this is likely to be a significant driver of inaccuracy in the data and therefore undermine the reliability of the regional demand forecast. 4. The impact of prices on electricity demand

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ECA reviewed the method adopted by the Consortium to reflect prices in the model. ECA concurred with the Consortium that it is impossible to discern the impact of prices on electricity demand from historical data from the 1990s for the countries of Central and Eastern Europe and that the impact of prices is lost in broader impact of overall restructuring and reform. ECA therefore accepted that the Consortium’s approach, in which price impacts are captured in the shift in electricity intensity to a comparator level is appropriate.

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Appendix 6: Country demand forecasts

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11

Appendix 6.0 SEE Region Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for SEE Region was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.0.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 1992 1993 1994 120,856 139,732 13.5% 1995 127,730 149,627 14.6% 1996 134,158 158,236 15.2% 1997 130,051 154,764 16.0% 1998 127,724 153,217 16.6% 1999 120,059 145,908 17.7% 2000 123,121 149,959 17.9% 2001 154,313 2002 153,305 53,566 2003 159,953 Source: PwC, governments, utilities (1) Net Demand GWh

Gross

Net

180,000

Consumption GWh

160,000 140,000 120,000 100,000 80,000 60,000 40,000 2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

20,000

Source: PwC, governments, utilities

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y

Figure A6.0.2: Historical Sectoral Electricity Demand Domestic Industry Other Demand Demand Demand GWh GWh GWh 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: PwC, governments, utilities

Total Net Demand GWh 120,856 127,730 134,158 130,051 127,724 120,059 123,121 -

Domestic

Domestic Demand Growth

Industry Demand Growth

-

Industry

Other Demand Growth -

Total Net Demand Growth -

5.4% 4.8% -3.2% -1.8% -6.4% 2.5% -

Other

1 1

Consumption GWh

1 1 1 1 0 0 0 0 2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Source: PwC, governments, utilities

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Figure A6.0.3: Historical System Load Factor Gross Auxilliary Pumping Demand Demand Demand GWh GWh GWh 1990 1991 1992 1993 1994 139,732 1995 149,627 1996 158,236 1997 154,764 1998 153,217 1999 145,908 2000 149,959 2001 154,313 2002 153,305 2003 159,953 Source: PwC, governments, utilities

Gross Consump GWh 139,732 149,627 158,236 154,764 153,217 145,908 149,959 154,313 153,305 159,953

Gross Consmp Growth 0.0% 0.0% 0.0% 0.0% 7.1% 5.8% -2.2% -1.0% -4.8% 2.8% 2.9% -0.7% 4.3%

System Peak MW 27,117

System Peak Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

System Load Factor

67.3%

70%

60%

31 December 2004

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1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2002

45%

0.070814 0.057537 -0.021945 -0.009996 -0.047702 0.027761 0.029036 -0.006533 0.043367 2001

50%

2003

55%

2000

System Load Factor

65%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.0.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 0.0% 0.0% 0.0% 2002 0.0% 0.0% 0.0% Case 1 Case 3 Case 2 2003 4.3% 4.4% 4.4% 2004 4.5% 5.0% 5.1% 2005 4.2% 4.9% 5.0% 6% 2006 3.1% 4.6% 5.3% 2007 3.1% 4.6% 5.4% 5% 2008 3.1% 4.6% 5.4% 4% 2009 3.1% 4.6% 5.4% 2010 3.1% 4.7% 5.4% 3% 2011 3.1% 4.6% 5.2% 2012 3.0% 4.6% 5.2% 2% 2013 3.0% 4.5% 5.2% 1% 2014 3.0% 4.6% 5.1% 2015 3.0% 4.6% 5.1% 0% 2016 3.0% 4.5% 5.1% 2017 3.1% 4.3% 5.0% 2018 3.1% 4.2% 5.0% Source: PwC, governments, utilities 2019 3.1% 4.2% 5.0% 2020 3.1% 4.1% 5.1% Source: PwC, governments, utilities Figure A6.0.5: Forecast Population

yoy growth

60,000

0.18% 0.16% 0.14% 0.12% 0.10% 0.08% 0.06% 0.04% 0.02% 0.00% -0.02%

50,000 40,000 30,000 20,000 10,000

31 December 2004

2020

2018

2016

2014

Source: PwC, governments,

2012

2010

2008

2006

2004

2002

2000

-

Pop ('000) ytd growth yoy growth 2000 2001 2002 53,566 2003 53,636 0.0% 0.13% 2004 53,697 0.1% 0.11% 2005 53,779 0.3% 0.15% 2006 53,827 0.4% 0.09% 2007 53,874 0.4% 0.09% 2008 53,923 0.5% 0.09% 2009 53,972 0.6% 0.09% 2010 53,995 0.7% 0.04% 2011 54,019 0.7% 0.05% 2012 54,068 0.8% 0.09% 2013 54,116 0.9% 0.09% 2014 54,114 0.9% 0.00% 2015 54,112 0.9% 0.00% 2016 54,108 0.9% -0.01% 2017 54,197 1.0% 0.16% 2018 54,285 1.2% 0.16% 2019 54,372 1.4% 0.16% 2020 54,458 1.5% 0.16% Source: PwC, governments, utilities

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

50,000

2006

2003

0

Source: PwC

GDP per Capita (95 US$) 2002 1,800 2003 1,892 2004 1,983 2005 2,079 2006 2,173 2007 2,273 2008 2,378 2009 2,488 2010 2,604 2011 2,725 2012 2,849 2013 2,977 2014 3,113 2015 3,255 2016 3,401 2017 3,546 2018 3,695 2019 3,849 2020 4,008 Source: PwC Year

31 December 2004

LF% 67.1% 68.0%

70.2%

70.4%

2018

100,000

2015

150,000

2012

200,000

2009

System Peak Demand

Gross Consumption GWh

250,000

Figure A6.0.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 161,007 27,377 GWh MW 2004 163,290 2005 166,203 27,882 40000 2006 169,071 2007 172,234 35000 2008 175,383 30000 2009 178,721 25000 2010 182,248 29,649 2011 186,027 20000 2012 189,956 15000 2013 194,408 10000 2014 199,158 2015 204,487 33,151 5000 2016 210,389 0 2017 216,377 2018 222,436 2019 228,805 2020 235,201 38,049 Source: PwC Figure A6.0.7: Case 2 Economic Model Forecast Calculation Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 1.31 2,350 53,566 125,864 5.1% 1.29 2,443 53,636 131,054 4.8% 1.25 2,481 53,697 133,209 4.8% 1.22 2,537 53,779 136,448 4.5% 1.20 2,597 53,827 139,815 4.6% 1.17 2,664 53,874 143,543 4.6% 1.15 2,734 53,923 147,420 4.6% 1.13 2,809 53,972 151,599 4.7% 1.11 2,890 53,995 156,027 4.6% 1.09 2,974 54,019 160,664 4.5% 1.07 3,060 54,068 165,433 4.5% 1.06 3,147 54,116 170,318 4.6% 1.04 3,240 54,114 175,311 4.6% 1.03 3,337 54,112 180,558 4.5% 1.01 3,437 54,108 185,953 4.3% 1.00 3,532 54,197 191,425 4.2% 0.98 3,629 54,285 196,972 4.2% 0.97 3,729 54,372 202,777 4.1% 0.96 3,832 54,458 208,662

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70.6%

D&T Gross Losses Consumpt (%) (GWh) 18.8% 154,933 18.6% 161,007 18.4% 163,290 17.9% 166,203 17.3% 169,071 16.7% 172,234 15.9% 175,383 15.2% 178,721 14.4% 182,248 13.6% 186,027 12.9% 189,956 12.4% 194,408 12.0% 199,158 11.7% 204,487 11.6% 210,389 11.5% 216,377 11.4% 222,436 11.4% 228,805 11.3% 235,201

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Figure A6.0.8: Comparison with other Forecasts

Case 2 PwC

Case 1 PwC

Case 3 PwC

Gross Consumption (GWh)

300,000 250,000 200,000 150,000 100,000 50,000

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC, governments, utilities Case 2 Case 1 GWh 2000 2001 2002 154,933 154,933 2003 161,007 161,007 2004 163,290 160,535 2005 166,203 160,613 2006 169,071 160,687 2007 172,234 161,110 2008 175,383 161,575 2009 178,721 162,402 2010 182,248 163,451 2011 186,027 164,878 2012 189,956 166,803 2013 194,408 169,428 2014 199,158 172,305 2015 204,487 175,714 2016 210,389 179,794 2017 216,377 184,603 2018 222,436 189,709 2019 228,805 195,144 2020 235,201 200,839 Source: PwC, governments, utilities 31 December 2004

Case 3

154,933 161,007 163,879 167,510 171,458 176,112 180,720 185,644 190,896 196,504 202,370 209,069 215,864 223,591 232,087 240,808 249,741 259,163 268,758

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4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -

GWh

2018

2015

2012

2009

2006

2003

2000

Source: PwC

kWh/cap ytd growth yoy growth 2000 kWh/cap yoy growth 2001 2002 2,350 2003 2,443 0.0% 4.0% 5% 2004 2,481 1.5% 1.5% 4% 2005 2,537 3.8% 2.3% 4% 2006 2,597 6.3% 2.4% 3% 2007 2,664 9.0% 2.6% 2008 2,734 11.9% 2.6% 3% 2009 2,809 15.0% 2.7% 2% 2010 2,890 18.3% 2.9% 2% 2011 2,974 21.7% 2.9% 1% 2012 3,060 25.2% 2.9% 1% 2013 3,147 28.8% 2.9% 0% 2014 3,240 32.6% 2.9% 2015 3,337 36.6% 3.0% 2016 3,437 40.7% 3.0% 2017 3,532 44.6% 2.8% 2018 3,629 48.5% 2.7% 2019 3,729 52.6% 2.8% 2020 3,832 56.8% 2.7% Source: PwC Figure A6.0.10: Forecast Final Net Demand Annual Growth

Final demand kWh/capita

Figure A6.0.9: Forecast Final Demand per Capita

yoy growth 5% 4% 4% 3% 3% 2% 2% 1% 1% 0%

200,000 150,000 100,000 50,000

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

2000

-

Annual Growth

Final Demand (GWh)

250,000

GWh ytd growth yoy growth 2000 2001 2002 125,864 2003 131,054 0.0% 4.1% 2004 133,209 1.6% 1.6% 2005 136,448 4.1% 2.4% 2006 139,815 6.7% 2.5% 2007 143,543 9.5% 2.7% 2008 147,420 12.5% 2.7% 2009 151,599 15.7% 2.8% 2010 156,027 19.1% 2.9% 2011 160,664 22.6% 3.0% 2012 165,433 26.2% 3.0% 2013 170,318 30.0% 3.0% 2014 175,311 33.8% 2.9% 2015 180,558 37.8% 3.0% 2016 185,953 41.9% 3.0% 2017 191,425 46.1% 2.9% 2018 196,972 50.3% 2.9% 2019 202,777 54.7% 2.9% 2020 208,662 59.2% 2.9% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.0.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

11% 10% 10% 9% 9% 8% 8% 7% 7% 6% Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: PwC

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 2001 2002 2003 10.0% 9.4% 9.2% 8.1% 7.1% 7.1% 7.3% 7.2% 7.0% 8.3% 8.9% 2004 10.0% 9.4% 9.2% 8.1% 7.1% 7.1% 7.4% 7.3% 7.0% 8.3% 8.9% 2005 9.9% 9.4% 9.2% 8.1% 7.1% 7.2% 7.5% 7.4% 7.1% 8.3% 8.8% 2006 9.8% 9.4% 9.2% 8.1% 7.1% 7.3% 7.6% 7.4% 7.1% 8.3% 8.8% 2007 9.8% 9.3% 9.2% 8.1% 7.1% 7.3% 7.7% 7.5% 7.1% 8.3% 8.7% 2008 9.7% 9.3% 9.2% 8.1% 7.1% 7.4% 7.8% 7.6% 7.1% 8.3% 8.7% 2009 9.7% 9.3% 9.2% 8.1% 7.2% 7.5% 7.8% 7.6% 7.1% 8.3% 8.6% 2010 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2011 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2012 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2013 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2014 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2015 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2016 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2017 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2018 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2019 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% 2020 9.6% 9.2% 9.1% 8.1% 7.2% 7.5% 7.9% 7.7% 7.1% 8.2% 8.6% Source: PwC 31 December 2004

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Dec 10.2% 10.1% 10.0% 10.0% 9.9% 9.8% 9.7% 9.7% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6%

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Figure A6.0.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001 2002 2003 2005 100.0% 98.4% 89.9% 91.1% 69.9% 73.6% 72.9% 71.1% 74.8% 88.8% 89.8% 97.4% 2010 100.0% 99.7% 92.0% 94.1% 72.5% 79.4% 79.2% 77.1% 78.1% 91.2% 90.1% 96.5% 2015 100.0% 99.9% 92.3% 94.5% 72.9% 79.9% 79.7% 77.6% 78.4% 91.5% 90.2% 96.7% 2020 99.8% 100.0% 92.5% 94.6% 73.4% 80.2% 80.1% 77.7% 78.8% 91.7% 90.5% 96.8% Source: PwC

31 December 2004

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.0.13: 3rd Wed January Daily Profiles

2003

40,000

2005

2010

2015

2020

35,000

Demand (MW)

30,000 25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 -

2003 20,280 19,331 18,713 18,341 18,521 19,056 20,768 22,653 23,583 23,855 23,724 23,788 23,480 23,418 23,034 22,803 23,225 24,364 24,973 24,962 24,228 23,302 22,662 21,517

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2005 22,327 21,204 20,528 20,308 20,489 21,659 23,688 25,016 25,526 25,543 25,145 24,766 24,179 23,743 23,282 23,487 25,228 26,492 26,643 26,235 25,674 25,251 24,007 22,938

2010 23,674 22,482 21,770 21,541 21,742 22,989 25,194 26,616 27,171 27,185 26,754 26,348 25,724 25,264 24,767 24,991 26,835 28,199 28,357 27,927 27,318 26,867 25,518 24,356

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 26,393 25,076 24,296 24,052 24,292 25,689 28,219 29,805 30,427 30,435 29,942 29,487 28,791 28,279 27,711 27,977 30,035 31,565 31,737 31,258 30,556 30,037 28,491 27,172

2020 30,095 28,613 27,751 27,495 27,801 29,392 32,439 34,247 34,956 34,955 34,368 33,843 33,051 32,477 31,806 32,159 34,505 36,239 36,423 35,882 35,040 34,392 32,550 31,007

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SEE Region Final Demand Forecast

Figure A6.0.14: 3rd Wed April Daily Profiles

2003

35,000

2005

2010

2015

2020

Demand (MW)

30,000 25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 -

2003 16,090 15,209 14,600 14,303 14,224 15,213 16,525 18,158 18,973 18,944 18,715 18,399 18,199 17,813 17,457 17,089 16,959 16,928 17,178 18,345 20,085 20,049 18,911 17,475

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2005 17,014 16,081 15,558 15,349 15,472 16,970 19,278 20,581 20,797 20,538 20,038 19,734 19,554 19,072 18,808 18,778 18,852 19,033 19,400 21,354 22,385 21,448 19,995 18,288

2010 18,654 17,624 17,046 16,813 16,952 18,614 21,182 22,612 22,837 22,535 21,976 21,635 21,436 20,909 20,626 20,605 20,695 20,906 21,313 23,456 24,599 23,566 21,961 20,068

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 20,948 19,797 19,154 18,893 19,069 20,944 23,876 25,479 25,712 25,349 24,703 24,311 24,082 23,496 23,175 23,168 23,276 23,521 23,980 26,385 27,674 26,484 24,672 22,539

2020 24,038 22,732 22,001 21,706 21,954 24,121 27,605 29,434 29,649 29,185 28,407 27,925 27,649 26,991 26,622 26,661 26,801 27,091 27,632 30,393 31,876 30,427 28,315 25,871

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SEE Region Final Demand Forecast

Figure A6.0.15: 3rd Wed Jul Daily Profiles

2003

35,000

2005

2010

2015

2020

Demand (MW)

30,000 25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 -

2003 14,570 13,506 13,153 12,903 12,905 13,217 14,236 15,556 16,717 17,330 17,526 17,569 17,925 17,752 17,051 16,971 16,343 16,214 16,095 16,478 17,003 17,412 17,087 15,701

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2005 15,141 14,287 13,734 13,522 13,687 14,502 15,831 17,338 18,169 18,278 18,455 18,569 18,433 18,279 18,126 17,927 17,735 17,607 17,548 17,877 18,852 19,789 18,792 16,526

2010 17,445 16,445 15,794 15,540 15,741 16,721 18,260 20,004 20,966 21,093 21,300 21,426 21,255 21,083 20,924 20,693 20,481 20,344 20,277 20,661 21,800 22,894 21,744 19,077

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 19,592 18,479 17,759 17,480 17,710 18,802 20,553 22,523 23,606 23,744 23,961 24,082 23,871 23,675 23,509 23,250 23,032 22,879 22,805 23,244 24,527 25,740 24,417 21,411

2020 22,548 21,299 20,494 20,193 20,466 21,717 23,774 26,056 27,295 27,430 27,644 27,726 27,432 27,202 27,046 26,755 26,549 26,382 26,303 26,824 28,321 29,676 28,067 24,589

PwC Consortium

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Figure A6.0.16: 3rd Wed Oct Daily Profiles

2003

30,000

2005

2010

2015

2020

Demand (MW)

25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 -

2003 15,878 15,068 14,637 14,289 14,476 15,151 17,032 18,676 19,072 19,422 19,427 19,589 19,413 19,053 18,706 18,273 18,274 18,770 20,299 21,451 20,958 19,696 18,415 17,202

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2005 14,996 14,364 13,900 13,781 14,091 15,616 18,020 19,533 19,906 19,758 19,537 19,216 19,142 18,846 18,651 18,680 18,993 19,883 21,816 22,175 21,344 20,139 18,644 16,602

2010 15,412 14,756 14,281 14,156 14,474 16,050 18,529 20,099 20,492 20,336 20,106 19,774 19,695 19,393 19,207 19,236 19,573 20,488 22,477 22,845 21,990 20,752 19,210 17,087

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 16,804 16,084 15,566 15,434 15,782 17,513 20,247 21,981 22,410 22,224 21,955 21,579 21,481 21,148 20,947 20,981 21,373 22,380 24,557 24,979 24,047 22,682 20,984 18,645

2020 18,874 18,069 17,498 17,359 17,759 19,711 22,810 24,755 25,222 24,993 24,667 24,221 24,097 23,721 23,488 23,535 23,990 25,140 27,585 28,077 27,030 25,479 23,556 20,921

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Figure A6.0.17: Peak Hourly Demand Daily Profiles

1/13/03

40,000

1/14/05

1/14/10

1/14/15

2/19/20

35,000

Demand (MW)

30,000 25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

1/0/00 -

1/0/00 -

1/13/03 20,735 19,827 19,276 19,048 19,051 19,906 21,917 23,797 24,861 25,376 25,429 25,308 24,838 24,578 24,263 24,047 25,020 26,374 26,629 26,582 25,992 25,335 24,522 23,176

Page 15 of 160

1/14/05 21,245 20,385 19,778 19,686 19,900 21,301 23,574 25,063 25,940 26,393 26,235 25,868 25,503 25,165 24,877 25,068 26,639 27,823 27,882 27,562 26,846 26,510 25,028 22,728

1/14/10 22,504 21,592 20,954 20,862 21,103 22,606 25,053 26,650 27,590 28,078 27,901 27,511 27,121 26,763 26,454 26,652 28,310 29,590 29,649 29,313 28,551 28,195 26,572 24,111

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

1/14/15 25,057 24,054 23,356 23,265 23,553 25,257 28,039 29,822 30,873 31,415 31,202 30,769 30,331 29,933 29,580 29,801 31,643 33,087 33,151 32,779 31,923 31,512 29,635 26,860

2/19/20 30,023 28,698 27,943 27,764 28,079 29,874 33,457 35,673 36,591 36,304 35,897 35,293 34,351 33,964 33,499 33,793 34,816 37,104 38,049 37,744 36,747 36,121 34,445 31,916

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Figure A6.0.18: Minimum Hourly Demand Daily Profiles

5/5/03

30,000

5/6/05

5/6/10

5/6/15

5/4/20

Demand (MW)

25,000 20,000 15,000 10,000 5,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

1/0/00 -

1/0/00 -

5/5/03 12,430 11,571 11,063 10,934 11,248 11,850 13,488 15,081 15,901 16,135 16,300 16,292 16,407 16,277 15,945 15,610 15,386 15,196 15,149 15,582 17,116 17,898 16,901 15,171

Page 16 of 160

5/6/05 13,072 12,193 11,787 11,878 12,071 13,171 15,043 16,582 16,978 17,029 16,920 17,041 16,968 16,705 16,289 16,335 16,305 16,257 16,312 17,163 19,129 18,785 17,422 14,737

5/6/10 14,381 13,410 12,960 13,060 13,273 14,507 16,585 18,278 18,711 18,758 18,625 18,754 18,669 18,374 17,923 17,978 17,956 17,914 17,985 18,937 21,097 20,702 19,194 16,227

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/6/15 16,143 15,065 14,568 14,677 14,926 16,327 18,693 20,596 21,076 21,116 20,945 21,083 20,990 20,649 20,146 20,210 20,196 20,161 20,245 21,321 23,737 23,259 21,555 18,202

5/4/20 18,721 17,747 17,120 16,811 16,852 17,190 18,261 19,723 20,891 21,614 21,660 21,635 21,508 20,894 20,268 20,054 20,121 20,219 20,620 22,151 25,235 25,044 22,893 20,369

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7

Appendix 6.1 Albania Demand Forecasting

31 December 2004

Page 17 of 160

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1. Historical Trend Analysis The data for Albania was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.1.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 285 281 566 2,855 19.8% 1992 323 309 631 2,746 23.0% 1993 357 405 761 3,269 23.3% 1994 452 479 932 3,682 25.3% 1995 568 552 1,120 4,285 26.1% 1996 665 492 1,157 4,839 23.9% 1997 739 527 1,266 5,028 25.2% 1998 769 601 1,370 5,423 25.3% 1999 720 686 1,406 5,713 24.6% 2000 710 698 1,408 5,710 24.7% 2001 675 664 1,339 5,432 24.7% 2002 5,439 3,129 1,000 2003 5,893 3,163 1,104 Sources: (1) KESH. Demand incl non-tech loss & shed load (2) Albania Statistics Office (1) Net Demand GWh 2,765 2,289 2,115 2,508 2,750 3,165 3,682 3,762 4,053 4,307 4,302 4,093

Gross

Net

7,000

Consumption GWh

6,000 5,000 4,000 3,000 2,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1,000

Sources: (1) KESH

31 December 2004

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Figure A6.1.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1991 362 1992 575 1993 848 1994 809 1995 867 1996 1,333 1997 1,158 1998 1,213 1999 1,278 2000 1,322 2001 1,258 2002 2003 Sources: (1) KESH

Industry Demand GWh 506 431 495 441 578 667 941 1,070 1,136 1,175 1,118 -

Other Demand GWh 1,301 647 565 588 578 750 579 571 710 734 699 -

Total Net Demand GWh 2,765 2,289 2,115 2,508 2,750 3,165 3,682 3,762 4,053 4,307 4,302 4,093 -

Domestic

Domestic Demand Growth

Industry Demand Growth

37.2% 32.2% -4.9% 6.8% 34.9% -15.2% 4.6% 5.1% 3.3% -5.1% -

Industry

-17.3% 12.8% -12.1% 23.7% 13.3% 29.1% 12.1% 5.8% 3.3% -5.1% -

Other Demand Growth -101.1% -14.5% 3.9% -1.7% 22.9% -29.6% -1.4% 19.6% 3.3% -5.1% -

Total Net Demand Growth -20.8% -8.2% 15.7% 8.8% 13.1% 14.0% 2.1% 7.2% 5.9% -0.1% -5.1% -

Other

3,500

Consumption GWh

3,000 2,500 2,000 1,500 1,000 500

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Sources: (1) KESH

31 December 2004

Page 19 of 160

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Figure A6.1.3: Historical System Load Factor Gross Demand GWh 1990 1991 2,855 1992 2,746 1993 3,269 1994 3,682 1995 4,285 1996 4,839 1997 5,028 1998 5,423 1999 5,713 2000 5,710 2001 5,432 2002 5,439 2003 5,893 Sources: (1) KESH

Auxilliary Demand GWh -

Pumping Demand GWh -

Gross Consump GWh 2,855 2,746 3,269 3,682 4,285 4,839 5,028 5,423 5,713 5,710 5,432 5,439 5,893

Gross Consmp Growth 0.0% -3.8% 19.0% 12.6% 16.4% 12.9% 3.9% 7.9% 5.3% -0.1% -4.9% 0.1% 8.3%

System Peak MW 580 660 740 800 920 940 1,000 1,150 1,180 1,200 1,210 1,231 1,257

System Peak Growth

-0.038039 0.190322 0.126212 0.163865 0.129288 0.039058 0.07856 0.053476 -0.000525 -0.048687 0.001289 0.083471

0.137931 0.121212 0.081081 0.15 0.021739 0.06383 0.15 0.026087 0.016949 0.008333 0.017355 0.021121

0.0% 13.8% 12.1% 8.1% 15.0% 2.2% 6.4% 15.0% 2.6% 1.7% 0.8% 1.7% 2.1%

System Load Factor 56.2% 47.5% 50.4% 52.5% 53.2% 58.8% 57.4% 53.8% 55.3% 54.3% 51.2% 50.4% 53.5%

60% 58%

48% 46% 44% 42%

31 December 2004

Page 20 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

50%

2002

52%

2001

54%

2000

System Load Factor

56%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.1.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 6.0% 6.0% 6.0% 2002 5.0% 5.0% 5.0% Case 1 Case 3 Case 2 2003 6.0% 6.0% 6.0% 2004 3.8% 5.9% 6.8% 2005 3.8% 5.9% 6.8% 8% 2006 3.2% 5.3% 6.2% 7% 2007 3.2% 5.3% 6.2% 6% 2008 3.2% 5.3% 6.2% 2009 3.2% 5.3% 6.2% 5% 2010 3.2% 5.3% 6.2% 4% 2011 2.3% 4.4% 5.3% 3% 2012 2.3% 4.4% 5.3% 2% 2013 2.3% 4.4% 5.3% 2014 2.3% 4.4% 5.3% 1% 2015 2.3% 4.4% 5.3% 0% 2016 3.0% 5.1% 6.0% 2017 3.0% 5.1% 6.0% 2018 3.0% 5.1% 6.0% Sources: National Strategy of Energy [28] 2019 3.0% 5.1% 6.0% 2020 3.0% 5.1% 6.0% Sources: National Strategy of Energy [28] Figure A6.1.5: Forecast Population

yoy growth

4,500

1.20%

4,000

1.00%

3,500 3,000

0.80%

2,500

0.60%

2,000 1,500

0.40%

1,000

0.20%

500

31 December 2004

2020

2018

2016

2014

Source: National Strategy of

2012

2010

2008

2006

2004

2002

0.00% 2000

-

Pop ('000) ytd growth yoy growth 2000 2001 2002 3,129 2003 3,163 0.0% 1.10% 2004 3,198 1.1% 1.10% 2005 3,233 2.2% 1.10% 2006 3,269 3.3% 1.10% 2007 3,305 4.5% 1.10% 2008 3,341 5.6% 1.10% 2009 3,378 6.8% 1.10% 2010 3,415 8.0% 1.10% 2011 3,453 9.1% 1.10% 2012 3,491 10.3% 1.10% 2013 3,529 11.6% 1.10% 2014 3,568 12.8% 1.10% 2015 3,607 14.0% 1.10% 2016 3,647 15.3% 1.10% 2017 3,687 16.6% 1.10% 2018 3,728 17.8% 1.10% 2019 3,769 19.1% 1.10% 2020 3,810 20.4% 1.10% Source: National Strategy of Energy [28]

Page 21 of 160

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

12,000

4,000 2,000 2006

2003

0

Source: PwC

GDP per Capita (95 US$) 2002 1,090 2003 1,155 2004 1,224 2005 1,296 2006 1,365 2007 1,436 2008 1,512 2009 1,592 2010 1,676 2011 1,749 2012 1,825 2013 1,905 2014 1,988 2015 2,074 2016 2,179 2017 2,290 2018 2,406 2019 2,528 2020 2,656 Source: PwC Year

31 December 2004

LF% 51.5% 51.5%

53.9%

53.9%

2018

6,000

2015

8,000

2012

10,000

2009

System Peak Demand

Gross Consumption GWh

14,000

Figure A6.1.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 6,409 1,420 GWh MW 2004 6,539 2005 6,695 1,484 2006 6,872 3000 2007 7,071 2500 2008 7,292 2009 7,536 2000 2010 7,802 1,652 2011 8,085 1500 2012 8,384 1000 2013 8,701 2014 9,037 500 2015 9,391 1,989 2016 9,919 0 2017 10,490 2018 11,107 2019 11,772 2020 12,490 2,645 Source: PwC Figure A6.1.7: Case 2 Economic Model Forecast Calculation Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 5.0% 0.92 1,000 3,129 4,754 6.0% 0.96 1,104 3,163 4,862 5.9% 0.93 1,139 3,198 5,010 5.9% 0.91 1,181 3,233 5,181 5.3% 0.90 1,228 3,269 5,372 5.3% 0.89 1,280 3,305 5,584 5.3% 0.88 1,336 3,341 5,817 5.3% 0.88 1,399 3,378 6,074 5.3% 0.88 1,466 3,415 6,355 4.4% 0.88 1,538 3,453 6,655 4.4% 0.88 1,614 3,491 6,976 4.4% 0.89 1,694 3,529 7,318 4.4% 0.89 1,778 3,568 7,683 4.4% 0.90 1,868 3,607 8,073 5.1% 0.90 1,964 3,647 8,527 5.1% 0.90 2,066 3,687 9,018 5.1% 0.90 2,177 3,728 9,548 5.1% 0.91 2,295 3,769 10,120 5.1% 0.91 2,421 3,810 10,737

Page 22 of 160

53.9%

D&T Gross Losses Consumpt (%) (GWh) 23.3% 6,196 24.1% 6,409 23.4% 6,539 22.6% 6,695 21.8% 6,872 21.0% 7,071 20.2% 7,292 19.4% 7,536 18.5% 7,802 17.7% 8,085 16.8% 8,384 15.9% 8,701 15.0% 9,037 14.0% 9,391 14.0% 9,919 14.0% 10,490 14.0% 11,107 14.0% 11,772 14.0% 12,490

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Figure A6.1.8: Comparison with other Forecasts

Case 2 PwC KESH Base

Case 1 PwC KESH Scenario

Case 3 PwC KESH

Gross Consumption (GWh)

16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, KESH 2003 & 2001 Case 2 Case 1 Case 3 GWh 2000 2001 2002 6,196 6,196 6,196 2003 6,409 6,409 6,409 2004 6,539 6,439 6,584 2005 6,695 6,488 6,788 2006 6,872 6,552 7,020 2007 7,071 6,627 7,279 2008 7,292 6,715 7,566 2009 7,536 6,815 7,883 2010 7,802 6,926 8,230 2011 8,085 7,041 8,603 2012 8,384 7,161 9,002 2013 8,701 7,286 9,428 2014 9,037 7,415 9,883 2015 9,391 7,549 10,369 2016 9,919 7,799 11,065 2017 10,490 8,065 11,824 2018 11,107 8,347 12,651 2019 11,772 8,647 13,551 2020 12,490 8,964 14,530 Source: PwC 2004, KESH 2003 & 2001 31 December 2004

Page 23 of 160

KESH 5,458 6,144 6,216 6,309 6,407 6,771 7,131 7,418 7,710 8,007 8,311 8,614 8,921 9,230 9,534

KESH 5,407 6,546 6,867 6,867 7,560 7,868 8,133 8,399 8,660 8,918 9,210 9,499 9,789 10,081 10,369

KESH

5,895 6,013 6,133 6,256 6,381 6,509 6,639 6,772 6,907 7,045 7,186 7,330 7,476 7,626 7,778 7,934 8,093 8,254

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Figure A6.1.9: Forecast Final Demand per Capita

2,500

yoy growth

12,000

7%

10,000

6% 5%

8,000

4%

6,000

3%

4,000

2%

2,000

1%

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

0% 2000

-

Annual Growth

Final Demand (GWh)

GWh

2018

Source: PwC

2000

-

2015

500

2012

1,000

2009

1,500

2006

2,000

2003

Annual Growth

Final demand kWh/capita

3,000

kWh/cap ytd growth yoy growth 2000 kWh/cap yoy growth 2001 2002 1,000 2003 1,104 0.0% 10.3% 12% 2004 1,139 3.2% 3.2% 2005 1,181 7.0% 3.7% 10% 2006 1,228 11.2% 4.0% 8% 2007 1,280 15.9% 4.2% 2008 1,336 21.1% 4.4% 6% 2009 1,399 26.7% 4.7% 2010 1,466 32.8% 4.8% 4% 2011 1,538 39.3% 4.9% 2012 1,614 46.2% 4.9% 2% 2013 1,694 53.4% 5.0% 0% 2014 1,778 61.1% 5.0% 2015 1,868 69.2% 5.0% 2016 1,964 77.9% 5.1% 2017 2,066 87.2% 5.2% 2018 2,177 97.2% 5.3% 2019 2,295 107.9% 5.4% 2020 2,421 119.3% 5.5% Source: PwC Figure A6.1.10: Forecast Final Net Demand GWh ytd growth yoy growth 2000 2001 2002 4,754 2003 4,862 0.0% 2.3% 2004 5,010 3.0% 3.0% 2005 5,181 6.6% 3.4% 2006 5,372 10.5% 3.7% 2007 5,584 14.8% 3.9% 2008 5,817 19.6% 4.2% 2009 6,074 24.9% 4.4% 2010 6,355 30.7% 4.6% 2011 6,655 36.9% 4.7% 2012 6,976 43.5% 4.8% 2013 7,318 50.5% 4.9% 2014 7,683 58.0% 5.0% 2015 8,073 66.0% 5.1% 2016 8,527 75.4% 5.6% 2017 9,018 85.5% 5.8% 2018 9,548 96.4% 5.9% 2019 10,120 108.1% 6.0% 2020 10,737 120.8% 6.1% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.1.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

13% 12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 11.9% 11.1% 11.3% 8.6% 7.6% 7.2% 7.4% 6.8% 6.9% 7.1% 7.0% 2001 10.1% 9.1% 9.7% 9.2% 8.0% 7.7% 7.3% 7.0% 6.7% 7.0% 7.7% 2002 9.0% 7.8% 8.2% 8.2% 7.5% 7.6% 7.5% 7.5% 7.6% 8.8% 9.4% 2003 9.8% 8.9% 9.1% 8.5% 7.6% 7.4% 7.3% 7.2% 7.1% 7.9% 8.6% 2004 9.8% 8.9% 9.1% 8.5% 7.6% 7.4% 7.3% 7.2% 7.1% 7.9% 8.6% 2005 9.8% 8.9% 9.1% 8.5% 7.6% 7.4% 7.3% 7.2% 7.1% 7.9% 8.6% 2006 9.8% 8.9% 9.1% 8.5% 7.6% 7.4% 7.3% 7.2% 7.1% 7.9% 8.6% 2007 9.8% 8.9% 9.1% 8.5% 7.6% 7.4% 7.3% 7.2% 7.1% 7.9% 8.6% 2008 9.7% 8.8% 9.0% 8.5% 7.6% 7.5% 7.5% 7.3% 7.1% 7.9% 8.5% 2009 9.6% 8.7% 9.0% 8.5% 7.6% 7.6% 7.6% 7.5% 7.1% 7.9% 8.4% 2010 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2011 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2012 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2013 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2014 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2015 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2016 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2017 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2018 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2019 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% 2020 9.5% 8.7% 9.0% 8.5% 7.6% 7.8% 7.8% 7.6% 7.1% 7.9% 8.3% Source: PwC 31 December 2004

Page 25 of 160

Dec

Dec 7.1% 10.6% 11.0% 10.6% 10.6% 10.6% 10.6% 10.6% 10.5% 10.3% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2%

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Figure A6.1.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 100.0% 98.2% 96.8% 90.7% 78.5% 71.2% 71.1% 72.7% 72.7% 85.3% 91.0% 2001 2002 100.0% 89.8% 93.7% 89.2% 76.7% 86.9% 72.4% 78.6% 86.0% 89.9% 95.0% 2003 94.2% 99.7% 96.8% 92.8% 82.0% 74.5% 72.7% 81.7% 90.0% 94.6% 97.1% 2005 85.0% 87.6% 91.0% 93.0% 82.1% 76.7% 71.8% 79.0% 88.2% 89.9% 92.1% 2010 85.9% 89.9% 94.4% 97.6% 86.7% 84.5% 80.0% 87.6% 93.3% 93.7% 93.3% 2015 86.1% 89.8% 94.5% 98.0% 86.2% 84.4% 79.9% 87.3% 93.0% 93.6% 93.3% 2020 86.0% 89.8% 94.5% 98.0% 86.2% 84.4% 79.9% 87.3% 93.0% 93.6% 93.3% Source: PwC

31 December 2004

Page 26 of 160

Dec 99.0% 99.1% 100.0% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.1.13: 3rd Wed January Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 648 630 630 630 732 759 964 1,088 1,072 1,057 1,079 1,082 1,089 1,095 1,099 1,100 1,137 1,140 1,207 1,151 1,132 1,116 916 782

31 December 2004

2001 -

2002 324 318 323 306 405 707 992 624 151 149 152 175 174 164 194 234 553 1,022 1,131 1,102 1,091 1,154 774 423

2003 650 620 623 619 659 680 1,018 1,061 1,048 967 862 854 757 760 759 936 1,115 1,111 1,148 1,129 1,104 1,050 826 664

Page 27 of 160

2005 693 661 664 660 702 725 1,085 1,131 1,117 1,030 918 910 807 810 809 997 1,188 1,184 1,223 1,203 1,176 1,119 880 708

2010 779 743 747 742 790 815 1,220 1,272 1,256 1,159 1,033 1,024 907 911 910 1,122 1,336 1,332 1,376 1,353 1,323 1,259 990 796

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 940 897 901 895 953 983 1,472 1,535 1,516 1,399 1,247 1,235 1,095 1,099 1,098 1,354 1,613 1,607 1,660 1,633 1,597 1,519 1,195 960

2020 1,249 1,192 1,198 1,190 1,267 1,307 1,957 2,040 2,015 1,859 1,657 1,642 1,455 1,461 1,459 1,799 2,143 2,136 2,207 2,170 2,122 2,018 1,588 1,276

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Figure A6.1.14: 3rd Wed April Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 346 341 335 325 330 592 853 864 816 813 793 762 713 711 672 655 655 656 736 783 868 720 651 365

31 December 2004

2001 -

2002 405 394 383 375 395 558 833 890 776 689 646 674 691 626 662 673 700 773 805 983 990 913 663 505

2003 446 400 360 345 387 604 986 954 759 607 526 406 364 382 448 589 712 813 924 1,003 1,013 854 684 544

Page 28 of 160

2005 527 473 426 408 458 714 1,166 1,128 898 718 622 480 430 452 530 696 842 961 1,093 1,186 1,198 1,010 809 643

2010 616 553 498 477 535 835 1,363 1,318 1,049 839 727 561 503 528 619 814 984 1,124 1,277 1,386 1,400 1,180 945 752

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 745 668 601 576 646 1,009 1,647 1,593 1,268 1,014 878 678 608 638 748 984 1,189 1,358 1,543 1,675 1,692 1,426 1,142 908

2020 991 889 800 767 860 1,342 2,191 2,120 1,687 1,349 1,169 902 809 849 996 1,309 1,582 1,807 2,053 2,229 2,251 1,898 1,520 1,209

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Figure A6.1.15: 3rd Wed Jul Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 322 322 322 322 371 534 633 733 695 688 688 680 679 633 630 611 603 622 650 713 738 645 440 330

31 December 2004

2001 -

2002 426 393 383 391 405 534 690 675 579 520 525 531 566 572 569 396 407 474 550 660 874 870 658 424

2003 373 369 362 358 415 585 701 754 761 690 644 505 355 359 471 482 576 652 683 750 872 846 651 394

Page 29 of 160

2005 435 430 422 417 484 682 817 879 887 804 751 589 414 418 549 562 671 760 796 874 1,016 986 759 459

2010 539 533 523 517 600 845 1,013 1,090 1,100 997 931 730 513 519 681 696 832 942 987 1,084 1,260 1,222 941 569

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 649 642 629 623 722 1,017 1,219 1,311 1,323 1,200 1,120 878 617 624 819 838 1,002 1,134 1,188 1,304 1,516 1,471 1,132 685

2020 862 853 837 828 960 1,353 1,621 1,743 1,760 1,595 1,489 1,168 821 830 1,089 1,114 1,332 1,508 1,579 1,734 2,016 1,956 1,505 911

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Figure A6.1.16: 3rd Wed Oct Daily Profiles

2003

1,800

2005

2010

2015

2020

1,600

Demand (MW)

1,400 1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 326 286 277 267 286 506 795 836 568 472 580 609 680 660 559 550 570 770 910 863 769 666 427 357

31 December 2004

2001 -

2002 412 399 392 399 410 550 840 974 836 684 645 476 365 395 330 525 671 826 1,034 979 916 773 548 455

2003 390 362 361 366 408 566 832 981 947 774 604 434 315 305 317 403 703 906 951 1,017 991 891 671 446

Page 30 of 160

2005 419 389 388 393 438 608 894 1,054 1,018 832 649 466 338 328 341 433 755 973 1,022 1,093 1,065 957 721 479

2010 438 406 405 411 458 635 934 1,101 1,063 869 678 487 354 342 356 452 789 1,017 1,068 1,142 1,113 1,000 753 501

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 508 471 470 477 531 737 1,083 1,277 1,233 1,008 786 565 410 397 413 525 915 1,180 1,238 1,324 1,290 1,160 874 581

2020 611 567 565 573 639 886 1,303 1,536 1,483 1,212 946 680 493 478 496 631 1,101 1,419 1,489 1,593 1,552 1,395 1,051 698

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Figure A6.1.17: Peak Hourly Demand Daily Profiles

12/31/03

3,000

12/31/05

12/31/10

12/31/15

12/30/20

Demand (MW)

2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/22/00 648 630 630 630 732 759 964 1,088 1,072 1,057 1,079 1,082 1,089 1,095 1,099 1,100 1,137 1,140 1,207 1,151 1,132 1,116 916 782

31 December 2004

1/0/00 -

1/8/02 529 468 474 464 620 873 1,085 981 630 448 470 372 458 522 562 708 1,062 1,209 1,214 1,231 1,206 1,188 1,000 461

12/31/03 630 598 575 568 590 804 990 1,063 827 909 933 1,015 1,165 1,121 1,170 1,220 1,247 1,252 1,257 1,251 1,217 1,193 1,143 1,062

Page 31 of 160

12/31/05 744 706 679 671 697 949 1,169 1,255 977 1,073 1,102 1,199 1,376 1,324 1,382 1,441 1,472 1,478 1,484 1,477 1,437 1,409 1,350 1,254

12/31/10 828 786 756 746 775 1,056 1,301 1,397 1,087 1,194 1,226 1,334 1,531 1,473 1,537 1,603 1,639 1,645 1,652 1,644 1,599 1,568 1,502 1,396

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/31/15 997 946 910 899 934 1,272 1,567 1,682 1,309 1,439 1,477 1,606 1,844 1,774 1,852 1,931 1,974 1,982 1,989 1,980 1,926 1,888 1,809 1,681

12/30/20 1,326 1,258 1,210 1,195 1,242 1,692 2,083 2,237 1,740 1,913 1,963 2,136 2,451 2,359 2,462 2,567 2,624 2,635 2,645 2,632 2,561 2,510 2,405 2,235

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Figure A6.1.18: Minimum Hourly Demand Daily Profiles

1/11/03

3,000

12/21/05

12/21/10

12/21/15

12/20/20

Demand (MW)

2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

11/16/00 233 203 208 193 343 587 846 666 407 325 467 421 453 558 834 828 742 833 940 937 856 706 527 356

31 December 2004

1/0/00 -

1/16/02 305 286 270 272 382 578 1,006 332 240 166 178 201 213 196 217 265 497 1,105 1,116 1,161 1,131 1,093 691 300

1/11/03 595 591 585 601 698 854 1,158 1,157 1,096 1,003 456 295 240 293 722 1,062 1,112 1,063 1,035 1,086 1,225 1,219 968 697

Page 32 of 160

12/21/05 703 698 691 710 824 1,008 1,367 1,366 1,294 1,184 538 348 283 346 853 1,254 1,313 1,255 1,222 1,282 1,447 1,439 1,143 823

12/21/10 782 777 769 790 917 1,122 1,522 1,520 1,440 1,318 599 388 315 385 949 1,396 1,461 1,397 1,360 1,427 1,610 1,602 1,272 916

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/21/15 942 935 926 951 1,105 1,352 1,833 1,831 1,735 1,587 722 467 380 464 1,143 1,681 1,760 1,682 1,638 1,719 1,939 1,929 1,532 1,103

12/20/20 1,252 1,244 1,231 1,265 1,469 1,797 2,437 2,435 2,306 2,111 960 621 505 617 1,519 2,235 2,340 2,237 2,178 2,285 2,578 2,565 2,037 1,467

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9

Appendix 6.2 BiH Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for BiH was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.2.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 4,424 1991 4,449 1992 4,427 1993 4,152 1994 3,867 155 385 540 4,407 12.3% 3,704 1,044 1995 3,939 244 506 750 4,689 16.0% 3,356 1,174 1996 4,726 312 720 1,032 5,758 17.9% 3,247 1,455 1997 5,527 283 1,099 1,382 6,909 20.0% 3,335 1,658 1998 6,303 299 1,481 1,780 8,083 22.0% 3,502 1,800 1999 6,631 324 1,985 2,309 8,940 25.8% 3,690 1,797 2000 6,740 308 2,283 2,591 9,331 27.8% 3,836 1,757 2001 7,243 293 2,268 2,561 9,804 26.1% 3,922 1,847 2002 7,710 268 1,534 1,802 9,512 18.9% 3,964 1,945 2003 8,213 295 1,534 1,829 10,043 18.2% 3,989 2,059 Sources: (1) ZEKC/EPHZHB, EPBIH, ERS (2) US Census Bureau (1) Net Demand GWh

Gross

Net

12,000 11,000

Consumption GWh

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

2,000

Sources: (1) ZEKC/EPHZHB, EPBIH, ERS

31 December 2004

Page 34 of 160

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Figure A6.2.2: Historical Sectoral Electricity Demand Domestic Industry Other Demand Demand Demand GWh GWh GWh 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Sources: (1) ZEKC/EPHZHB, EPBIH, ERS

Total Net Demand GWh 3,867 3,939 4,726 5,527 6,303 6,631 6,740 7,243 7,710 8,213

Domestic

Domestic Demand Growth

Industry Demand Growth

-

Industry

Other Demand Growth -

Total Net Demand Growth -

1.8% 16.6% 14.5% 12.3% 4.9% 1.6% 6.9% 6.1% 6.1%

Other

1 1

Consumption GWh

1 1 1 1 0 0 0 0 2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Sources: (1) ZEKC/EPHZHB, EPBIH, ERS

31 December 2004

Page 35 of 160

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Figure A6.2.3: Historical System Load Factor Gross Auxilliary Pumping Demand Demand Demand GWh GWh GWh 1990 1991 1992 1993 1994 4,407 1995 4,689 1996 5,758 1997 6,909 1998 8,083 1999 8,940 2000 9,331 2001 9,804 2002 9,512 2003 10,043 Sources: (1) ZEKC/EPHZHB, EPBIH, ERS

Gross Consump GWh 4,407 4,689 5,758 6,909 8,083 8,940 9,331 9,804 9,512 10,043

Gross Consmp Growth 0.0% 0.0% 0.0% 0.0% 6.4% 22.8% 20.0% 17.0% 10.6% 4.4% 5.1% -3.0% 5.6%

System Peak MW 1,502 1,838 1,854

System Peak Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 22.4% 0.9%

System Load Factor

74.5% 59.1% 61.8%

160%

120% 100%

31 December 2004

Page 36 of 160

2003

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2002

60%

0.064104 0.227876 0.199931 0.169904 0.106011 0.043736 0.050691 -0.029823 0.223702 0.055822 0.008705 2001

80%

2000

System Load Factor

140%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.2.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 4.5% 4.5% 4.5% 2002 3.8% 3.8% 3.8% Case 1 Case 3 Case 2 2003 3.5% 3.5% 3.5% 2004 3.8% 3.8% 3.8% 2005 4.0% 4.0% 4.0% 5% 2006 3.0% 4.0% 4.5% 5% 2007 3.0% 4.0% 4.5% 4% 2008 3.0% 4.0% 4.5% 4% 2009 3.0% 4.0% 4.5% 3% 2010 3.0% 4.0% 4.5% 3% 2011 3.0% 4.0% 4.5% 2% 2012 3.0% 4.0% 4.5% 2% 2013 3.0% 4.0% 4.5% 1% 2014 3.0% 4.0% 4.5% 1% 2015 3.0% 4.0% 4.5% 0% 2016 3.0% 4.0% 4.5% 2017 3.0% 4.0% 4.5% 2018 3.0% 4.0% 4.5% Sources: (1) PwC (2) PwC (3) PwC 2019 3.0% 4.0% 4.5% 2020 3.0% 4.0% 4.5% Sources: (1) PwC (2) PwC (3) PwC Figure A6.2.5: Forecast Population

yoy growth

4,300

2.50%

4,200

2.00%

4,100 4,000

1.50%

3,900

1.00%

3,800 0.50%

3,700

31 December 2004

2020

2018

2016

2014

Source: US Census Bureau

2012

2010

2008

2006

2004

2002

0.00% 2000

3,600

Pop ('000) ytd growth yoy growth 2000 3,836 2001 3,922 2.25% 2002 3,964 1.08% 2003 3,989 0.0% 0.62% 2004 4,008 0.5% 0.47% 2005 4,025 0.9% 0.45% 2006 4,043 1.3% 0.43% 2007 4,059 1.8% 0.41% 2008 4,075 2.1% 0.38% 2009 4,089 2.5% 0.36% 2010 4,103 2.9% 0.34% 2011 4,116 3.2% 0.32% 2012 4,129 3.5% 0.30% 2013 4,140 3.8% 0.27% 2014 4,150 4.0% 0.24% 2015 4,158 4.2% 0.20% 2016 4,165 4.4% 0.17% 2017 4,171 4.6% 0.14% 2018 4,176 4.7% 0.11% 2019 4,180 4.8% 0.09% 2020 4,182 4.8% 0.06% Source: US Census Bureau

Page 37 of 160

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18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

Figure A6.2.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 10,043 1,837 GWh MW 2004 10,224 2005 10,432 1,863 2006 10,668 3000 2007 10,929 2500 2008 11,217 2009 11,531 2000 2010 11,871 2,076 2011 12,149 1500 2012 12,520 1000 2013 12,916 2014 13,337 500 2015 13,783 2,410 2016 14,253 0 2017 14,750 2018 15,273 2019 15,825 2020 16,404 2,855 Source: PwC Figure A6.2.7: Case 2 Economic Model Forecast Calculation

Source: PwC

GDP per Capita (95 US$) 2002 1,655 2003 1,713 2004 1,778 2005 1,849 2006 1,923 2007 2,000 2008 2,080 2009 2,163 2010 2,250 2011 2,340 2012 2,433 2013 2,531 2014 2,632 2015 2,737 2016 2,847 2017 2,961 2018 3,079 2019 3,202 2020 3,330 Source: PwC Year

31 December 2004

LF% 62.4% 63.9%

65.3%

65.3%

2018

2015

2012

2009

2006

2003

System Peak Demand

Gross Consumption GWh

3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 3.8% 0.95 1,566 3,964 7,710 3.5% 0.98 1,683 3,989 8,213 3.8% 0.96 1,712 4,008 8,418 4.0% 0.94 1,747 4,025 8,649 4.0% 0.93 1,788 4,043 8,907 4.0% 0.92 1,835 4,059 9,192 4.0% 0.91 1,888 4,075 9,503 4.0% 0.90 1,946 4,089 9,842 4.0% 0.89 2,010 4,103 10,208 4.0% 0.89 2,079 4,116 10,520 4.0% 0.89 2,154 4,129 10,854 4.0% 0.88 2,234 4,140 11,211 4.0% 0.88 2,320 4,150 11,590 4.0% 0.88 2,412 4,158 11,991 4.0% 0.88 2,509 4,165 12,414 4.0% 0.88 2,613 4,171 12,861 4.0% 0.88 2,723 4,176 13,332 4.0% 0.89 2,839 4,180 13,829 4.0% 0.89 2,962 4,182 14,350

Page 38 of 160

65.6%

D&T Gross Losses Consumpt (%) (GWh) 18.9% 9,512 18.2% 10,043 17.7% 10,224 17.1% 10,432 16.5% 10,668 15.9% 10,929 15.3% 11,217 14.7% 11,531 14.0% 11,871 13.4% 12,149 13.3% 12,520 13.2% 12,916 13.1% 13,337 13.0% 13,783 12.9% 14,253 12.8% 14,750 12.7% 15,273 12.6% 15,825 12.5% 16,404

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Figure A6.2.8: Comparison with other Forecasts

Case 2 PwC KfW Low

Case 1 PwC KfW High

Case 3 PwC

Gross Consumption (GWh)

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, KfW 2002 [7] Case 2 Case 1 GWh 2000 9,331 2001 9,804 2002 9,512 2003 10,043 10,043 2004 10,224 10,169 2005 10,432 10,326 2006 10,668 10,502 2007 10,929 10,696 2008 11,217 10,908 2009 11,531 11,138 2010 11,871 11,384 2011 12,149 11,564 2012 12,520 11,826 2013 12,916 12,103 2014 13,337 12,394 2015 13,783 12,699 2016 14,253 13,017 2017 14,750 13,349 2018 15,273 13,696 2019 15,825 14,057 2020 16,404 14,431 Source: PwC 2004, KfW 2002 [7] 31 December 2004

Case 3

KfW Low

KfW High

9,804 10,098 10,351 10,558 10,716 10,850 10,958 11,041 11,123 11,207 11,291 11,376

9,804 10,294 10,757 11,188 11,579 11,956 12,314 12,653 13,001 13,358 13,726 14,103

10,043 10,251 10,486 10,752 11,048 11,376 11,734 12,124 12,454 12,885 13,347 13,841 14,365 14,923 15,514 16,141 16,804 17,506

Page 39 of 160

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Figure A6.2.9: Forecast Final Demand per Capita

3,000 2,500

yoy growth

16,000

8%

14,000

7%

12,000

6%

10,000

5%

8,000

4%

6,000

3%

4,000

2%

2,000

1%

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

0% 2000

-

Annual Growth

Final Demand (GWh)

GWh

2018

Source: PwC

2000

-

2015

500

2012

1,000

2009

1,500

2006

2,000

2003

Annual Growth

Final demand kWh/capita

3,500

kWh/cap ytd growth yoy growth 2000 1,366 kWh/cap yoy growth 2001 1,464 7.2% 2002 1,566 7.0% 2003 1,683 0.0% 7.4% 8% 2004 1,712 1.7% 1.7% 7% 2005 1,747 3.8% 2.1% 2006 1,788 6.3% 2.4% 6% 2007 1,835 9.1% 2.6% 5% 2008 1,888 12.2% 2.9% 4% 2009 1,946 15.7% 3.1% 3% 2010 2,010 19.4% 3.3% 2011 2,079 23.6% 3.4% 2% 2012 2,154 28.0% 3.6% 1% 2013 2,234 32.8% 3.7% 0% 2014 2,320 37.9% 3.8% 2015 2,412 43.3% 4.0% 2016 2,509 49.1% 4.0% 2017 2,613 55.3% 4.1% 2018 2,723 61.8% 4.2% 2019 2,839 68.7% 4.3% 2020 2,962 76.0% 4.3% Source: PwC Figure A6.2.10: Forecast Final Net Demand GWh ytd growth yoy growth 2000 6,740 2001 7,243 7.5% 2002 7,710 6.4% 2003 8,213 0.0% 6.5% 2004 8,418 2.5% 2.5% 2005 8,649 5.3% 2.7% 2006 8,907 8.4% 3.0% 2007 9,192 11.9% 3.2% 2008 9,503 15.7% 3.4% 2009 9,842 19.8% 3.6% 2010 10,208 24.3% 3.7% 2011 10,520 28.1% 3.1% 2012 10,854 32.2% 3.2% 2013 11,211 36.5% 3.3% 2014 11,590 41.1% 3.4% 2015 11,991 46.0% 3.5% 2016 12,414 51.2% 3.5% 2017 12,861 56.6% 3.6% 2018 13,332 62.3% 3.7% 2019 13,829 68.4% 3.7% 2020 14,350 74.7% 3.8% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.2.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

Jun

Jul

2010

2015

2020

11% 11% 10% 10% 9% 9% 8% 8% 7% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001 2002 10.6% 8.5% 8.6% 8.1% 7.2% 6.9% 7.5% 7.5% 7.4% 8.6% 8.8% 10.4% 2003 9.9% 9.3% 8.9% 7.9% 7.4% 7.2% 7.4% 7.5% 7.4% 8.4% 8.8% 10.0% 2004 9.8% 9.2% 8.9% 7.9% 7.4% 7.3% 7.5% 7.7% 7.4% 8.4% 8.7% 9.9% 2005 9.6% 9.1% 8.8% 7.9% 7.4% 7.4% 7.7% 7.8% 7.4% 8.4% 8.6% 9.7% 2006 9.5% 9.1% 8.8% 7.9% 7.4% 7.6% 7.8% 8.0% 7.4% 8.4% 8.5% 9.6% 2007 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2008 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2009 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2010 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2011 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2012 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2013 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2014 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2015 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2016 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2017 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2018 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2019 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% 2020 9.4% 9.0% 8.8% 7.9% 7.4% 7.7% 8.0% 8.1% 7.5% 8.4% 8.4% 9.4% Source: PwC 31 December 2004

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Figure A6.2.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001 2002 100.0% 87.2% 83.0% 79.4% 66.6% 64.2% 67.5% 67.1% 73.0% 79.8% 87.6% 96.0% 2003 100.0% 95.6% 86.2% 83.1% 69.5% 69.5% 68.2% 69.0% 74.1% 86.5% 87.3% 96.1% 2005 100.0% 96.7% 87.9% 85.4% 71.5% 73.8% 72.9% 73.5% 76.5% 88.6% 87.8% 95.6% 2010 100.0% 97.4% 89.3% 87.3% 73.2% 78.2% 77.4% 77.7% 78.6% 90.2% 87.3% 94.3% 2015 100.0% 97.0% 89.1% 87.6% 73.2% 77.5% 77.2% 77.6% 78.7% 89.8% 87.3% 94.6% 2020 100.0% 98.1% 89.6% 88.0% 73.5% 78.0% 77.8% 78.0% 79.1% 91.0% 88.2% 94.8% Source: PwC

31 December 2004

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.2.13: 3rd Wed January Daily Profiles

2003

3,000

2005

2010

2015

2020

Demand (MW)

2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 1,190 1,118 1,083 1,083 1,078 1,118 1,254 1,420 1,550 1,597 1,592 1,590 1,587 1,552 1,547 1,547 1,647 1,730 1,715 1,690 1,657 1,617 1,478 1,388

2003 1,243 1,165 1,113 1,109 1,099 1,144 1,241 1,409 1,572 1,601 1,595 1,562 1,523 1,533 1,512 1,500 1,556 1,739 1,718 1,699 1,642 1,593 1,495 1,389

Page 43 of 160

2005 1,249 1,171 1,119 1,115 1,104 1,150 1,247 1,416 1,580 1,609 1,603 1,570 1,531 1,541 1,520 1,508 1,564 1,748 1,727 1,707 1,650 1,601 1,502 1,396

2010 1,392 1,305 1,247 1,242 1,231 1,281 1,390 1,578 1,761 1,793 1,786 1,749 1,706 1,717 1,693 1,680 1,743 1,948 1,924 1,903 1,839 1,784 1,674 1,556

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,616 1,515 1,447 1,442 1,429 1,487 1,613 1,832 2,044 2,081 2,074 2,031 1,980 1,993 1,966 1,950 2,023 2,261 2,233 2,209 2,135 2,071 1,944 1,806

2020 1,914 1,794 1,714 1,708 1,692 1,762 1,911 2,170 2,421 2,466 2,456 2,405 2,345 2,361 2,328 2,310 2,396 2,678 2,646 2,616 2,529 2,453 2,302 2,139

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Figure A6.2.14: 3rd Wed April Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 848 798 768 763 763 808 915 1,121 1,229 1,229 1,194 1,181 1,166 1,111 1,126 1,101 1,083 1,058 1,063 1,218 1,331 1,280 1,097 977

2003 934 843 811 805 807 865 1,022 1,187 1,285 1,272 1,220 1,201 1,186 1,179 1,177 1,169 1,147 1,111 1,107 1,247 1,396 1,334 1,201 1,052

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2005 965 871 838 832 834 894 1,056 1,226 1,327 1,314 1,260 1,241 1,225 1,218 1,216 1,208 1,185 1,148 1,144 1,288 1,442 1,378 1,241 1,087

2010 1,099 992 955 947 950 1,018 1,203 1,397 1,512 1,497 1,436 1,414 1,396 1,388 1,385 1,376 1,350 1,308 1,303 1,468 1,643 1,570 1,414 1,238

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,280 1,155 1,111 1,103 1,106 1,185 1,400 1,626 1,760 1,743 1,671 1,645 1,625 1,615 1,612 1,602 1,571 1,522 1,517 1,708 1,913 1,828 1,645 1,441

2020 1,522 1,374 1,322 1,312 1,315 1,410 1,666 1,935 2,095 2,073 1,989 1,958 1,933 1,922 1,919 1,905 1,870 1,811 1,804 2,033 2,275 2,174 1,958 1,715

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Figure A6.2.15: 3rd Wed Jul Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 810 757 715 715 710 725 806 971 1,044 1,096 1,104 1,126 1,098 1,103 1,107 1,093 1,056 1,030 1,021 1,016 1,082 1,152 1,084 954

2003 855 795 761 755 756 769 851 1,020 1,109 1,142 1,146 1,161 1,179 1,174 1,198 1,188 1,154 1,122 1,073 1,087 1,129 1,252 1,172 1,000

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2005 918 854 817 811 812 826 914 1,096 1,191 1,227 1,231 1,247 1,266 1,261 1,287 1,276 1,240 1,205 1,153 1,168 1,213 1,345 1,259 1,074

2010 1,087 1,010 967 960 961 977 1,082 1,296 1,410 1,451 1,457 1,476 1,499 1,492 1,523 1,510 1,467 1,426 1,364 1,382 1,435 1,591 1,490 1,271

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,257 1,169 1,119 1,110 1,111 1,130 1,251 1,499 1,630 1,679 1,685 1,707 1,733 1,726 1,761 1,746 1,696 1,649 1,577 1,598 1,660 1,840 1,723 1,470

2020 1,501 1,396 1,336 1,326 1,328 1,350 1,494 1,791 1,947 2,005 2,012 2,039 2,070 2,062 2,104 2,086 2,026 1,970 1,884 1,909 1,983 2,199 2,058 1,756

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Figure A6.2.16: 3rd Wed Oct Daily Profiles

2003

2,500

2005

2010

2015

2020

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 -

2002 910 846 829 804 814 876 1,035 1,236 1,307 1,260 1,236 1,116 1,106 1,086 1,085 1,072 1,051 1,103 1,210 1,285 1,378 1,303 1,164 1,026

2003 900 846 822 824 820 877 1,065 1,239 1,325 1,320 1,313 1,296 1,270 1,247 1,277 1,274 1,257 1,243 1,393 1,477 1,419 1,333 1,194 1,052

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2005 893 839 815 817 813 870 1,056 1,229 1,314 1,309 1,302 1,286 1,260 1,237 1,267 1,264 1,247 1,233 1,382 1,465 1,408 1,322 1,184 1,044

2010 926 871 846 848 844 902 1,096 1,275 1,363 1,358 1,351 1,334 1,307 1,283 1,314 1,311 1,293 1,279 1,433 1,520 1,460 1,372 1,229 1,083

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,051 988 960 962 958 1,024 1,244 1,447 1,548 1,542 1,534 1,514 1,483 1,456 1,492 1,488 1,468 1,452 1,627 1,725 1,657 1,557 1,395 1,229

2020 1,215 1,142 1,110 1,112 1,107 1,184 1,438 1,673 1,789 1,782 1,773 1,750 1,715 1,683 1,724 1,720 1,697 1,678 1,881 1,994 1,916 1,800 1,612 1,420

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Figure A6.2.17: Peak Hourly Demand Daily Profiles

1/13/03

3,000

1/14/05

1/14/10

1/14/15

1/14/20

Demand (MW)

2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

1/22/01 -

1/3/02 1,170 1,110 1,060 1,030 1,035 1,060 1,292 1,443 1,548 1,692 1,717 1,663 1,692 1,707 1,692 1,682 1,742 1,808 1,838 1,803 1,797 1,737 1,615 1,495

1/13/03 1,230 1,169 1,112 1,114 1,113 1,163 1,352 1,456 1,611 1,728 1,708 1,682 1,646 1,669 1,659 1,630 1,718 1,853 1,854 1,838 1,786 1,810 1,525 1,523

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1/14/05 1,236 1,175 1,118 1,120 1,119 1,169 1,359 1,463 1,619 1,737 1,717 1,690 1,654 1,677 1,667 1,638 1,727 1,862 1,863 1,847 1,795 1,819 1,533 1,531

1/14/10 1,378 1,309 1,245 1,248 1,247 1,303 1,514 1,631 1,804 1,935 1,913 1,884 1,844 1,869 1,858 1,826 1,924 2,075 2,076 2,059 2,000 2,027 1,708 1,706

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

1/14/15 1,599 1,520 1,446 1,448 1,447 1,512 1,758 1,893 2,094 2,246 2,220 2,187 2,140 2,170 2,157 2,119 2,233 2,409 2,410 2,389 2,322 2,353 1,983 1,980

1/14/20 1,894 1,800 1,712 1,716 1,714 1,791 2,082 2,242 2,481 2,661 2,630 2,590 2,535 2,570 2,555 2,510 2,646 2,854 2,855 2,831 2,750 2,787 2,349 2,345

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Figure A6.2.18: Minimum Hourly Demand Daily Profiles

5/2/03

2,500

5/3/05

5/6/10

5/3/15

5/2/20

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

8/12/01 -

6/2/02 738 698 677 672 672 692 793 950 1,040 1,065 1,065 1,064 1,052 1,045 1,060 1,030 1,015 985 980 1,015 1,110 1,159 1,019 869

5/2/03 841 765 721 705 707 716 782 899 986 1,020 1,020 977 961 935 923 923 887 868 889 940 1,131 1,153 1,029 864

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5/3/05 814 739 719 714 699 717 796 905 1,034 1,088 1,115 1,094 1,117 1,067 1,111 1,109 1,064 1,022 1,019 1,044 1,233 1,221 1,085 962

5/6/10 905 851 830 798 827 871 1,015 1,221 1,294 1,323 1,298 1,294 1,286 1,310 1,333 1,331 1,285 1,228 1,201 1,247 1,461 1,499 1,358 1,127

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/3/15 1,078 980 952 945 926 949 1,055 1,199 1,370 1,441 1,477 1,449 1,480 1,414 1,471 1,469 1,410 1,354 1,349 1,382 1,633 1,618 1,437 1,274

5/2/20 1,283 1,165 1,133 1,125 1,102 1,130 1,255 1,426 1,630 1,715 1,757 1,725 1,760 1,682 1,751 1,747 1,677 1,610 1,606 1,645 1,943 1,925 1,710 1,516

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1

Appendix 6.3 Bulgaria Demand Forecasting

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1. Historical Trend Analysis The data for Bulgaria was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis.

(1) Net Demand GWh 1990 36,854 1991 31,561 1992 28,987 1993 28,775 1994 28,862 1995 31,467 1996 31,982 1997 28,551 1998 27,769 1999 25,522 2000 25,486 2001 25,800 2002 25,312 2003 26,396 Sources: (1&2) NEK

Figure A6.3.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 45,920 19.7% 8,718 4,227 40,958 22.9% 8,632 3,656 1,435 3,525 4,960 33,947 14.6% 8,540 3,394 1,310 3,443 4,753 33,528 14.2% 8,472 3,396 1,264 3,467 4,731 33,593 14.1% 8,444 3,418 1,421 3,993 5,414 36,881 14.7% 8,406 3,743 1,388 4,208 5,596 37,578 14.9% 8,362 3,825 1,321 4,689 6,010 34,561 17.4% 8,312 3,435 1,298 4,297 5,595 33,364 16.8% 8,257 3,363 1,995 4,474 6,469 31,991 20.2% 8,211 3,108 1,232 5,058 6,290 31,776 19.8% 8,170 3,119 835 5,291 6,126 31,926 19.2% 7,913 3,260 825 5,326 6,151 31,463 19.5% 7,846 3,226 762 5,186 5,948 32,344 18.4% 7,801 3,384

Gross

Net

50,000

Consumption GWh

45,000 40,000 35,000 30,000 25,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

20,000

Source: NEK Peak demand incl. Pumping & Aux

31 December 2004

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Figure A6.3.2: Historical Sectoral Electricity Demand Domestic Industry Other Total Net Demand Demand Demand Demand GWh GWh GWh GWh 1990 10,475 20,291 6,088 36,854 1991 10,405 17,065 4,091 31,561 1992 9,685 13,300 6,002 28,987 1993 10,021 13,496 5,258 28,775 1994 9,806 13,840 5,216 28,862 1995 10,956 14,951 5,560 31,467 1996 11,486 14,357 6,139 31,982 1997 9,882 16,003 2,666 28,551 1998 10,540 14,787 2,442 27,769 1999 10,115 12,762 2,645 25,522 2000 9,858 13,096 2,532 25,486 2001 9,751 13,555 2,494 25,800 2002 9,306 13,795 2,211 25,312 2003 9,311 14,798 2,287 26,396 Source: NEK Peak demand incl. Pumping & Aux

Domestic

Domestic Demand Growth

Industry Demand Growth

-0.7% -7.4% 3.4% -2.2% 10.5% 4.6% -16.2% 6.2% -4.2% -2.6% -1.1% -4.8% 0.1%

Industry

-18.9% -28.3% 1.5% 2.5% 7.4% -4.1% 10.3% -8.2% -15.9% 2.6% 3.4% 1.7% 6.8%

Other Demand Growth

Total Net Demand Growth

-48.8% 31.8% -14.1% -0.8% 6.2% 9.4% -130.3% -9.2% 7.7% -4.5% -1.5% -12.8% 3.3%

-16.8% -8.9% -0.7% 0.3% 8.3% 1.6% -12.0% -2.8% -8.8% -0.1% 1.2% -1.9% 4.1%

Other

40,000 35,000 Consumption GWh

30,000 25,000 20,000 15,000 10,000 5,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

-

Source: NEK Peak demand incl. Pumping & Aux

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Figure A6.3.3: Historical System Load Factor Gross Auxilliary Pumping Gross Demand Demand Demand Consump GWh GWh GWh GWh 1990 45,920 4,623 50,543 1991 40,958 4,206 45,164 1992 33,947 4,082 246 38,275 1993 33,528 4,254 232 38,014 1994 33,593 4,173 339 38,105 1995 36,881 4,293 668 41,842 1996 37,578 4,281 494 42,353 1997 34,561 4,389 329 39,279 1998 33,364 4,356 344 38,064 1999 31,991 3,955 351 36,297 2000 31,776 4,040 491 36,307 2001 31,926 4,351 767 37,044 2002 31,463 4,106 837 36,406 2003 32,344 4,230 483 37,057 Source: NEK Peak demand incl. Pumping & Aux

Gross Consmp Growth -10.6% -15.3% -0.7% 0.2% 9.8% 1.2% -7.3% -3.1% -4.6% 0.0% 2.0% -1.7% 1.8%

System Peak MW 8,111 7,489 7,193 7,145 7,040 7,522 7,923 7,232 7,257 6,923 7,068 6,912 6,768 6,713

System Peak Growth

-0.106424 -0.152533 -0.006819 0.002394 0.098071 0.012213 -0.07258 -0.030933 -0.046422 0.000276 0.020299 -0.017223 0.017882

-0.076686 -0.039525 -0.006673 -0.014696 0.068466 0.05331 -0.087214 0.003457 -0.046025 0.020945 -0.022071 -0.020833 -0.008126

-7.7% -4.0% -0.7% -1.5% 6.8% 5.3% -8.7% 0.3% -4.6% 2.1% -2.2% -2.1% -0.8%

System Load Factor 71.1% 68.8% 60.7% 60.7% 61.8% 63.5% 61.0% 62.0% 59.9% 59.9% 58.6% 61.2% 61.4% 63.0%

75%

50% 45%

31 December 2004

Page 52 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

55%

2002

60%

2001

65%

2000

System Load Factor

70%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.3.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 7.3% 7.3% 7.3% 2002 5.5% 5.5% 5.5% Case 1 Case 3 Case 2 2003 5.6% 5.6% 5.6% 2004 4.7% 4.7% 4.7% 2005 4.5% 6.0% 6.0% 8% 2006 4.5% 6.2% 6.2% 7% 2007 4.5% 6.2% 6.2% 6% 2008 4.5% 6.2% 6.2% 2009 4.5% 6.2% 6.2% 5% 2010 4.5% 6.5% 6.5% 4% 2011 4.5% 6.5% 6.5% 3% 2012 4.5% 6.2% 6.2% 2% 2013 4.5% 6.2% 6.2% 2014 4.5% 6.9% 6.9% 1% 2015 4.5% 6.9% 6.9% 0% 2016 4.5% 6.4% 6.4% 2017 4.5% 4.5% 4.5% 2018 4.5% 4.0% 4.0% Sources: (1) PwC (2) NEK (3) PwC 2019 4.5% 4.0% 4.0% 2020 4.5% 3.5% 3.5% Sources: (1) PwC (2) NEK (3) PwC Figure A6.3.5: Forecast Population

yoy growth

8,400 8,200 8,000 7,800 7,600 7,400 7,200 7,000 6,800 6,600 6,400 6,200

0.00% -0.50% -1.00% -1.50% -2.00% -2.50% -3.00%

31 December 2004

2020

2018

2016

2014

2012

2010

Source: NEK

2008

2006

2004

2002

2000

-3.50%

Pop ('000) ytd growth yoy growth 2000 8,170 2001 7,913 -3.15% 2002 7,846 -0.85% 2003 7,801 0.0% -0.57% 2004 7,751 -0.6% -0.64% 2005 7,700 -1.3% -0.67% 2006 7,650 -1.9% -0.65% 2007 7,599 -2.6% -0.66% 2008 7,551 -3.2% -0.63% 2009 7,503 -3.8% -0.63% 2010 7,430 -4.8% -0.98% 2011 7,357 -5.7% -0.98% 2012 7,309 -6.3% -0.66% 2013 7,260 -6.9% -0.66% 2014 7,164 -8.2% -1.33% 2015 7,068 -9.4% -1.33% 2016 6,974 -10.6% -1.33% 2017 6,974 -10.6% 0.00% 2018 6,974 -10.6% 0.00% 2019 6,974 -10.6% 0.00% 2020 6,974 -10.6% 0.00% Source: NEK

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45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

Figure A6.3.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 32,344 6,180 GWh MW 2004 33,477 2005 34,354 6,383 2006 35,201 7600 7400 2007 35,953 7200 2008 36,604 7000 2009 37,159 6800 2010 37,684 6,482 6600 2011 38,169 6400 2012 38,637 6200 2013 39,074 6000 2014 39,717 5800 2015 40,678 7,025 5600 2016 41,428 5400 2017 41,958 2018 42,245 2019 42,517 2020 42,481 7,340 Source: PwC Figure A6.3.7: Case 2 Economic Model Forecast Calculation

Source: PwC

GDP per Capita (95 US$) 2002 1,613 2003 1,703 2004 1,783 2005 1,891 2006 2,008 2007 2,132 2008 2,264 2009 2,403 2010 2,561 2011 2,728 2012 2,897 2013 3,077 2014 3,290 2015 3,518 2016 3,744 2017 3,912 2018 4,069 2019 4,231 2020 4,379 Source: PwC Year

31 December 2004

LF% 59.7% 61.4%

66.4%

66.1%

2018

2015

2012

2009

2006

2003

System Peak Demand

Gross Consumption GWh

3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 5.5% 2.00 3,226 7,846 25,312 5.6% 1.99 3,384 7,801 26,396 4.7% 1.94 3,465 7,751 26,855 6.0% 1.90 3,590 7,700 27,641 6.2% 1.86 3,724 7,650 28,488 6.2% 1.81 3,862 7,599 29,345 6.2% 1.77 4,001 7,551 30,210 6.2% 1.72 4,142 7,503 31,081 6.5% 1.68 4,301 7,430 31,957 6.5% 1.64 4,463 7,357 32,835 6.2% 1.59 4,613 7,309 33,713 6.2% 1.55 4,764 7,260 34,589 6.9% 1.50 4,950 7,164 35,458 6.9% 1.46 5,138 7,068 36,319 6.4% 1.42 5,304 6,974 36,991 4.5% 1.37 5,371 6,974 37,460 4.0% 1.33 5,408 6,974 37,715 4.0% 1.29 5,439 6,974 37,930 3.5% 1.24 5,437 6,974 37,920

Page 54 of 160

66.1%

D&T Gross Losses Consumpt (%) (GWh) 19.5% 31,463 18.4% 32,344 19.8% 33,477 19.5% 34,354 19.1% 35,201 18.4% 35,953 17.5% 36,604 16.4% 37,159 15.2% 37,684 14.0% 38,169 12.7% 38,637 11.5% 39,074 10.7% 39,717 10.7% 40,678 10.7% 41,428 10.7% 41,958 10.7% 42,245 10.8% 42,517 10.7% 42,481

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Figure A6.3.8: Comparison with other Forecasts

Case 2 PwC NEK Low

Case 1 PwC NEK High

Case 3 PwC

Gross Consumption (GWh)

60,000 50,000 40,000 30,000 20,000 10,000

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, NEK 2003 [1] Case 2 Case 1 GWh 2000 31,776 2001 31,926 2002 31,463 2003 32,344 32,344 2004 33,477 32,489 2005 34,354 32,124 2006 35,201 31,815 2007 35,953 31,548 2008 36,604 31,327 2009 37,159 31,139 2010 37,684 30,931 2011 38,169 30,796 2012 38,637 30,844 2013 39,074 30,960 2014 39,717 31,117 2015 40,678 31,606 2016 41,428 32,162 2017 41,958 33,235 2018 42,245 34,395 2019 42,517 35,672 2020 42,481 37,000 Source: PwC 2004, NEK 2003 [1] 31 December 2004

Case 3

32,344 33,678 34,777 35,866 36,881 37,814 38,670 39,519 40,351 41,190 42,023 43,110 44,583 45,870 46,958 47,815 48,701 49,278

NEK Low NEK High 31,776 31,926 31,463 32,344 31,800 32,420 32,290 32,940 32,670 33,460 32,970 33,900 33,660 34,410 34,300 35,160 35,400 36,120 36,350 37,050 36,800 37,740 37,020 38,350 37,400 39,320 38,070 40,720 39,400 42,280 40,200 43,400 40,940 44,750 41,900 46,640 42,930 48,170

Page 55 of 160

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Figure A6.3.9: Forecast Final Demand per Capita

5,000

yoy growth

40,000

5%

35,000

4%

30,000

3%

25,000

2%

20,000

1%

15,000

0%

10,000

-1%

5,000

-2%

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

-3% 2000

-

Annual Growth

Final Demand (GWh)

GWh

2018

Source: PwC

2000

-

2015

1,000

2012

2,000

2009

3,000

2006

4,000

2003

Annual Growth

Final demand kWh/capita

6,000

kWh/cap ytd growth yoy growth 2000 3,119 kWh/cap yoy growth 2001 3,260 4.5% 2002 3,226 -1.1% 2003 3,384 0.0% 4.9% 6% 2004 3,465 2.4% 2.4% 5% 2005 3,590 6.1% 3.6% 2006 3,724 10.1% 3.7% 4% 2007 3,862 14.1% 3.7% 3% 2008 4,001 18.2% 3.6% 2% 2009 4,142 22.4% 3.5% 1% 2010 4,301 27.1% 3.8% 2011 4,463 31.9% 3.8% 0% 2012 4,613 36.3% 3.4% -1% 2013 4,764 40.8% 3.3% -2% 2014 4,950 46.3% 3.9% 2015 5,138 51.9% 3.8% 2016 5,304 56.8% 3.2% 2017 5,371 58.7% 1.3% 2018 5,408 59.8% 0.7% 2019 5,439 60.7% 0.6% 2020 5,437 60.7% 0.0% Source: PwC Figure A6.3.10: Forecast Final Net Demand GWh ytd growth yoy growth 2000 25,486 2001 25,800 1.2% 2002 25,312 -1.9% 2003 26,396 0.0% 4.3% 2004 26,855 1.7% 1.7% 2005 27,641 4.7% 2.9% 2006 28,488 7.9% 3.1% 2007 29,345 11.2% 3.0% 2008 30,210 14.4% 2.9% 2009 31,081 17.7% 2.9% 2010 31,957 21.1% 2.8% 2011 32,835 24.4% 2.7% 2012 33,713 27.7% 2.7% 2013 34,589 31.0% 2.6% 2014 35,458 34.3% 2.5% 2015 36,319 37.6% 2.4% 2016 36,991 40.1% 1.9% 2017 37,460 41.9% 1.3% 2018 37,715 42.9% 0.7% 2019 37,930 43.7% 0.6% 2020 37,920 43.7% 0.0% Source: PwC

Page 56 of 160

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.3.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

13% 12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 12.2% 10.1% 9.7% 7.1% 6.6% 6.3% 6.7% 6.9% 6.8% 8.1% 8.8% 2001 11.1% 9.7% 8.7% 8.0% 6.9% 6.4% 6.7% 6.8% 6.5% 7.6% 9.7% 2002 2003 10.9% 10.0% 9.3% 8.1% 6.7% 6.4% 6.8% 6.8% 6.7% 7.9% 9.3% 2004 10.8% 9.9% 9.3% 8.1% 6.7% 6.5% 7.0% 7.0% 6.7% 7.9% 9.2% 2005 10.7% 9.9% 9.3% 8.1% 6.7% 6.7% 7.1% 7.1% 6.7% 7.8% 9.1% 2006 10.5% 9.8% 9.2% 8.1% 6.7% 6.8% 7.3% 7.3% 6.8% 7.8% 9.0% 2007 10.4% 9.8% 9.2% 8.2% 6.7% 6.9% 7.4% 7.4% 6.8% 7.8% 8.9% 2008 10.3% 9.7% 9.2% 8.2% 6.7% 7.0% 7.6% 7.5% 6.8% 7.8% 8.8% 2009 10.2% 9.6% 9.2% 8.2% 6.8% 7.2% 7.7% 7.7% 6.8% 7.8% 8.7% 2010 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2011 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2012 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2013 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2014 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2015 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2016 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2017 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2018 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2019 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% 2020 10.1% 9.6% 9.1% 8.2% 6.8% 7.3% 7.9% 7.8% 6.9% 7.8% 8.6% Source: PwC 31 December 2004

Page 57 of 160

Dec

Dec 10.8% 11.9% 11.1% 10.9% 10.8% 10.6% 10.5% 10.3% 10.2% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

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Figure A6.3.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 2001 94.2% 91.9% 86.7% 83.2% 62.2% 58.1% 58.2% 57.5% 60.9% 79.6% 89.4% 2002 2003 96.3% 100.0% 90.9% 85.5% 58.3% 59.6% 61.5% 60.3% 66.1% 84.4% 84.9% 2005 94.9% 95.0% 83.8% 84.0% 59.8% 61.8% 62.9% 61.8% 64.5% 80.6% 86.1% 2010 96.8% 99.0% 89.0% 90.9% 65.1% 72.7% 75.3% 73.2% 71.2% 86.1% 88.5% 2015 96.4% 98.9% 88.6% 91.1% 64.7% 72.8% 74.7% 73.0% 70.6% 86.4% 87.9% 2020 96.2% 98.8% 88.5% 90.7% 64.7% 72.7% 75.0% 73.0% 70.5% 86.1% 88.0% Source: PwC

31 December 2004

Page 58 of 160

Dec 100.0% 95.3% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.3.13: 3rd Wed January Daily Profiles

2003

8,000

2005

2010

2015

2020

7,000

Demand (MW)

6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 4,783 4,642 4,444 4,305 4,207 4,307 4,821 5,142 5,193 5,255 5,135 5,132 5,029 5,025 4,964 4,953 4,944 5,320 5,652 5,668 5,544 5,469 5,508 5,325

2002 -

2003 5,066 5,005 4,828 4,759 4,712 4,759 5,129 5,093 5,160 5,173 5,127 5,060 5,018 4,880 4,801 4,752 4,743 5,253 5,475 5,514 5,328 5,264 5,471 5,239

Page 59 of 160

2005 5,356 5,291 5,104 5,032 4,981 5,032 5,422 5,385 5,455 5,469 5,420 5,349 5,305 5,159 5,076 5,024 5,014 5,553 5,788 5,829 5,633 5,565 5,783 5,539

2010 5,546 5,479 5,285 5,211 5,158 5,211 5,615 5,576 5,649 5,664 5,613 5,539 5,494 5,343 5,256 5,203 5,192 5,751 5,994 6,037 5,833 5,763 5,989 5,736

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 5,990 5,917 5,708 5,627 5,571 5,627 6,064 6,022 6,101 6,116 6,062 5,982 5,933 5,770 5,676 5,619 5,607 6,210 6,473 6,519 6,299 6,224 6,468 6,195

2020 6,247 6,172 5,953 5,869 5,810 5,869 6,325 6,281 6,363 6,379 6,323 6,240 6,188 6,018 5,921 5,861 5,849 6,478 6,752 6,800 6,571 6,492 6,746 6,461

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Figure A6.3.14: 3rd Wed April Daily Profiles

2003

6,000

2005

2010

2015

2020

Demand (MW)

5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 3,417 3,167 3,030 2,943 2,898 2,970 3,557 3,753 3,866 3,914 3,895 3,878 3,872 3,922 3,898 3,833 3,750 3,748 3,887 3,940 4,307 4,339 4,294 3,990

2002 -

2003 3,549 3,419 3,327 3,344 3,334 3,301 3,680 3,814 3,799 3,799 3,695 3,623 3,621 3,622 3,543 3,530 3,500 3,543 3,705 3,839 4,176 4,178 4,162 3,976

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2005 3,739 3,602 3,506 3,524 3,512 3,478 3,877 4,019 4,003 4,003 3,893 3,818 3,816 3,817 3,734 3,720 3,688 3,733 3,904 4,045 4,400 4,403 4,385 4,189

2010 4,112 3,961 3,855 3,875 3,862 3,824 4,264 4,420 4,402 4,402 4,281 4,198 4,196 4,197 4,106 4,090 4,055 4,105 4,292 4,448 4,838 4,841 4,822 4,606

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 4,463 4,299 4,185 4,206 4,193 4,151 4,628 4,797 4,778 4,778 4,647 4,557 4,555 4,556 4,457 4,440 4,402 4,455 4,659 4,829 5,252 5,255 5,234 5,000

2020 4,642 4,472 4,353 4,375 4,361 4,318 4,814 4,990 4,970 4,970 4,834 4,740 4,737 4,739 4,636 4,618 4,579 4,634 4,846 5,022 5,463 5,466 5,444 5,201

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Figure A6.3.15: 3rd Wed Jul Daily Profiles

2003

6,000

2005

2010

2015

2020

Demand (MW)

5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 2,563 2,334 2,341 2,296 2,168 2,206 2,715 2,926 3,202 3,190 3,145 3,176 3,232 3,252 3,175 3,118 3,156 3,137 3,180 3,125 3,141 3,377 3,537 3,292

2002 -

2003 2,890 2,668 2,618 2,553 2,485 2,559 2,895 2,939 3,052 3,099 3,119 3,118 3,192 3,226 3,190 3,211 3,173 3,164 3,174 3,212 3,167 3,339 3,478 3,422

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2005 3,174 2,930 2,875 2,804 2,729 2,810 3,180 3,228 3,352 3,404 3,426 3,425 3,506 3,544 3,504 3,527 3,485 3,476 3,486 3,528 3,478 3,667 3,820 3,759

2010 3,860 3,563 3,496 3,410 3,319 3,417 3,867 3,926 4,076 4,139 4,166 4,165 4,263 4,309 4,261 4,289 4,238 4,226 4,239 4,290 4,230 4,459 4,645 4,570

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 4,145 3,827 3,755 3,663 3,565 3,670 4,153 4,217 4,378 4,445 4,474 4,473 4,579 4,628 4,576 4,607 4,552 4,539 4,553 4,608 4,543 4,790 4,989 4,909

2020 4,349 4,014 3,940 3,842 3,740 3,850 4,357 4,424 4,593 4,664 4,694 4,693 4,803 4,855 4,801 4,833 4,776 4,762 4,777 4,834 4,766 5,025 5,234 5,150

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Figure A6.3.16: 3rd Wed Oct Daily Profiles

2003

6,000

2005

2010

2015

2020

Demand (MW)

5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 2,616 2,434 2,226 2,179 2,177 2,321 3,146 3,245 3,303 3,315 3,221 3,177 3,126 3,122 3,095 3,079 3,112 3,143 3,432 3,938 3,813 3,536 3,432 3,190

2002 -

2003 3,053 2,958 2,872 2,873 2,796 2,892 3,317 3,517 3,645 3,653 3,579 3,573 3,600 3,630 3,612 3,676 3,644 3,759 4,065 4,379 4,198 3,925 3,806 3,613

Page 62 of 160

2005 2,956 2,864 2,781 2,782 2,707 2,800 3,211 3,405 3,529 3,537 3,465 3,459 3,486 3,515 3,497 3,559 3,528 3,639 3,936 4,239 4,064 3,800 3,684 3,498

2010 3,130 3,033 2,945 2,945 2,866 2,965 3,400 3,606 3,737 3,745 3,669 3,663 3,691 3,722 3,703 3,769 3,736 3,853 4,168 4,489 4,304 4,024 3,902 3,704

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 3,396 3,290 3,195 3,196 3,110 3,216 3,689 3,912 4,055 4,063 3,981 3,974 4,004 4,038 4,017 4,089 4,054 4,181 4,522 4,870 4,669 4,366 4,233 4,018

2020 3,691 3,576 3,472 3,473 3,380 3,496 4,010 4,252 4,407 4,417 4,327 4,319 4,353 4,389 4,366 4,445 4,406 4,544 4,915 5,294 5,075 4,746 4,601 4,368

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Figure A6.3.17: Peak Hourly Demand Daily Profiles

2/13/03

8,000

12/31/05

12/31/10

12/31/15

12/30/20

7,000

Demand (MW)

6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

12/19/01 5,165 4,958 4,829 4,763 4,739 4,840 5,323 5,566 5,748 5,746 5,646 5,568 5,448 5,346 5,261 5,348 5,433 5,802 6,033 6,080 6,006 5,951 6,021 5,798

1/0/00 -

2/13/03 5,001 4,897 4,697 4,666 4,640 4,728 5,038 5,240 5,401 5,492 5,464 5,479 5,439 5,411 5,345 5,270 5,276 5,449 5,865 5,949 5,824 5,704 5,798 5,620

Page 63 of 160

12/31/05 4,951 4,578 4,512 4,447 4,327 4,440 4,669 4,675 4,844 5,105 5,128 5,119 5,106 5,085 5,062 5,259 5,711 6,154 6,383 5,936 5,353 4,987 4,942 4,966

12/31/10 5,027 4,649 4,582 4,515 4,394 4,508 4,741 4,747 4,919 5,184 5,208 5,199 5,185 5,164 5,140 5,340 5,800 6,249 6,482 6,028 5,435 5,064 5,018 5,043

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/31/15 5,449 5,039 4,966 4,894 4,762 4,886 5,138 5,145 5,331 5,619 5,644 5,634 5,620 5,597 5,571 5,788 6,286 6,773 7,025 6,533 5,891 5,488 5,439 5,465

12/30/20 5,693 5,264 5,189 5,113 4,976 5,105 5,369 5,376 5,570 5,871 5,897 5,887 5,872 5,848 5,820 6,047 6,568 7,077 7,340 6,825 6,155 5,734 5,683 5,710

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Figure A6.3.18: Minimum Hourly Demand Daily Profiles

6/1/03

5,000

6/2/05

5/26/10

5/26/15

5/25/20

4,500

Demand (MW)

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

9/23/01 2,224 2,022 1,899 1,830 1,788 1,829 2,247 2,406 2,628 2,791 2,817 2,881 2,931 2,814 2,733 2,696 2,739 2,856 2,970 3,299 3,563 3,315 3,095 2,828

1/0/00 -

6/1/03 2,529 2,329 2,193 2,100 2,052 2,018 2,326 2,434 2,540 2,653 2,663 2,719 2,818 2,769 2,664 2,650 2,653 2,753 2,754 2,886 2,985 3,266 3,406 3,083

Page 64 of 160

6/2/05 2,816 2,594 2,442 2,338 2,285 2,247 2,590 2,710 2,828 2,953 2,965 3,027 3,138 3,084 2,966 2,951 2,954 3,066 3,067 3,214 3,323 3,637 3,793 3,433

5/26/10 3,031 2,873 2,799 2,663 2,541 2,565 2,911 3,130 3,322 3,450 3,462 3,532 3,567 3,489 3,428 3,461 3,511 3,566 3,686 3,822 3,936 4,060 4,072 3,814

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/26/15 3,265 3,095 3,015 2,868 2,737 2,763 3,136 3,371 3,579 3,717 3,729 3,805 3,842 3,758 3,692 3,728 3,782 3,841 3,971 4,117 4,240 4,373 4,387 4,109

5/25/20 3,414 3,237 3,153 2,999 2,862 2,889 3,280 3,526 3,743 3,887 3,900 3,979 4,018 3,931 3,862 3,899 3,955 4,017 4,153 4,305 4,434 4,573 4,588 4,297

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5

Appendix 6.4 Croatia Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for Croatia was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.4.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 11,369 420 1,151 1,571 12,940 12.1% 1992 9,456 346 1,060 1,406 10,862 12.9% 1993 9,369 385 989 1,374 10,743 12.8% 1994 9,582 360 1,097 1,457 11,039 13.2% 1995 9,927 415 1,062 1,477 11,404 13.0% 1996 10,306 444 1,308 1,752 12,058 14.5% 1997 11,039 444 1,310 1,754 12,793 13.7% 1998 11,102 498 1,754 2,252 13,354 16.9% 1999 11,699 556 1,420 1,976 13,675 14.4% 2000 11,824 695 1,317 2,012 13,836 14.5% 4,437 2,665 2001 11,900 721 1,834 2,555 14,455 17.7% 4,437 2,682 2002 12,615 14,691 14.1% 4,462 2,827 2003 15,525 4,486 Sources: (1) HEP (2) Hrvoje Požar 2001 [3] (1) Net Demand GWh

Gross

Net

16,000

Consumption GWh

15,000 14,000 13,000 12,000 11,000 10,000 9,000 2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

8,000

Source: HEP

31 December 2004

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Figure A6.4.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1991 4,462 1992 4,048 1993 4,146 1994 4,208 1995 4,621 1996 4,898 1997 5,190 1998 5,267 1999 5,742 2000 5,729 2001 5,560 2002 5,954 2003 Source: HEP

Industry Demand GWh 4,591 3,333 2,997 2,972 2,695 2,567 2,796 2,786 2,759 2,809 2,850 -

Other Demand GWh 2,316 2,075 2,226 2,402 2,611 2,841 3,053 3,049 3,198 3,286 3,490 -

Total Net Demand GWh 11,369 9,456 9,369 9,582 9,927 10,306 11,039 11,102 11,699 11,824 11,900 12,615 -

Domestic

Domestic Demand Growth

Industry Demand Growth

-10.2% 2.4% 1.5% 8.9% 5.7% 5.6% 1.5% 8.3% -0.2% -3.0% 6.6% -

Industry

Other Demand Growth

-37.7% -11.2% -0.8% -10.3% -5.0% 8.2% -0.4% -1.0% 1.8% 1.4% -

-11.6% 6.8% 7.3% 8.0% 8.1% 6.9% -0.1% 4.7% 2.7% 5.8% -

Total Net Demand Growth -20.2% -0.9% 2.2% 3.5% 3.7% 6.6% 0.6% 5.1% 1.1% 0.6% 5.7% -

Other

14,000

Consumption GWh

12,000 10,000 8,000 6,000 4,000 2,000

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Source: HEP

31 December 2004

Page 67 of 160

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Figure A6.4.3: Historical System Load Factor Gross Demand GWh 1990 1991 12,940 1992 10,862 1993 10,743 1994 11,039 1995 11,404 1996 12,058 1997 12,793 1998 13,354 1999 13,675 2000 13,836 2001 14,455 2002 14,691 2003 15,525 Source: HEP

Auxilliary Demand GWh 44 -

Pumping Gross Demand Consump GWh GWh 12,940 10,862 10,743 11,039 11,404 12,058 12,793 13,354 13,675 13,836 14,455 86 14,821 15,525

Gross Consmp Growth 0.0% -16.1% -1.1% 2.8% 3.3% 5.7% 6.1% 4.4% 2.4% 1.2% 4.5% 2.5% 4.7%

System Peak MW 2,521 2,070 2,035 2,023 2,097 2,471 2,417 2,585 2,600 2,661 2,796 2,673

System Peak Growth

-0.160587 -0.010956 0.027553 0.033065 0.057348 0.060955 0.043852 0.024038 0.011773 0.044738 0.02532 0.047476

-0.178897 -0.016908 -0.005897 0.036579 0.17835 -0.021854 0.069508 0.005803 0.023462 0.050733

0.0% -17.9% -1.7% -0.6% 3.7% 17.8% -2.2% 7.0% 0.6% 2.3% 5.1% 0.0% 0.0%

System Load Factor 58.6% 59.9% 60.3% 62.3% 62.1% 55.7% 60.4% 59.0% 60.0% 59.4% 59.0% 66.3%

70%

45%

31 December 2004

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1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

50%

2002

55%

2001

60%

2000

System Load Factor

65%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.4.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 3.8% 3.8% 3.8% 2002 5.2% 5.2% 5.2% Case 1 Case 3 Case 2 2003 4.2% 4.2% 4.2% 2004 3.5% 4.2% 4.9% 2005 3.5% 4.2% 4.9% 6% 2006 3.5% 4.2% 4.9% 2007 3.5% 4.2% 4.9% 5% 2008 3.5% 4.2% 4.9% 4% 2009 3.5% 4.2% 4.9% 2010 3.5% 4.2% 4.9% 3% 2011 3.5% 4.2% 4.9% 2012 3.5% 4.2% 4.9% 2% 2013 3.5% 4.2% 4.9% 1% 2014 3.5% 4.2% 4.9% 2015 3.5% 4.2% 4.9% 0% 2016 3.5% 4.2% 4.9% 2017 3.5% 4.2% 4.9% 2018 3.5% 4.2% 4.9% Sources: (1) PwC (2) MINGO (3) PwC 2019 3.5% 4.2% 4.9% 2020 3.5% 4.2% 4.9% Sources: (1) PwC (2) MINGO (3) PwC Figure A6.4.5: Forecast Population

yoy growth

0.20%

4,200

0.00%

Source: Hrvoje Požar 2001

31 December 2004

2020

4,300 2018

0.40%

2016

4,400

2014

0.60%

2012

4,500

2010

0.80%

2008

4,600

2006

1.00%

2004

4,700

2002

1.20%

2000

4,800

Pop ('000) ytd growth yoy growth 2000 4,437 2001 4,437 0.00% 2002 4,462 0.55% 2003 4,486 0.0% 0.55% 2004 4,511 0.5% 0.55% 2005 4,560 1.6% 1.09% 2006 4,573 1.9% 0.29% 2007 4,587 2.2% 0.29% 2008 4,600 2.5% 0.29% 2009 4,614 2.8% 0.29% 2010 4,627 3.1% 0.29% 2011 4,642 3.5% 0.32% 2012 4,656 3.8% 0.31% 2013 4,671 4.1% 0.31% 2014 4,685 4.4% 0.31% 2015 4,700 4.8% 0.31% 2016 4,711 5.0% 0.24% 2017 4,722 5.3% 0.24% 2018 4,734 5.5% 0.24% 2019 4,745 5.8% 0.24% 2020 4,756 6.0% 0.24% Source: Hrvoje Požar 2001 [3]

Page 69 of 160

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

10,000 5,000 2006

2003

0

Source: PwC

GDP per Capita (95 US$) 2002 5,619 2003 5,855 2004 6,101 2005 6,357 2006 6,624 2007 6,902 2008 7,192 2009 7,494 2010 7,809 2011 8,137 2012 8,479 2013 8,835 2014 9,206 2015 9,593 2016 9,995 2017 10,415 2018 10,853 2019 11,308 2020 11,783 Source: PwC Year

31 December 2004

LF% 66.4% 66.4%

66.4%

66.4%

2018

15,000

2015

20,000

2012

25,000

2009

System Peak Demand

Gross Consumption GWh

30,000

Figure A6.4.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 15,228 2,617 GWh MW 2004 15,755 2005 16,386 2,817 2006 16,908 5000 2007 17,444 4500 2008 17,995 4000 2009 18,562 3500 2010 19,145 3,290 3000 2011 19,749 2500 2012 20,369 2000 2013 21,007 1500 2014 21,663 1000 2015 22,336 3,838 500 2016 23,010 0 2017 23,703 2018 24,413 2019 25,142 2020 25,889 4,448 Source: PwC Figure A6.4.7: Case 2 Economic Model Forecast Calculation Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 5.2% 0.50 2,827 4,462 12,615 4.2% 0.50 2,915 4,486 13,076 4.2% 0.49 3,011 4,511 13,582 4.2% 0.49 3,110 4,560 14,182 4.2% 0.48 3,212 4,573 14,691 4.2% 0.48 3,318 4,587 15,218 4.2% 0.48 3,426 4,600 15,761 4.2% 0.47 3,538 4,614 16,323 4.2% 0.47 3,653 4,627 16,903 4.2% 0.46 3,772 4,642 17,507 4.2% 0.46 3,894 4,656 18,131 4.2% 0.45 4,020 4,671 18,775 4.2% 0.45 4,149 4,685 19,440 4.2% 0.45 4,282 4,700 20,126 4.2% 0.44 4,419 4,711 20,820 4.2% 0.44 4,560 4,722 21,535 4.2% 0.43 4,705 4,734 22,273 4.2% 0.43 4,855 4,745 23,034 4.2% 0.43 5,008 4,756 23,818

Page 70 of 160

66.4%

D&T Gross Losses Consumpt (%) (GWh) 14.1% 14,691 14.1% 15,228 13.8% 15,755 13.5% 16,386 13.1% 16,908 12.8% 17,444 12.4% 17,995 12.1% 18,562 11.7% 19,145 11.4% 19,749 11.0% 20,369 10.6% 21,007 10.3% 21,663 9.9% 22,336 9.5% 23,010 9.1% 23,703 8.8% 24,413 8.4% 25,142 8.0% 25,889

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Figure A6.4.8: Comparison with other Forecasts

Case 2 PwC HEP [4]

Case 1 PwC RS [3]

Case 3 PwC ES [3]

Gross Consumption (GWh)

35,000 30,000 25,000 20,000 15,000 10,000 5,000

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, HEP 2003 [4], Hrvoje Požar 2001 [3] Case 2 Case 1 Case 3 HEP [4] GWh 2000 13,836 2001 14,455 2002 14,691 2003 15,228 15,228 15,228 2004 15,755 15,649 15,861 16,167 2005 16,386 16,167 16,607 16,500 2006 16,908 16,569 17,251 16,973 2007 17,444 16,980 17,917 17,500 2008 17,995 17,399 18,608 18,200 2009 18,562 17,826 19,323 18,850 2010 19,145 18,262 20,063 19,500 2011 19,749 18,712 20,835 20,200 2012 20,369 19,170 21,635 20,900 2013 21,007 19,638 22,462 21,550 2014 21,663 20,114 23,318 22,110 2015 22,336 20,600 24,204 22,790 2016 23,010 21,080 25,103 23,410 2017 23,703 21,568 26,032 24,000 2018 24,413 22,065 26,992 24,430 2019 25,142 22,571 27,984 25,000 2020 25,889 23,086 29,010 25,640 Source: PwC 2004, HEP 2003 [4], Hrvoje Požar 2001 [3] 31 December 2004

Page 71 of 160

RS [3] 14,125 14,393 14,665 14,942 15,225 15,658 16,103 16,560 17,031 17,515 17,897 18,288 18,687 19,095 19,511 19,823 20,139 20,461 20,788 21,120

ES [3] 14,105 14,351 14,601 14,856 15,115 15,503 15,901 16,309 16,728 17,158 17,501 17,851 18,207 18,571 18,943 19,173 19,406 19,642 19,881 20,122

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Figure A6.4.9: Forecast Final Demand per Capita

5,000

yoy growth

30,000

7%

25,000

6% 5%

20,000

4%

15,000

3%

10,000

2%

5,000

1%

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

0% 2000

-

Annual Growth

Final Demand (GWh)

GWh

2018

Source: PwC

2000

-

2015

1,000

2012

2,000

2009

3,000

2006

4,000

2003

Annual Growth

Final demand kWh/capita

6,000

kWh/cap ytd growth yoy growth 2000 2,665 kWh/cap yoy growth 2001 2,682 0.6% 2002 2,827 5.4% 2003 2,915 0.0% 3.1% 6% 2004 3,011 3.3% 3.3% 2005 3,110 6.7% 3.3% 5% 2006 3,212 10.2% 3.3% 4% 2007 3,318 13.8% 3.3% 2008 3,426 17.6% 3.3% 3% 2009 3,538 21.4% 3.3% 2010 3,653 25.3% 3.3% 2% 2011 3,772 29.4% 3.2% 2012 3,894 33.6% 3.2% 1% 2013 4,020 37.9% 3.2% 0% 2014 4,149 42.4% 3.2% 2015 4,282 46.9% 3.2% 2016 4,419 51.6% 3.2% 2017 4,560 56.5% 3.2% 2018 4,705 61.4% 3.2% 2019 4,855 66.6% 3.2% 2020 5,008 71.8% 3.2% Source: PwC Figure A6.4.10: Forecast Final Net Demand GWh ytd growth yoy growth 2000 11,824 2001 11,900 0.6% 2002 12,615 6.0% 2003 13,076 0.0% 3.7% 2004 13,582 3.9% 3.9% 2005 14,182 8.5% 4.4% 2006 14,691 12.4% 3.6% 2007 15,218 16.4% 3.6% 2008 15,761 20.5% 3.6% 2009 16,323 24.8% 3.6% 2010 16,903 29.3% 3.6% 2011 17,507 33.9% 3.6% 2012 18,131 38.7% 3.6% 2013 18,775 43.6% 3.6% 2014 19,440 48.7% 3.5% 2015 20,126 53.9% 3.5% 2016 20,820 59.2% 3.4% 2017 21,535 64.7% 3.4% 2018 22,273 70.3% 3.4% 2019 23,034 76.2% 3.4% 2020 23,818 82.1% 3.4% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.4.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 10.5% 9.2% 9.2% 7.6% 7.2% 7.3% 7.8% 7.8% 7.5% 7.9% 8.2% 9.6% 2001 9.4% 8.4% 8.5% 8.0% 7.2% 7.1% 7.8% 7.8% 7.6% 8.0% 9.2% 11.0% 2002 10.5% 8.7% 8.6% 8.0% 7.3% 7.3% 8.1% 7.8% 7.5% 8.1% 8.3% 9.9% 2003 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2004 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2005 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2006 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2007 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2008 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2009 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2010 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2011 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2012 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2013 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2014 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2015 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2016 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2017 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2018 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2019 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% 2020 9.6% 9.1% 8.8% 7.8% 7.2% 7.5% 8.1% 8.1% 7.4% 8.4% 8.4% 9.8% Source: PwC 31 December 2004

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Figure A6.4.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 100.0% 88.8% 84.7% 76.1% 65.3% 68.4% 70.3% 70.5% 71.1% 75.4% 83.5% 2001 2002 2003 98.5% 98.4% 89.1% 88.9% 71.5% 77.6% 79.3% 80.8% 77.1% 90.9% 90.2% 2005 98.6% 99.8% 90.9% 84.2% 74.6% 76.6% 80.0% 80.3% 79.9% 88.4% 93.0% 2010 98.6% 99.8% 90.9% 84.1% 74.3% 76.7% 80.1% 80.4% 80.1% 88.6% 93.1% 2015 98.6% 99.8% 90.9% 84.1% 74.3% 76.7% 80.1% 80.4% 80.1% 88.6% 93.0% 2020 98.6% 99.9% 91.0% 84.1% 74.4% 76.7% 80.1% 80.4% 80.1% 88.6% 93.1% Source: PwC

31 December 2004

Page 74 of 160

Dec 92.7% 100.0% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.4.13: 3rd Wed January Daily Profiles

2003

4,500

2005

2010

2015

2020

4,000

Demand (MW)

3,500 3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 1,823 1,670 1,592 1,556 1,571 1,687 2,008 2,365 2,556 2,601 2,606 2,593 2,543 2,489 2,371 2,335 2,393 2,614 2,661 2,640 2,560 2,473 2,281 2,023

31 December 2004

2001 -

2002 -

2003 1,900 1,733 1,624 1,582 1,593 1,720 2,033 2,274 2,398 2,399 2,349 2,289 2,226 2,164 2,098 2,064 2,185 2,474 2,507 2,504 2,456 2,466 2,340 2,134

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2005 2,005 1,828 1,713 1,669 1,681 1,815 2,145 2,399 2,530 2,531 2,478 2,415 2,348 2,283 2,213 2,178 2,305 2,610 2,645 2,642 2,591 2,602 2,469 2,251

2010 2,343 2,137 2,002 1,951 1,964 2,121 2,507 2,804 2,957 2,958 2,896 2,822 2,745 2,668 2,587 2,545 2,694 3,050 3,091 3,087 3,028 3,041 2,885 2,631

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 2,732 2,492 2,335 2,275 2,291 2,473 2,923 3,270 3,448 3,450 3,378 3,292 3,201 3,112 3,017 2,968 3,142 3,558 3,605 3,601 3,532 3,546 3,365 3,069

2020 3,167 2,889 2,707 2,637 2,656 2,867 3,389 3,791 3,997 3,999 3,916 3,816 3,711 3,607 3,497 3,441 3,642 4,124 4,179 4,174 4,094 4,111 3,901 3,557

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Figure A6.4.14: 3rd Wed April Daily Profiles

2003

4,000

2005

2010

2015

2020

3,500

Demand (MW)

3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 1,122 1,044 993 965 993 1,079 1,264 1,508 1,642 1,648 1,641 1,689 1,655 1,587 1,540 1,478 1,441 1,396 1,388 1,472 1,766 1,733 1,568 1,340

31 December 2004

2001 -

2002 -

2003 1,516 1,379 1,285 1,247 1,255 1,386 1,675 1,883 1,955 1,927 1,865 1,878 1,879 1,788 1,720 1,678 1,668 1,710 1,667 1,799 2,049 2,019 1,934 1,733

Page 76 of 160

2005 1,602 1,458 1,358 1,318 1,327 1,465 1,770 1,990 2,066 2,037 1,971 1,985 1,986 1,890 1,818 1,774 1,763 1,807 1,762 1,902 2,166 2,134 2,044 1,832

2010 1,869 1,700 1,584 1,538 1,547 1,709 2,065 2,322 2,411 2,376 2,300 2,316 2,317 2,205 2,121 2,069 2,057 2,108 2,055 2,218 2,526 2,489 2,385 2,137

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 2,180 1,983 1,848 1,793 1,805 1,993 2,409 2,708 2,811 2,771 2,682 2,701 2,702 2,571 2,473 2,413 2,399 2,459 2,397 2,587 2,946 2,903 2,781 2,492

2020 2,527 2,299 2,142 2,079 2,092 2,310 2,792 3,139 3,259 3,212 3,109 3,131 3,132 2,981 2,867 2,797 2,781 2,851 2,779 2,999 3,416 3,366 3,224 2,889

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Figure A6.4.15: 3rd Wed Jul Daily Profiles

2003

3,500

2005

2010

2015

2020

Demand (MW)

3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 1,285 1,182 1,121 1,089 1,105 1,129 1,302 1,519 1,689 1,718 1,775 1,826 1,832 1,747 1,722 1,636 1,607 1,566 1,579 1,581 1,675 1,801 1,712 1,472

31 December 2004

2001 -

2002 -

2003 1,466 1,302 1,224 1,184 1,207 1,213 1,407 1,648 1,801 1,851 1,885 1,959 1,983 1,932 1,867 1,803 1,788 1,764 1,773 1,851 1,859 1,989 1,967 1,715

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2005 1,545 1,373 1,290 1,248 1,272 1,279 1,483 1,737 1,899 1,951 1,987 2,065 2,090 2,037 1,968 1,901 1,885 1,860 1,869 1,951 1,960 2,097 2,074 1,808

2010 1,808 1,605 1,509 1,460 1,488 1,496 1,735 2,032 2,221 2,282 2,324 2,415 2,445 2,382 2,302 2,223 2,205 2,175 2,186 2,282 2,292 2,452 2,425 2,115

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 2,108 1,872 1,760 1,703 1,736 1,744 2,023 2,370 2,590 2,662 2,711 2,817 2,852 2,778 2,685 2,593 2,571 2,537 2,550 2,662 2,673 2,860 2,829 2,466

2020 2,444 2,170 2,040 1,974 2,012 2,022 2,345 2,747 3,002 3,086 3,142 3,266 3,306 3,221 3,112 3,006 2,981 2,941 2,956 3,086 3,099 3,316 3,279 2,859

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Figure A6.4.16: 3rd Wed Oct Daily Profiles

2003

3,500

2005

2010

2015

2020

Demand (MW)

3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 1,203 1,130 1,088 1,066 1,089 1,189 1,527 1,792 1,887 1,857 1,824 1,838 1,772 1,672 1,608 1,590 1,589 1,649 1,921 2,006 1,898 1,767 1,575 1,384

31 December 2004

2001 -

2002 -

2003 1,344 1,252 1,170 1,178 1,189 1,326 1,664 1,910 1,973 1,964 1,927 1,917 1,902 1,822 1,764 1,720 1,720 1,743 2,012 2,213 2,168 1,958 1,854 1,633

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2005 1,317 1,227 1,147 1,154 1,165 1,299 1,631 1,872 1,934 1,925 1,888 1,879 1,864 1,786 1,729 1,686 1,686 1,708 1,972 2,169 2,125 1,919 1,817 1,600

2010 1,415 1,318 1,232 1,240 1,252 1,396 1,752 2,011 2,078 2,068 2,029 2,019 2,003 1,919 1,857 1,811 1,811 1,835 2,119 2,330 2,283 2,062 1,952 1,720

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,657 1,544 1,443 1,452 1,466 1,635 2,052 2,355 2,433 2,422 2,376 2,364 2,345 2,247 2,175 2,121 2,121 2,149 2,481 2,729 2,673 2,414 2,286 2,013

2020 1,933 1,800 1,682 1,694 1,710 1,907 2,393 2,747 2,837 2,824 2,771 2,757 2,735 2,620 2,537 2,473 2,473 2,506 2,893 3,182 3,118 2,816 2,666 2,348

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Figure A6.4.17: Peak Hourly Demand Daily Profiles

12/25/03

5,000

12/24/05

12/24/10

12/24/15

12/23/20

4,500

Demand (MW)

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/26/00 1,823 1,670 1,592 1,556 1,571 1,687 2,008 2,365 2,556 2,601 2,606 2,593 2,543 2,489 2,371 2,335 2,393 2,614 2,661 2,640 2,560 2,473 2,281 2,023

31 December 2004

1/0/00 -

1/0/00 -

12/25/03 1,856 1,690 1,607 1,572 1,596 1,725 1,934 2,290 2,414 2,521 2,479 2,454 2,406 2,314 2,267 2,258 2,376 2,632 2,609 2,609 2,558 2,584 2,418 2,165

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12/24/05 1,987 1,809 1,720 1,683 1,708 1,846 2,070 2,451 2,584 2,699 2,654 2,627 2,575 2,477 2,427 2,417 2,543 2,817 2,793 2,793 2,738 2,766 2,588 2,317

12/24/10 2,320 2,113 2,009 1,965 1,995 2,157 2,418 2,863 3,018 3,152 3,099 3,068 3,008 2,893 2,834 2,823 2,970 3,290 3,262 3,262 3,198 3,230 3,023 2,707

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/24/15 2,707 2,465 2,344 2,293 2,328 2,516 2,820 3,340 3,521 3,677 3,615 3,579 3,509 3,375 3,306 3,293 3,465 3,838 3,805 3,805 3,731 3,768 3,526 3,157

12/23/20 3,136 2,856 2,716 2,657 2,697 2,915 3,268 3,870 4,079 4,260 4,189 4,147 4,066 3,910 3,831 3,816 4,015 4,448 4,409 4,409 4,323 4,367 4,086 3,659

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Figure A6.4.18: Minimum Hourly Demand Daily Profiles

5/26/03

3,000

5/25/05

5/25/10

5/25/15

5/24/20

Demand (MW)

2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

4/24/00 1,074 982 905 883 856 878 898 1,027 1,189 1,294 1,358 1,378 1,312 1,178 1,107 1,024 990 983 970 1,061 1,339 1,341 1,251 1,111

31 December 2004

1/0/00 -

1/0/00 -

5/26/03 1,265 1,117 1,053 1,015 1,011 990 1,034 1,176 1,309 1,415 1,507 1,549 1,502 1,382 1,296 1,234 1,199 1,195 1,232 1,294 1,522 1,643 1,621 1,379

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5/25/05 1,344 1,186 1,118 1,078 1,074 1,052 1,098 1,249 1,390 1,503 1,601 1,645 1,595 1,468 1,377 1,311 1,274 1,269 1,309 1,374 1,617 1,745 1,722 1,465

5/25/10 1,565 1,382 1,303 1,256 1,251 1,225 1,279 1,455 1,619 1,750 1,864 1,916 1,858 1,710 1,603 1,526 1,483 1,478 1,524 1,601 1,883 2,032 2,005 1,706

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/25/15 1,825 1,612 1,519 1,465 1,459 1,429 1,492 1,697 1,889 2,042 2,175 2,235 2,167 1,994 1,870 1,781 1,730 1,724 1,778 1,867 2,196 2,371 2,339 1,990

5/24/20 2,116 1,869 1,762 1,698 1,691 1,656 1,730 1,967 2,190 2,367 2,521 2,591 2,513 2,312 2,168 2,064 2,006 1,999 2,061 2,165 2,546 2,749 2,712 2,307

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10

Appendix 6.5 UNMIK Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for UNMIK was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.5.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 2,059 130 506 636 2,695 23.6% 1992 1,705 109 465 574 2,279 25.2% 1993 1,830 114 448 562 2,392 23.5% 1994 1,838 119 548 667 2,505 26.6% 1995 1,985 131 635 766 2,751 27.8% 1996 2,275 147 728 875 3,150 27.8% 1997 2,394 158 786 944 3,338 28.3% 1998 1,962 147 877 1,024 2,986 34.3% 1999 1,812 150 850 1,000 2,812 35.6% 2000 1,436 379 1,054 1,433 2,869 49.9% 2,073 2001 3,345 2,096 800 2002 3,546 2,119 839 2003 3,746 2,142 876 Sources: (1)KEK (2) UNMIK/OSCE (1) Net Demand GWh

Gross

Net

4,000

Consumption GWh

3,500 3,000 2,500 2,000 1,500

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1,000

Source: KEK

31 December 2004

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Figure A6.5.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1991 799 1992 845 1993 1,192 1994 1,291 1995 1,319 1996 1,350 1997 1,329 1998 1,171 1999 1,092 2000 1,042 2001 2002 2003 Source: KEK

Industry Demand GWh 1,076 689 450 382 479 707 835 595 535 260 -

Other Demand GWh 184 171 188 165 187 218 230 196 185 134 -

Total Net Demand GWh 2,059 1,705 1,830 1,838 1,985 2,275 2,394 1,962 1,812 1,436 -

Domestic

Domestic Demand Growth

Industry Demand Growth

5.4% 29.1% 7.7% 2.1% 2.3% -1.6% -13.5% -7.2% -4.8% -

Industry

Other Demand Growth

-56.2% -53.1% -17.8% 20.3% 32.2% 15.3% -40.3% -11.2% -105.8% -

-7.6% 9.0% -13.9% 11.8% 14.2% 5.2% -17.3% -5.9% -38.1% -

Total Net Demand Growth -20.8% 6.8% 0.4% 7.4% 12.7% 5.0% -22.0% -8.3% -26.2% -

Other

3,000

Consumption GWh

2,500 2,000 1,500 1,000 500

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Source: KEK

31 December 2004

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Figure A6.5.3: Historical System Load Factor Gross Demand GWh 1990 1991 2,695 1992 2,279 1993 2,392 1994 2,505 1995 2,751 1996 3,150 1997 3,338 1998 2,986 1999 2,812 2000 2,869 2001 3,345 2002 3,546 2003 3,746 Source: KEK

Auxilliary Demand GWh -

Pumping Demand GWh -

Gross Consump GWh 2,695 2,279 2,392 2,505 2,751 3,150 3,338 2,986 2,812 2,869 3,345 3,546 3,746

Gross Consmp Growth 0.0% -15.4% 5.0% 4.7% 9.8% 14.5% 6.0% -10.5% -5.8% 2.0% 16.6% 6.0% 5.6%

System Peak MW 763 723 759

System Peak Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -5.2% 5.0%

System Load Factor

50.0% 56.0% 56.3%

60% 58% 54%

46% 44% 42%

31 December 2004

Page 84 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

48%

-0.15436 0.049583 0.047241 0.098204 0.145038 0.059683 -0.105452 -0.058272 0.02027 0.16576 0.060318 -0.052425 0.056363 0.049793 2002

50%

2001

52%

2000

System Load Factor

56%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

9% 8% 7% 6% 5% 4% 3% 2% 1% 0%

Figure A6.5.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 4.5% 4.5% 4.5% 2002 4.5% 4.5% 4.5% Case 1 Case 3 Case 2 2003 5.5% 5.5% 5.5% 2004 3.0% 5.0% 8.0% 2005 3.0% 5.0% 8.0% 2006 3.0% 5.0% 8.0% 2007 3.0% 5.0% 8.0% 2008 3.0% 5.0% 8.0% 2009 3.0% 5.0% 8.0% 2010 3.0% 5.0% 8.0% 2011 3.0% 5.0% 8.0% 2012 3.0% 5.0% 8.0% 2013 3.0% 5.0% 8.0% 2014 3.0% 5.0% 8.0% 2015 3.0% 5.0% 8.0% 2016 3.0% 5.0% 8.0% 2017 3.0% 5.0% 8.0% 2018 3.0% 5.0% 8.0% Source: ESTAP [6] 2019 3.0% 5.0% 8.0% 2020 3.0% 5.0% 8.0% Source: ESTAP [6] Figure A6.5.5: Forecast Population

yoy growth

0.20%

-

0.00% Source: ESTAP [6]

31 December 2004

2020

500 2018

0.40%

2016

1,000

2014

0.60%

2012

1,500

2010

0.80%

2008

2,000

2006

1.00%

2004

2,500

2002

1.20%

2000

3,000

Pop ('000) ytd growth yoy growth 2000 2,073 2001 2,096 1.10% 2002 2,119 1.10% 2003 2,142 0.0% 1.10% 2004 2,166 1.1% 1.10% 2005 2,190 2.2% 1.10% 2006 2,214 3.3% 1.10% 2007 2,238 4.5% 1.10% 2008 2,263 5.6% 1.10% 2009 2,287 6.8% 1.10% 2010 2,313 8.0% 1.10% 2011 2,338 9.1% 1.10% 2012 2,364 10.3% 1.10% 2013 2,390 11.6% 1.10% 2014 2,416 12.8% 1.10% 2015 2,443 14.0% 1.10% 2016 2,470 15.3% 1.10% 2017 2,497 16.6% 1.10% 2018 2,524 17.8% 1.10% 2019 2,552 19.1% 1.10% 2020 2,580 20.4% 1.10% Source: ESTAP [6]

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9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

Figure A6.5.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 4,581 944 GWh MW 2004 5,132 2005 6,019 1,179 2006 6,092 1600 2007 6,534 1400 2008 6,616 1200 2009 6,702 1000 2010 6,735 1,265 2011 6,779 800 2012 6,833 600 2013 6,896 400 2014 6,969 2015 7,050 1,247 200 2016 7,191 0 2017 7,337 2018 7,487 2019 7,641 2020 7,800 1,384 Source: PwC Figure A6.5.7: Case 2 Economic Model Forecast Calculation

LF% 55.4% 58.3%

60.8%

64.5%

2003 2005 2007 2009 2011 2013 2015 2017 2019

System Peak Demand

Gross Consumption GWh

3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

Source: PwC

GDP per Capita (95 US$) 2002 595 2003 621 2004 649 2005 685 2006 719 2007 755 2008 793 2009 833 2010 874 2011 918 2012 964 2013 1,012 2014 1,063 2015 1,116 2016 1,172 2017 1,230 2018 1,292 2019 1,356 2020 1,424 Source: PwC Year

31 December 2004

Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 7.0% 1.41 839 2,119 3,574 4.5% 1.41 876 2,142 3,573 4.5% 1.39 902 2,166 4,022 5.5% 1.37 938 2,190 4,741 5.0% 1.35 969 2,214 4,822 5.0% 1.33 1,002 2,238 5,198 5.0% 1.31 1,036 2,263 5,289 5.0% 1.29 1,070 2,287 5,384 5.0% 1.26 1,106 2,313 5,438 5.0% 1.24 1,142 2,338 5,501 5.0% 1.22 1,179 2,364 5,573 5.0% 1.20 1,217 2,390 5,654 5.0% 1.18 1,256 2,416 5,742 5.0% 1.16 1,296 2,443 5,839 5.0% 1.14 1,336 2,470 5,987 5.0% 1.12 1,378 2,497 6,140 5.0% 1.10 1,420 2,524 6,299 5.0% 1.08 1,462 2,552 6,462 5.0% 1.06 1,506 2,580 6,631

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64.3%

D&T Gross Losses Consumpt (%) (GWh) 19.1% 4,418 22.0% 4,581 21.6% 5,132 21.2% 6,019 20.8% 6,092 20.5% 6,534 20.1% 6,616 19.7% 6,702 19.3% 6,735 18.8% 6,779 18.4% 6,833 18.0% 6,896 17.6% 6,969 17.2% 7,050 16.7% 7,191 16.3% 7,337 15.9% 7,487 15.4% 7,641 15.0% 7,800

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Figure A6.5.8: Comparison with other Forecasts

Case 2 PwC ESTAP MG

Case 1 PwC ESTAP HG

Case 3 PwC

Gross Consumption (GWh)

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, ESTAP 2002 [6] Case 2 Case 1 Case 3 GWh 2000 2001 4,027 2002 4,418 2003 4,581 4,581 4,581 2004 5,132 4,969 5,116 2005 6,019 5,696 5,985 2006 6,092 5,636 6,119 2007 6,534 5,958 6,628 2008 6,616 5,927 6,779 2009 6,702 5,909 6,942 2010 6,735 5,847 7,064 2011 6,779 5,803 7,201 2012 6,833 5,776 7,353 2013 6,896 5,762 7,519 2014 6,969 5,762 7,700 2015 7,050 5,773 7,894 2016 7,191 5,828 8,168 2017 7,337 5,891 8,453 2018 7,487 5,960 8,749 2019 7,641 6,036 9,057 2020 7,800 6,118 9,375 Source: PwC 2004, ESTAP 2002 [6] 31 December 2004

Page 87 of 160

ESTAP

3,292 3,343 3,590 3,725 3,861 3,996 4,131 4,271 4,455 4,638 4,821 5,005 5,147 5,337 5,534 5,737 5,949 6,168

ESTAP

3,409 3,507 3,777 4,028 4,280 4,531 4,782 4,994 5,337 5,678 6,020 6,362 6,519 6,850 7,199 7,564 7,949 8,353

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Figure A6.5.9: Forecast Final Demand per Capita

1,400 1,200

Source: PwC

2000

-

GWh

2018

200

2015

400

2012

600

2009

800

2006

1,000

2003

Annual Growth

Final demand kWh/capita

1,600

kWh/cap ytd growth yoy growth 2000 kWh/cap yoy growth 2001 800 2002 839 4.9% 2003 876 0.0% 4.5% 6% 2004 902 3.0% 3.0% 2005 938 7.0% 3.9% 5% 2006 969 10.7% 3.4% 4% 2007 1,002 14.4% 3.4% 2008 1,036 18.2% 3.4% 3% 2009 1,070 22.2% 3.3% 2010 1,106 26.2% 3.3% 2% 2011 1,142 30.4% 3.3% 2012 1,179 34.6% 3.3% 1% 2013 1,217 38.9% 3.2% 0% 2014 1,256 43.4% 3.2% 2015 1,296 47.9% 3.2% 2016 1,336 52.5% 3.1% 2017 1,378 57.2% 3.1% 2018 1,420 62.0% 3.1% 2019 1,462 66.9% 3.0% 2020 1,506 71.9% 3.0% Source: PwC Figure A6.5.10: Forecast Final Net Demand

yoy growth 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2%

6,000 5,000 4,000 3,000 2,000 1,000

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

2000

-

Annual Growth

Final Demand (GWh)

7,000

GWh ytd growth yoy growth 2000 2001 3,257 2002 3,574 9.7% 2003 3,573 0.0% 0.0% 2004 4,022 12.6% 12.6% 2005 4,741 32.7% 17.9% 2006 4,822 35.0% 1.7% 2007 5,198 45.5% 7.8% 2008 5,289 48.0% 1.7% 2009 5,384 50.7% 1.8% 2010 5,438 52.2% 1.0% 2011 5,501 54.0% 1.2% 2012 5,573 56.0% 1.3% 2013 5,654 58.2% 1.4% 2014 5,742 60.7% 1.6% 2015 5,839 63.4% 1.7% 2016 5,987 67.6% 2.5% 2017 6,140 71.9% 2.6% 2018 6,299 76.3% 2.6% 2019 6,462 80.9% 2.6% 2020 6,631 85.6% 2.6% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.5.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 2001 10.6% 9.9% 9.2% 8.8% 7.3% 6.5% 6.6% 6.0% 6.4% 8.0% 8.9% 2002 11.3% 9.7% 10.3% 9.6% 7.7% 6.8% 6.0% 5.5% 6.2% 8.0% 9.0% 2003 10.6% 9.7% 9.3% 8.2% 6.6% 6.2% 6.4% 6.2% 7.0% 8.1% 10.0% 2004 10.6% 9.7% 9.3% 8.2% 6.6% 6.2% 6.4% 6.2% 7.0% 8.1% 10.0% 2005 10.0% 9.7% 9.6% 8.2% 6.7% 6.6% 7.0% 7.0% 6.8% 8.2% 9.2% 2006 10.0% 9.7% 9.6% 8.2% 6.7% 6.6% 7.0% 7.0% 6.8% 8.2% 9.2% 2007 10.0% 9.7% 9.6% 8.2% 6.7% 6.6% 7.0% 7.0% 6.8% 8.2% 9.2% 2008 9.9% 9.7% 9.5% 8.2% 6.7% 6.7% 7.1% 7.1% 6.9% 8.1% 9.1% 2009 9.8% 9.6% 9.5% 8.2% 6.7% 6.8% 7.3% 7.3% 6.9% 8.1% 9.1% 2010 9.7% 9.5% 9.5% 8.2% 6.7% 6.9% 7.4% 7.4% 6.9% 8.1% 9.0% 2011 9.5% 9.5% 9.4% 8.2% 6.7% 7.1% 7.6% 7.5% 6.9% 8.1% 8.9% 2012 9.4% 9.4% 9.4% 8.2% 6.8% 7.2% 7.7% 7.7% 7.0% 8.1% 8.8% 2013 9.3% 9.3% 9.4% 8.2% 6.8% 7.3% 7.9% 7.8% 7.0% 8.1% 8.7% 2014 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2015 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2016 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2017 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2018 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2019 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2020 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% Source: PwC 31 December 2004

Page 89 of 160

Dec

Dec 11.7% 9.9% 11.6% 11.6% 11.1% 11.1% 11.1% 10.9% 10.8% 10.6% 10.5% 10.3% 10.2% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

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Figure A6.5.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 2001 81.1% 86.0% 78.9% 88.5% 73.8% 61.6% 58.3% 54.3% 61.6% 87.8% 82.2% 2002 100.0% 98.8% 96.5% 93.8% 76.9% 72.8% 65.7% 56.4% 71.1% 84.8% 90.6% 2003 99.1% 99.1% 83.0% 82.6% 66.9% 61.7% 62.5% 62.8% 71.3% 88.0% 89.9% 2005 90.0% 92.9% 90.3% 82.4% 60.9% 61.0% 60.2% 62.8% 66.4% 80.8% 84.6% 2010 90.7% 94.7% 93.1% 85.8% 63.8% 67.2% 66.7% 69.6% 69.9% 84.2% 85.3% 2015 91.0% 98.2% 97.5% 91.8% 68.2% 76.2% 76.6% 79.3% 75.5% 89.1% 87.4% 2020 91.1% 97.9% 97.5% 91.5% 68.0% 76.3% 76.7% 79.1% 75.2% 88.4% 87.0% Source: PwC

31 December 2004

Page 90 of 160

Dec 100.0% 94.9% 100.0% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.5.13: 3rd Wed January Daily Profiles

2003

1,400

2005

2010

2015

2020

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 509 502 492 480 458 469 504 518 508 521 534 523 535 516 509 523 536 521 533 544 529 554 548 517

2002 557 543 514 504 513 518 516 570 572 597 601 597 587 589 556 550 595 605 628 647 603 627 621 596

2003 491 443 465 450 449 448 486 524 490 440 368 409 329 347 422 397 367 417 364 382 391 373 385 419

Page 91 of 160

2005 878 768 716 695 678 692 766 847 911 925 940 923 909 922 921 919 971 994 982 988 982 963 962 921

2010 950 831 774 752 734 749 829 916 986 1,001 1,017 998 984 997 996 995 1,050 1,076 1,062 1,069 1,062 1,042 1,040 996

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 939 821 765 743 725 740 820 906 975 990 1,006 987 973 986 985 983 1,039 1,064 1,050 1,057 1,050 1,031 1,029 985

2020 1,043 913 851 826 806 823 911 1,007 1,083 1,100 1,118 1,097 1,081 1,096 1,095 1,093 1,154 1,182 1,167 1,175 1,167 1,145 1,143 1,095

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Figure A6.5.14: 3rd Wed April Daily Profiles

2003

1,200

2005

2010

2015

2020

Demand (MW)

1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 424 364 322 316 282 299 386 408 428 416 455 499 532 503 474 445 455 462 404 382 414 472 447 408

2002 328 281 262 251 260 257 342 424 494 516 495 469 441 373 373 394 520 550 568 589 586 575 468 434

2003 380 356 341 353 302 359 445 496 519 553 562 541 545 535 529 554 541 538 559 627 598 594 566 488

Page 92 of 160

2005 584 523 490 463 471 513 587 658 705 710 680 664 662 665 679 696 672 649 654 747 790 775 718 656

2010 653 585 548 518 526 573 657 736 788 793 760 742 740 743 759 777 751 725 731 835 884 866 803 733

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 688 616 577 546 555 604 692 775 830 836 801 782 780 783 800 819 792 764 770 880 931 912 846 772

2020 762 682 639 604 614 668 766 858 919 926 886 866 864 867 885 907 877 846 853 974 1,031 1,010 936 855

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Figure A6.5.15: 3rd Wed Jul Daily Profiles

2003

1,200

2005

2010

2015

2020

Demand (MW)

1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 239 197 173 173 186 185 258 302 386 388 360 369 328 322 356 338 320 313 302 322 376 373 368 318

2002 258 219 180 171 155 184 244 358 390 388 385 385 355 350 346 342 328 312 319 337 393 379 367 317

2003 268 221 200 173 181 207 270 346 398 417 419 317 427 321 377 352 2 58 117 141 211 224 277 299

Page 93 of 160

2005 515 464 440 418 417 433 483 542 586 613 645 648 641 652 650 639 632 606 595 597 643 673 651 602

2010 613 552 524 498 496 515 574 644 697 730 767 771 763 776 773 760 752 721 708 710 765 801 775 716

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 693 625 592 563 561 582 650 729 788 825 868 872 864 878 875 860 851 815 801 803 866 906 877 810

2020 771 695 659 626 624 647 722 810 876 918 965 970 960 976 972 956 946 906 890 893 962 1,007 975 900

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Figure A6.5.16: 3rd Wed Oct Daily Profiles

2003

1,200

2005

2010

2015

2020

Demand (MW)

1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 277 225 202 204 208 218 260 283 373 365 373 353 349 397 384 358 393 398 459 470 505 469 422 344

2002 320 284 250 233 230 247 304 344 433 445 428 419 455 428 418 410 410 431 420 438 457 413 416 370

2003 475 409 349 329 323 322 401 393 362 401 372 393 381 383 431 398 367 353 378 319 425 412 393 361

Page 94 of 160

2005 386 358 342 335 337 369 438 499 538 558 563 551 558 565 588 591 602 597 637 629 619 605 560 500

2010 512 474 453 444 447 489 581 661 713 739 746 730 740 748 779 783 798 790 844 834 820 801 742 662

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 572 530 507 497 499 547 649 738 797 826 834 817 827 836 870 875 892 884 943 932 917 896 830 740

2020 597 553 529 518 521 570 677 770 831 861 870 852 862 872 908 913 930 922 984 972 956 934 865 772

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Figure A6.5.17: Peak Hourly Demand Daily Profiles

12/24/03

1,600

12/29/05

12/29/10

12/29/15

12/28/20

1,400

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

12/31/01 640 596 544 527 519 536 546 626 693 683 671 690 717 615 678 663 709 719 748 763 737 699 688 698

1/1/02 676 685 645 593 535 503 509 549 567 614 617 646 670 660 648 678 704 649 645 648 713 723 672 632

12/24/03 621 552 517 501 485 505 535 657 734 753 759 747 714 704 707 724 748 713 711 694 707 696 677 641

Page 95 of 160

12/29/05 918 832 783 750 747 754 778 840 975 1,031 1,085 1,097 1,115 1,138 1,116 1,127 1,167 1,179 1,179 1,161 1,130 1,117 1,077 994

12/29/10 985 893 840 805 802 809 835 902 1,047 1,106 1,164 1,178 1,197 1,222 1,198 1,209 1,253 1,265 1,265 1,246 1,213 1,198 1,156 1,067

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/29/15 971 880 828 794 790 797 823 889 1,031 1,090 1,148 1,161 1,179 1,204 1,180 1,192 1,235 1,247 1,247 1,228 1,195 1,181 1,139 1,052

12/28/20 1,078 977 919 881 877 885 913 987 1,145 1,211 1,274 1,289 1,309 1,337 1,310 1,323 1,371 1,384 1,384 1,363 1,327 1,311 1,264 1,168

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Figure A6.5.18: Minimum Hourly Demand Daily Profiles

7/23/03

1,000

5/24/05

5/24/10

5/24/15

5/23/20

900

Demand (MW)

800 700 600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

2/26/01 353 339 335 334 384 427 441 501 507 512 465 517 554 525 550 577 573 604 618 634 646 624 582 550

7/9/02 253 213 188 152 178 187 164 192 234 310 243 34 76 99 138 352 395 398 357 378 376 393 418 350

7/23/03 268 221 200 173 181 207 270 346 398 417 419 317 427 321 377 352 2 58 117 141 211 224 277 299

Page 96 of 160

5/24/05 425 387 370 359 362 380 433 517 588 617 622 629 621 593 615 591 591 576 575 594 656 656 606 527

5/24/10 478 435 417 403 407 428 488 581 662 695 700 708 698 667 692 665 665 648 647 668 739 739 681 593

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/24/15 504 458 439 425 429 451 514 612 697 732 738 745 736 703 729 700 700 682 681 704 778 778 718 625

5/23/20 558 507 485 470 475 499 568 678 771 810 816 825 814 778 806 775 775 755 754 779 861 861 794 692

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2

Appendix 6.6 Macedonia Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for Macedonia was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.6.1: Historical Electricity Consumption (1) (1) (1) (1) (2) Net Transmis Distrib Total Gross All Losses Population Net Energy Demand Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh GWh Gross ('000) kWh/cap 1990 4,735 164.0 353.0 517.0 5,252 9.8% 1991 4,705 166 381 547 5,252 10.4% 1,903 2,472 1992 5,165 168 387 555 5,720 9.7% 1,929 2,677 1993 5,076 143 457 600 5,676 10.6% 1,962 2,587 1994 4,923 173 464 637 5,560 11.5% 1,983 2,482 1995 5,101 192 507 699 5,800 12.1% 1,986 2,568 1996 5,345 194 609 803 6,148 13.1% 1,993 2,682 1997 5,516 191 624 815 6,331 12.9% 2,002 2,755 1998 5,647 185 686 871 6,518 13.4% 2,015 2,802 1999 5,299 197 789 986 6,285 15.7% 2,032 2,607 2000 5,399 215 824 1,039 6,439 16.1% 2,041 2,645 2001 5,213 207 875 1,082 6,294 17.2% 2,046 2,547 2002 5,163 189 1,058 1,247 6,410 19.4% 2,055 2,513 2003 5,909 229 1,088 1,317 7,226 18.2% 2,063 2,864 Sources: (1) ESM (2) US Census Bureau

Gross

Net

7,500

Consumption GWh

7,000 6,500 6,000 5,500 5,000 4,500

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

4,000

Source: ESM

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Figure A6.6.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1,672 1991 1,863 1992 2,008 1993 2,186 1994 2,224 1995 2,382 1996 2,486 1997 2,509 1998 2,555 1999 2,631 2000 2,653 2001 2,599 2002 2,682 2003 2,901 Source: ESM

Industry Demand GWh 2,765 2,500 2,802 2,512 2,295 2,258 2,365 2,484 2,551 2,084 2,109 1,982 1,816 2,287

Other Demand GWh 298 342 355 378 404 461 494 523 540 584 637 632 665 721

Total Net Demand GWh 4,735 4,705 5,165 5,076 4,923 5,101 5,345 5,516 5,647 5,299 5,399 5,213 5,163 5,909

Domestic

Domestic Demand Growth

Industry Demand Growth

10.2% 7.3% 8.1% 1.7% 6.6% 4.2% 0.9% 1.8% 2.9% 0.8% -2.1% 3.1% 7.6%

Industry

-10.6% 10.8% -11.5% -9.5% -1.6% 4.5% 4.8% 2.6% -22.4% 1.2% -6.4% -9.1% 20.6%

Other Demand Growth

Total Net Demand Growth

12.9% 3.5% 6.1% 6.4% 12.4% 6.7% 5.5% 3.2% 7.5% 8.3% -0.8% 5.0% 7.7%

-0.7% 8.9% -1.8% -3.1% 3.5% 4.6% 3.1% 2.3% -6.6% 1.8% -3.6% -1.0% 12.6%

Other

7,000

Consumption GWh

6,000 5,000 4,000 3,000 2,000 1,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

-

Source: ESM

31 December 2004

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Figure A6.6.3: Historical System Load Factor Gross Demand GWh 1990 5,252 1991 5,252 1992 5,720 1993 5,676 1994 5,560 1995 5,800 1996 6,148 1997 6,331 1998 6,518 1999 6,285 2000 6,439 2001 6,294 2002 6,410 2003 7,226 Source: ESM

Auxilliary Demand GWh -

Pumping Demand GWh -

Gross Consump GWh 5,252 5,252 5,720 5,676 5,560 5,800 6,148 6,331 6,518 6,285 6,439 6,294 6,410 7,226

Gross Consmp Growth 0.0% 8.9% -0.8% -2.0% 4.3% 6.0% 3.0% 3.0% -3.6% 2.4% -2.2% 1.8% 12.7%

System Peak MW 925 989 1,035 988 1,041 1,081 1,149 1,121 1,221 1,214 1,233 1,261 1,320 1,417

System Peak Growth

-0.000124 0.089129 -0.007763 -0.020423 0.043211 0.060093 0.029643 0.029534 -0.035673 0.024422 -0.022415 0.018375 0.127295

0.069189 0.046512 -0.045411 0.053644 0.038425 0.062905 -0.024369 0.089206 -0.005733 0.015651 0.022709 0.046788 0.073485

6.9% 4.7% -4.5% 5.4% 3.8% 6.3% -2.4% 8.9% -0.6% 1.6% 2.3% 4.7% 7.3%

System Load Factor 64.8% 60.6% 63.1% 65.6% 61.0% 61.2% 61.1% 64.5% 60.9% 59.1% 59.6% 57.0% 55.4% 58.2%

70%

45%

31 December 2004

Page 100 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

50%

2002

55%

2001

60%

2000

System Load Factor

65%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.6.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 -4.7% -4.7% -4.7% 2002 0.7% 0.7% 0.7% Case 1 Case 3 Case 2 2003 3.0% 3.0% 3.0% 2004 3.8% 3.8% 3.8% 2005 4.5% 4.5% 4.5% 6% 2006 3.0% 4.0% 4.5% 2007 3.0% 4.0% 4.5% 4% 2008 3.0% 4.0% 4.5% 2% 2009 3.0% 4.0% 4.5% 2010 3.0% 4.0% 4.5% 0% 2011 3.0% 4.0% 4.5% 2012 3.0% 4.0% 4.5% -2% 2013 3.0% 4.0% 4.5% -4% 2014 3.0% 4.0% 4.5% 2015 3.0% 4.0% 4.5% -6% 2016 3.0% 4.0% 4.5% 2017 3.0% 4.0% 4.5% 2018 3.0% 4.0% 4.5% Sources: (1) PwC (2) PwC (3) PwC 2019 3.0% 4.0% 4.5% 2020 3.0% 4.0% 4.5% Sources: (1) PwC (2) PwC (3) PwC Figure A6.6.5: Forecast Population

yoy growth 0.45%

2,200

0.40% 2,150

0.35% 0.30%

2,100

0.25% 0.20%

2,050

0.15% 0.10%

2,000

0.05%

31 December 2004

2020

2018

2016

2014

Source: US Census Bureau

2012

2010

2008

2006

2004

2002

0.00% 2000

1,950

Pop ('000) ytd growth yoy growth 2000 2,041 2001 2,046 0.23% 2002 2,055 0.42% 2003 2,063 0.0% 0.41% 2004 2,071 0.4% 0.39% 2005 2,079 0.8% 0.38% 2006 2,087 1.1% 0.36% 2007 2,094 1.5% 0.36% 2008 2,101 1.8% 0.34% 2009 2,108 2.2% 0.33% 2010 2,115 2.5% 0.33% 2011 2,122 2.8% 0.32% 2012 2,128 3.2% 0.31% 2013 2,135 3.5% 0.30% 2014 2,141 3.8% 0.29% 2015 2,147 4.1% 0.27% 2016 2,152 4.3% 0.26% 2017 2,157 4.6% 0.24% 2018 2,162 4.8% 0.23% 2019 2,167 5.0% 0.21% 2020 2,171 5.2% 0.19% Source: US Census Bureau

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

4,000 2,000 2006

2003

0

Source: PwC

GDP per Capita (95 US$) 2002 2,434 2003 2,507 2004 2,602 2005 2,719 2006 2,828 2007 2,941 2008 3,058 2009 3,181 2010 3,308 2011 3,440 2012 3,578 2013 3,721 2014 3,870 2015 4,025 2016 4,186 2017 4,353 2018 4,527 2019 4,708 2020 4,897 Source: PwC Year

31 December 2004

LF% 58.2% 59.7%

64.4%

64.4%

2018

6,000

2015

8,000

2012

10,000

2009

System Peak Demand

Gross Consumption GWh

12,000

Figure A6.6.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 7,226 1,417 GWh MW 2004 7,146 2005 7,108 1,360 2006 7,542 2500 2007 7,558 2008 7,599 2000 2009 7,661 2010 7,744 1,373 1500 2011 7,960 2012 8,200 1000 2013 8,464 2014 8,750 500 2015 9,060 1,607 2016 9,394 0 2017 9,751 2018 10,131 2019 10,536 2020 10,965 1,946 Source: PwC Figure A6.6.7: Case 2 Economic Model Forecast Calculation Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 0.7% 1.03 2,513 2,055 5,163 3.0% 1.14 2,864 2,063 5,909 3.8% 1.10 2,859 2,071 5,921 4.5% 1.06 2,871 2,079 5,969 4.0% 1.02 2,897 2,087 6,419 4.0% 1.00 2,935 2,094 6,522 4.0% 0.98 2,985 2,101 6,648 4.0% 0.96 3,047 2,108 6,798 4.0% 0.94 3,118 2,115 6,971 4.0% 0.93 3,200 2,122 7,165 4.0% 0.92 3,292 2,128 7,381 4.0% 0.91 3,393 2,135 7,618 4.0% 0.91 3,504 2,141 7,876 4.0% 0.90 3,624 2,147 8,155 4.0% 0.90 3,754 2,152 8,455 4.0% 0.89 3,894 2,157 8,777 4.0% 0.89 4,044 2,162 9,119 4.0% 0.89 4,204 2,167 9,483 4.0% 0.89 4,374 2,171 9,869

Page 102 of 160

64.3%

D&T Gross Losses Consumpt (%) (GWh) 19.4% 6,410 18.2% 7,226 17.1% 7,146 16.0% 7,108 14.9% 7,542 13.7% 7,558 12.5% 7,599 11.3% 7,661 10.0% 7,744 10.0% 7,960 10.0% 8,200 10.0% 8,464 10.0% 8,750 10.0% 9,060 10.0% 9,394 10.0% 9,751 10.0% 10,131 10.0% 10,536 10.0% 10,965

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Figure A6.6.8: Comparison with other Forecasts

Case 2 PwC ESM 2001 [4]

Case 1 PwC Harza 2000 [5]

Case 3 PwC

Gross Consumption (GWh)

14,000 12,000 10,000 8,000 6,000 4,000 2,000

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, ESM 2001 [4], Harza 2000 [5] Case 2 Case 1 Case 3 ESM 2001 GWh 2000 6,439 2001 6,294 2002 6,410 6,888 2003 7,226 7,226 7,226 7,044 2004 7,146 7,086 7,177 7,202 2005 7,108 6,995 7,166 7,365 2006 7,542 7,373 7,628 7,594 2007 7,558 7,330 7,675 7,830 2008 7,599 7,309 7,748 8,074 2009 7,661 7,306 7,845 8,327 2010 7,744 7,320 7,966 8,588 2011 7,960 7,456 8,226 8,966 2012 8,200 7,609 8,513 9,363 2013 8,464 7,778 8,829 9,780 2014 8,750 7,963 9,173 10,216 2015 9,060 8,163 9,546 10,673 2016 9,394 8,378 9,947 2017 9,751 8,608 10,378 2018 10,131 8,851 10,840 2019 10,536 9,108 11,332 2020 10,965 9,378 11,857 Source: PwC 2004, ESM 2001 [4], Harza 2000 [5] 31 December 2004

Page 103 of 160

Harza 6,345 6,498 6,655 6,815 6,980 7,148 7,369 7,597 7,833 8,075 8,325 8,749 9,195 9,663 10,156 10,673 11,030 11,399 11,780 12,174 12,581

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5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -

GWh

2018

2015

2012

2009

2006

2003

2000

Source: PwC

kWh/cap ytd growth yoy growth 2000 2,645 kWh/cap yoy growth 2001 2,547 -3.7% 2002 2,513 -1.4% 2003 2,864 0.0% 14.0% 16% 2004 2,859 -0.2% -0.2% 14% 2005 2,871 0.2% 0.4% 12% 2006 2,897 1.1% 0.9% 10% 2007 2,935 2.5% 1.3% 8% 2008 2,985 4.2% 1.7% 6% 2009 3,047 6.4% 2.0% 4% 2010 3,118 8.9% 2.4% 2% 0% 2011 3,200 11.7% 2.6% -2% 2012 3,292 14.9% 2.9% -4% 2013 3,393 18.5% 3.1% -6% 2014 3,504 22.3% 3.3% 2015 3,624 26.5% 3.4% 2016 3,754 31.1% 3.6% 2017 3,894 36.0% 3.7% 2018 4,044 41.2% 3.8% 2019 4,204 46.8% 3.9% 2020 4,374 52.7% 4.0% Source: PwC Figure A6.6.10: Forecast Final Net Demand Annual Growth

Final demand kWh/capita

Figure A6.6.9: Forecast Final Demand per Capita

yoy growth 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6%

10,000 8,000 6,000 4,000 2,000

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

2000

-

Annual Growth

Final Demand (GWh)

12,000

GWh ytd growth yoy growth 2000 5,399 2001 5,213 -3.5% 2002 5,163 -0.9% 2003 5,909 0.0% 14.4% 2004 5,921 0.2% 0.2% 2005 5,969 1.0% 0.8% 2006 6,419 8.6% 7.6% 2007 6,522 10.4% 1.6% 2008 6,648 12.5% 1.9% 2009 6,798 15.0% 2.3% 2010 6,971 18.0% 2.5% 2011 7,165 21.3% 2.8% 2012 7,381 24.9% 3.0% 2013 7,618 28.9% 3.2% 2014 7,876 33.3% 3.4% 2015 8,155 38.0% 3.5% 2016 8,455 43.1% 3.7% 2017 8,777 48.5% 3.8% 2018 9,119 54.3% 3.9% 2019 9,483 60.5% 4.0% 2020 9,869 67.0% 4.1% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.6.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

13% 12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 11.5% 9.8% 9.4% 7.3% 6.8% 7.0% 7.1% 7.2% 7.1% 7.8% 8.8% 2001 10.4% 9.3% 8.3% 7.8% 6.8% 6.8% 7.1% 6.8% 7.0% 7.7% 9.8% 2002 11.4% 8.9% 8.7% 8.0% 6.8% 6.7% 7.0% 6.7% 6.9% 8.3% 9.4% 2003 10.0% 9.7% 9.6% 8.2% 6.7% 6.6% 7.0% 7.0% 6.8% 8.2% 9.2% 2004 9.9% 9.7% 9.5% 8.2% 6.7% 6.7% 7.1% 7.1% 6.9% 8.1% 9.1% 2005 9.8% 9.6% 9.5% 8.2% 6.7% 6.8% 7.3% 7.3% 6.9% 8.1% 9.1% 2006 9.7% 9.5% 9.5% 8.2% 6.7% 6.9% 7.4% 7.4% 6.9% 8.1% 9.0% 2007 9.5% 9.5% 9.4% 8.2% 6.7% 7.1% 7.6% 7.5% 6.9% 8.1% 8.9% 2008 9.4% 9.4% 9.4% 8.2% 6.8% 7.2% 7.7% 7.7% 7.0% 8.1% 8.8% 2009 9.3% 9.3% 9.4% 8.2% 6.8% 7.3% 7.9% 7.8% 7.0% 8.1% 8.7% 2010 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2011 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2012 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2013 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2014 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2015 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2016 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2017 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2018 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2019 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% 2020 9.2% 9.3% 9.4% 8.2% 6.8% 7.5% 8.0% 8.0% 7.0% 8.1% 8.6% Source: PwC 31 December 2004

Page 105 of 160

Dec

Dec 10.7% 12.2% 11.3% 11.1% 10.9% 10.8% 10.6% 10.5% 10.3% 10.2% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

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Figure A6.6.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 99.7% 90.0% 89.5% 79.8% 65.0% 66.8% 63.3% 67.3% 68.8% 80.5% 86.8% 2001 91.9% 92.9% 82.3% 80.6% 67.2% 63.6% 61.5% 62.5% 67.8% 80.6% 93.5% 2002 100.0% 86.2% 79.6% 76.5% 62.3% 58.1% 58.2% 60.7% 71.1% 78.5% 86.3% 2003 90.0% 92.9% 90.3% 82.4% 60.9% 61.0% 60.2% 62.8% 66.4% 80.8% 84.6% 2005 90.0% 93.9% 91.9% 84.6% 62.6% 64.8% 64.3% 66.9% 68.5% 82.6% 84.6% 2010 91.1% 98.0% 97.7% 91.6% 68.0% 76.5% 76.8% 79.2% 75.4% 88.6% 87.3% 2015 91.1% 97.9% 97.6% 91.8% 68.4% 76.4% 76.7% 79.1% 75.2% 88.1% 87.2% 2020 91.1% 97.9% 97.6% 91.8% 68.0% 76.3% 76.7% 79.1% 75.2% 88.3% 87.1% Source: PwC

31 December 2004

Page 106 of 160

Dec 100.0% 100.0% 98.6% 100.0% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.6.13: 3rd Wed January Daily Profiles

2003

1,800

2005

2010

2015

2020

1,600

Demand (MW)

1,400 1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 906 841 784 735 718 733 797 890 948 970 951 947 965 970 981 990 1,029 1,085 1,093 1,058 1,033 1,039 1,076 1,053

31 December 2004

2001 -

2002 953 865 783 750 736 753 852 922 975 1,024 1,029 1,009 1,027 1,041 1,064 1,059 1,084 1,115 1,092 1,081 1,076 1,057 1,029 993

2003 1,055 923 860 835 815 832 921 1,018 1,095 1,112 1,130 1,109 1,093 1,108 1,107 1,105 1,167 1,195 1,180 1,188 1,180 1,158 1,156 1,107

Page 107 of 160

2005 1,013 886 826 802 782 799 884 977 1,051 1,068 1,085 1,065 1,049 1,064 1,063 1,061 1,120 1,147 1,133 1,140 1,133 1,112 1,110 1,063

2010 1,035 905 844 819 800 816 904 999 1,074 1,091 1,109 1,088 1,072 1,087 1,086 1,084 1,145 1,172 1,158 1,165 1,158 1,136 1,134 1,086

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 1,211 1,060 987 959 936 955 1,057 1,169 1,257 1,277 1,297 1,273 1,255 1,272 1,271 1,269 1,340 1,372 1,355 1,364 1,355 1,329 1,327 1,271

2020 1,466 1,283 1,195 1,161 1,133 1,156 1,280 1,415 1,522 1,546 1,571 1,542 1,519 1,540 1,539 1,536 1,622 1,661 1,640 1,651 1,640 1,610 1,607 1,539

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Figure A6.6.14: 3rd Wed April Daily Profiles

2003

1,600

2005

2010

2015

2020

1,400

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 512 461 439 425 426 458 557 621 692 681 675 680 698 669 667 675 658 620 642 730 786 741 660 604

31 December 2004

2001 -

2002 576 517 470 469 467 471 583 689 763 754 717 764 749 757 775 772 732 718 722 819 854 799 761 705

2003 702 629 589 557 566 616 706 791 847 853 817 798 796 799 816 836 808 780 786 898 950 931 863 788

Page 108 of 160

2005 691 620 580 549 558 607 695 779 834 840 805 786 784 787 804 823 796 768 774 885 936 917 850 776

2010 756 677 634 600 610 663 760 852 912 919 880 859 857 861 879 900 870 840 847 967 1,023 1,003 929 849

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 887 794 744 703 715 778 892 999 1,070 1,077 1,032 1,008 1,005 1,009 1,031 1,056 1,021 985 993 1,134 1,200 1,176 1,090 995

2020 1,073 962 901 852 865 942 1,079 1,209 1,295 1,304 1,249 1,220 1,217 1,222 1,248 1,278 1,235 1,193 1,202 1,373 1,453 1,423 1,320 1,205

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Figure A6.6.15: 3rd Wed Jul Daily Profiles

2003

1,600

2005

2010

2015

2020

1,400

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 531 504 469 445 486 457 517 575 656 662 680 694 696 689 710 688 664 616 621 644 716 738 654 621

31 December 2004

2001 -

2002 557 484 468 453 445 460 506 584 651 700 678 711 704 711 712 711 664 651 629 617 672 710 643 626

2003 619 558 529 503 501 520 580 651 704 737 775 779 771 784 781 768 760 728 715 717 773 809 783 723

Page 109 of 160

2005 635 573 543 516 514 534 595 668 722 756 795 799 791 804 801 788 780 747 734 736 793 830 803 742

2010 765 690 654 622 619 643 717 805 870 911 958 963 953 969 965 949 939 900 884 886 955 1,000 968 894

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 894 806 764 727 724 751 838 941 1,017 1,065 1,120 1,126 1,114 1,133 1,129 1,110 1,098 1,052 1,033 1,036 1,117 1,169 1,131 1,045

2020 1,083 976 925 880 876 909 1,014 1,139 1,231 1,289 1,355 1,362 1,348 1,371 1,366 1,343 1,329 1,273 1,251 1,254 1,352 1,415 1,369 1,265

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Figure A6.6.16: 3rd Wed Oct Daily Profiles

2003

1,400

2005

2010

2015

2020

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 480 445 436 403 424 448 526 629 679 688 687 678 677 652 676 678 698 712 783 801 783 725 665 581

31 December 2004

2001 -

2002 571 510 495 482 477 523 609 674 745 784 768 757 732 717 741 726 704 708 832 884 873 794 773 742

2003 615 570 545 534 537 588 698 794 857 888 897 878 889 899 936 941 959 950 1,014 1,002 986 963 892 796

Page 110 of 160

2005 615 570 545 534 537 588 698 794 857 888 897 878 889 899 936 941 959 950 1,014 1,002 986 963 892 796

2010 603 559 535 524 527 577 685 779 841 871 880 861 872 882 918 923 941 932 995 983 967 945 875 781

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 653 605 579 567 570 624 741 843 910 943 953 932 944 955 994 999 1,018 1,009 1,077 1,064 1,047 1,023 947 845

2020 761 705 674 661 664 727 863 982 1,060 1,098 1,110 1,086 1,100 1,112 1,158 1,164 1,186 1,175 1,254 1,239 1,220 1,191 1,103 985

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Figure A6.6.17: Peak Hourly Demand Daily Profiles

12/28/03

2,500

12/29/05

12/29/10

12/29/15

12/28/20

Demand (MW)

2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

12/24/00 893 902 830 783 777 821 747 843 932 1,023 1,100 1,096 1,141 1,105 1,105 1,114 1,139 1,150 1,194 1,233 1,222 1,174 1,095 1,060

31 December 2004

1/0/00 -

1/6/02 1,071 977 932 889 855 855 886 910 1,012 1,092 1,139 1,151 1,173 1,191 1,209 1,234 1,278 1,320 1,296 1,248 1,212 1,197 1,167 1,106

12/28/03 1,103 1,000 941 902 898 906 935 1,010 1,172 1,239 1,304 1,319 1,340 1,368 1,341 1,354 1,403 1,417 1,417 1,395 1,358 1,342 1,294 1,195

12/29/05 1,059 960 903 866 862 870 898 970 1,125 1,189 1,252 1,266 1,286 1,313 1,287 1,300 1,347 1,360 1,360 1,339 1,304 1,288 1,242 1,147

Page 111 of 160

12/29/10 1,069 969 912 874 870 878 906 979 1,136 1,201 1,264 1,278 1,298 1,326 1,299 1,312 1,360 1,373 1,373 1,352 1,316 1,300 1,254 1,158

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/29/15 1,251 1,134 1,067 1,023 1,018 1,027 1,060 1,145 1,329 1,405 1,479 1,496 1,520 1,551 1,521 1,535 1,591 1,607 1,607 1,582 1,540 1,522 1,467 1,355

12/28/20 1,514 1,373 1,292 1,238 1,233 1,244 1,284 1,387 1,609 1,701 1,790 1,811 1,840 1,878 1,841 1,859 1,926 1,946 1,946 1,915 1,865 1,843 1,777 1,641

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Figure A6.6.18: Minimum Hourly Demand Daily Profiles

5/23/03

1,400

5/24/05

5/24/10

5/24/15

5/23/20

Demand (MW)

1,200 1,000 800 600 400 200

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

5/28/00 532 464 433 434 426 448 498 517 622 653 656 650 676 672 705 678 634 611 601 617 732 730 653 593

31 December 2004

1/0/00 -

8/4/02 488 432 393 394 368 366 392 445 502 522 544 558 565 569 522 513 496 471 480 502 583 601 572 523

5/23/03 511 465 445 431 435 457 521 621 707 742 748 756 746 713 739 710 710 692 691 714 789 789 728 634

Page 112 of 160

5/24/05 504 458 439 425 429 451 514 612 697 732 738 745 736 703 729 700 700 682 681 704 778 778 718 625

5/24/10 553 503 481 466 471 494 564 672 765 803 809 818 807 771 800 768 768 749 748 773 854 854 788 686

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/24/15 651 592 566 549 554 582 663 791 900 945 952 962 950 908 941 904 904 881 880 909 1,004 1,004 927 807

5/23/20 783 713 682 661 667 701 799 952 1,084 1,137 1,147 1,159 1,144 1,093 1,133 1,088 1,088 1,061 1,059 1,095 1,210 1,210 1,116 972

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8

Appendix 6.7 Montenegro Demand Forecasting

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1. Historical Trend Analysis The data for Montenegro was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.7.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 3,016 143 230 373 3,389 11.0% 1992 2,817 122 245 367 3,184 11.5% 1993 2,074 92 250 342 2,416 14.2% 1994 1,729 103 313 416 2,145 19.4% 1995 2,095 99 313 412 2,507 16.4% 1996 2,669 149 313 462 3,131 14.8% 1997 3,051 142 374 516 3,567 14.5% 1998 3,007 127 409 536 3,543 15.1% 647 4,648 1999 2,976 149 417 566 3,542 16.0% 651 4,571 2000 3,349 150 329 479 3,828 12.5% 654 5,121 2001 3,612 161 353 514 4,126 12.5% 658 5,489 2002 4,196 657 2003 3,467 157 475 632 4,355 20.4% 657 5,280 Sources: (1) EPCG (2) S&M Statistics office (1) Net Demand GWh

Gross

Net

5,000

Consumption GWh

4,500 4,000 3,500 3,000 2,500 2,000 1,500 2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1,000

Sources: (1) EPCG

31 December 2004

Page 114 of 160

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y

Figure A6.7.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1991 612 1992 651 1993 494 1994 787 1995 860 1996 919 1997 920 1998 940 1999 965 2000 1,114 2001 1,216 2002 2003 Sources: (1) EPCG

Industry Demand GWh 1,884 1,672 829 485 741 1,204 1,601 1,551 1,496 1,692 1,814 -

Other Demand GWh 520 494 751 457 494 546 530 516 515 543 582 -

Total Net Demand GWh 3,016 2,817 2,074 1,729 2,095 2,669 3,051 3,007 2,976 3,349 3,612 3,467

Domestic

Domestic Demand Growth

Industry Demand Growth

6.0% -31.8% 37.2% 8.5% 6.4% 0.1% 2.1% 2.6% 13.4% 8.4% -

Industry

Other Demand Growth

-12.7% -101.7% -70.9% 34.5% 38.5% 24.8% -3.2% -3.7% 11.6% 6.7% -

-5.3% 34.2% -64.3% 7.5% 9.5% -3.0% -2.7% -0.2% 5.2% 6.7% -

Total Net Demand Growth -7.1% -35.8% -20.0% 17.5% 21.5% 12.5% -1.5% -1.0% 11.1% 7.3% -

Other

4,000 3,500 Consumption GWh

3,000 2,500 2,000 1,500 1,000 500

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Sources: (1) EPCG

31 December 2004

Page 115 of 160

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Figure A6.7.3: Historical System Load Factor Gross Demand GWh 1990 1991 3,389 1992 3,184 1993 2,416 1994 2,145 1995 2,507 1996 3,131 1997 3,567 1998 3,543 1999 3,542 2000 3,828 2001 4,126 2002 4,196 2003 4,355 Sources: (1) EPCG

Auxilliary Demand GWh -

Pumping Demand GWh -

Gross Consump GWh 3,389 3,184 2,416 2,145 2,507 3,131 3,567 3,543 3,542 3,828 4,126 4,196 4,355

Gross Consmp Growth 0.0% -6.0% -24.1% -11.2% 16.9% 24.9% 13.9% -0.7% 0.0% 8.1% 7.8% 1.7% 3.8%

System Peak MW 580 587 615 630 664 714 705 732

System Peak Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.2% 4.8% 2.4% 5.4% 7.5% -1.3% 3.8%

System Load Factor

61.6% 69.4% 65.8% 64.2% 65.8% 66.0% 67.9% 67.9%

75%

65%

45%

31 December 2004

Page 116 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

0.012069 0.0477 0.02439 0.053968 0.075301 -0.012605 0.038298 2003

50%

2002

55%

-0.06049 -0.241206 -0.112169 0.168765 0.248903 0.139253 -0.006728 -0.000282 0.080745 0.077847 0.016925 0.037986 2001

60%

2000

System Load Factor

70%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.7.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 0.0% 0.0% 0.0% 2002 0.0% 0.0% 0.0% Case 1 Case 3 Case 2 2003 3.0% 3.0% 3.0% 2004 5.0% 5.0% 5.0% 2005 3.0% 4.5% 6.5% 7% 2006 3.0% 4.5% 6.5% 6% 2007 3.0% 4.5% 6.5% 2008 3.0% 4.5% 6.5% 5% 2009 3.0% 4.5% 6.5% 4% 2010 3.0% 4.5% 6.5% 2011 3.0% 4.5% 6.5% 3% 2012 3.0% 4.5% 6.5% 2% 2013 3.0% 4.5% 6.5% 2014 3.0% 4.5% 6.5% 1% 2015 3.0% 4.5% 6.5% 0% 2016 3.0% 4.5% 6.5% 2017 3.0% 4.5% 6.5% 2018 3.0% 4.5% 6.5% Sources: (1) PwC (2) PwC (3) PwC 2019 3.0% 4.5% 6.5% 2020 3.0% 4.5% 6.5% Sources: (1) PwC (2) PwC (3) PwC Figure A6.7.5: Forecast Population

yoy growth

660

0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% -0.10% -0.20% -0.30%

658 656 654 652 650 648

31 December 2004

2020

2018

2016

2014

Source: US Census Bureau

2012

2010

2008

2006

2004

2002

2000

646

Pop ('000) ytd growth yoy growth 2000 654 2001 658 0.61% 2002 657 -0.19% 2003 657 0.0% -0.02% 2004 657 0.1% 0.07% 2005 657 0.1% 0.05% 2006 658 0.2% 0.03% 2007 658 0.2% 0.02% 2008 658 0.2% 0.00% 2009 658 0.1% -0.02% 2010 657 0.1% -0.03% 2011 657 0.1% -0.05% 2012 657 0.0% -0.06% 2013 656 -0.1% -0.07% 2014 656 -0.2% -0.09% 2015 655 -0.2% -0.10% 2016 654 -0.4% -0.11% 2017 653 -0.5% -0.12% 2018 653 -0.6% -0.13% 2019 652 -0.7% -0.14% 2020 651 -0.9% -0.14% Source: US Census Bureau

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

4,800

System Peak Demand

Gross Consumption GWh

4,900

Figure A6.7.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 4,355 710 GWh MW 2004 4,344 2005 4,370 711 2006 4,386 800 2007 4,402 780 2008 4,418 760 2009 4,433 2010 4,448 725 740 2011 4,462 720 2012 4,476 2013 4,489 700 2014 4,502 680 2015 4,513 737 2016 4,574 660 2017 4,635 2018 4,696 2019 4,758 2020 4,820 787 Source: PwC Figure A6.7.7: Case 2 Economic Model Forecast Calculation

4,700 4,600 4,500 4,400 4,300 4,200

70.2%

70.0%

69.9%

2003 2005 2007 2009 2011 2013 2015 2017 2019

4,100

LF% 70.0%

Source: PwC

GDP per Capita (95 US$) 2002 1,018 2003 1,115 2004 1,149 2005 1,206 2006 1,260 2007 1,317 2008 1,376 2009 1,438 2010 1,503 2011 1,570 2012 1,641 2013 1,715 2014 1,792 2015 1,873 2016 1,957 2017 2,045 2018 2,137 2019 2,233 2020 2,334 Source: PwC Year

31 December 2004

Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) -16.5% 2.34 2,386 657 3,340 9.5% 2.14 2,386 657 3,467 3.0% 2.11 2,422 657 3,491 5.0% 2.08 2,505 657 3,547 4.5% 2.05 2,578 658 3,595 4.5% 2.01 2,652 658 3,644 4.5% 1.98 2,728 658 3,694 4.5% 1.95 2,806 658 3,745 4.5% 1.92 2,885 657 3,796 4.5% 1.89 2,965 657 3,848 4.5% 1.86 3,047 657 3,901 4.5% 1.83 3,130 656 3,954 4.5% 1.79 3,215 656 4,008 4.5% 1.76 3,300 655 4,062 4.5% 1.73 3,387 654 4,116 4.5% 1.70 3,475 653 4,171 4.5% 1.67 3,564 653 4,226 4.5% 1.64 3,655 652 4,282 4.5% 1.60 3,746 651 4,338

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69.9%

D&T Gross Losses Consumpt (%) (GWh) 20.4% 4,196 20.4% 4,355 19.6% 4,344 18.8% 4,370 18.0% 4,386 17.2% 4,402 16.4% 4,418 15.5% 4,433 14.6% 4,448 13.8% 4,462 12.9% 4,476 11.9% 4,489 11.0% 4,502 10.0% 4,513 10.0% 4,574 10.0% 4,635 10.0% 4,696 10.0% 4,758 10.0% 4,820

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Figure A6.7.8: Comparison with other Forecasts

Case 2 PwC KfW Medium

Case 1 PwC KfW High

Case 3 PwC

Gross Consumption (GWh)

6,000 5,000 4,000 3,000 2,000 1,000

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, KfW 2002 Case 2 Case 1 GWh 2000 3,828 2001 4,126 2002 4,196 2003 4,355 4,355 2004 4,344 4,155 2005 4,370 3,997 2006 4,386 3,866 2007 4,402 3,757 2008 4,418 3,665 2009 4,433 3,587 2010 4,448 3,521 2011 4,462 3,463 2012 4,476 3,413 2013 4,489 3,370 2014 4,502 3,332 2015 4,513 3,299 2016 4,574 3,306 2017 4,635 3,316 2018 4,696 3,330 2019 4,758 3,347 2020 4,820 3,367 Source: PwC 2004, KfW 2002 31 December 2004

Case 3

4,355 4,332 4,345 4,387 4,429 4,471 4,514 4,557 4,599 4,642 4,684 4,725 4,766 4,858 4,951 5,044 5,138 5,231

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KfW

4,151 4,193 4,235 4,277 4,320 4,374 4,428 4,484 4,540 4,596 4,654

KfW High

4,165 4,222 4,279 4,336 4,395 4,450 4,506 4,562 4,619 4,677 4,735

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Figure A6.7.9: Forecast Final Demand per Capita

3,500 3,000

Source: PwC

2000

-

yoy growth

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 2000

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -

Annual Growth

Final Demand (GWh)

GWh

2018

500

2015

1,000

2012

1,500

2009

2,000

2006

2,500

2003

Annual Growth

Final demand kWh/capita

4,000

kWh/cap ytd growth yoy growth 2000 2,505 kWh/cap yoy growth 2001 2,889 15.4% 2002 2,386 -17.4% 2003 2,386 0.0% 0.0% 20% 2004 2,422 1.5% 1.5% 15% 2005 2,505 5.0% 3.4% 2006 2,578 8.0% 2.9% 10% 2007 2,652 11.2% 2.9% 5% 2008 2,728 14.3% 2.9% 0% 2009 2,806 17.6% 2.8% -5% 2010 2,885 20.9% 2.8% 2011 2,965 24.3% 2.8% -10% 2012 3,047 27.7% 2.8% -15% 2013 3,130 31.2% 2.7% -20% 2014 3,215 34.7% 2.7% 2015 3,300 38.3% 2.7% 2016 3,387 42.0% 2.6% 2017 3,475 45.6% 2.6% 2018 3,564 49.4% 2.6% 2019 3,655 53.2% 2.5% 2020 3,746 57.0% 2.5% Source: PwC Figure A6.7.10: Forecast Final Net Demand GWh ytd growth yoy growth 2000 3,349 2001 3,612 7.9% 2002 3,340 -7.5% 2003 3,467 0.0% 3.8% 2004 3,491 0.7% 0.7% 2005 3,547 2.3% 1.6% 2006 3,595 3.7% 1.4% 2007 3,644 5.1% 1.4% 2008 3,694 6.6% 1.4% 2009 3,745 8.0% 1.4% 2010 3,796 9.5% 1.4% 2011 3,848 11.0% 1.4% 2012 3,901 12.5% 1.4% 2013 3,954 14.1% 1.4% 2014 4,008 15.6% 1.4% 2015 4,062 17.2% 1.3% 2016 4,116 18.7% 1.3% 2017 4,171 20.3% 1.3% 2018 4,226 21.9% 1.3% 2019 4,282 23.5% 1.3% 2020 4,338 25.1% 1.3% Source: PwC

Page 120 of 160

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.7.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

Jun

Jul

2010

2015

2020

11% 11% 10% 10% 9% 9% 8% 8% 7% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Aug

Sep

Oct

Nov

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 10.3% 9.3% 9.5% 7.7% 7.3% 7.4% 7.8% 7.5% 7.3% 7.8% 8.4% 2001 9.7% 8.9% 8.8% 8.2% 7.2% 7.1% 7.7% 7.9% 7.4% 7.7% 8.8% 2002 9.5% 8.3% 8.5% 8.0% 7.4% 7.4% 8.0% 8.0% 7.5% 8.3% 8.8% 2003 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2004 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2005 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2006 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2007 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2008 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2009 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2010 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2011 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2012 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2013 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2014 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2015 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2016 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2017 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2018 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2019 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% 2020 9.6% 8.9% 8.9% 8.1% 7.2% 7.3% 7.9% 7.9% 7.3% 8.0% 8.7% Source: PwC 31 December 2004

Page 121 of 160

Dec

Dec 9.8% 10.5% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2% 10.2%

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Figure A6.7.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2000 96.1% 95.3% 100.0% 82.8% 67.6% 70.2% 73.6% 70.8% 71.4% 77.7% 86.4% 2001 2002 93.3% 88.8% 86.8% 84.0% 70.4% 73.5% 76.7% 80.0% 78.4% 83.8% 90.9% 2003 95.4% 100.0% 94.1% 88.7% 67.9% 70.8% 74.0% 74.2% 69.9% 83.3% 83.9% 2005 98.2% 96.8% 92.4% 91.3% 70.6% 72.9% 76.2% 78.0% 74.9% 85.8% 89.0% 2010 98.2% 96.8% 92.4% 91.3% 70.6% 72.9% 76.2% 78.0% 74.9% 85.8% 89.0% 2015 97.6% 96.9% 92.5% 90.7% 70.7% 72.4% 75.8% 78.1% 75.0% 85.3% 89.0% 2020 97.5% 96.8% 92.4% 90.7% 70.6% 72.4% 75.7% 78.0% 74.9% 85.2% 89.0% Source: PwC

31 December 2004

Page 122 of 160

Dec 93.8% 100.0% 94.4% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.7.13: 3rd Wed January Daily Profiles

2003

800

2005

2010

2015

2020

700

Demand (MW)

600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 552 528 498 494 481 479 531 576 590 606 612 602 622 638 614 612 634 631 615 626 612 624 612 590

31 December 2004

2001 -

2002 518 498 458 450 446 463 497 514 511 520 527 547 537 519 532 528 524 544 564 625 625 612 597 573

2003 547 501 483 463 452 468 493 555 577 605 612 610 609 613 611 598 601 618 635 623 617 600 607 597

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2005 572 545 521 505 502 499 529 584 607 630 616 590 577 581 578 600 614 659 657 661 665 650 647 620

2010 583 556 531 515 512 509 540 596 619 643 628 602 589 593 590 612 626 672 670 674 678 663 660 632

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 589 561 537 520 517 514 545 602 625 649 634 608 594 598 595 618 632 679 677 681 685 670 666 639

2020 629 600 573 556 552 549 582 642 668 693 678 649 635 639 636 660 675 725 723 727 732 715 712 682

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Figure A6.7.14: 3rd Wed April Daily Profiles

2003

700

2005

2010

2015

2020

Demand (MW)

600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 371 322 330 330 314 324 360 387 397 431 408 421 421 412 412 409 391 377 373 398 445 438 418 396

31 December 2004

2001 -

2002 408 391 386 375 371 393 403 449 479 473 473 473 482 463 460 445 440 437 426 467 500 496 477 493

2003 458 435 416 410 420 409 457 502 533 552 549 554 564 539 547 555 549 533 532 547 568 572 540 523

Page 124 of 160

2005 432 397 383 393 391 401 445 463 493 496 497 490 492 475 480 478 473 458 463 492 550 527 511 484

2010 441 405 391 401 399 409 454 472 503 506 507 500 502 485 490 488 482 467 472 502 561 538 521 494

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 445 409 394 405 403 413 458 477 508 511 512 505 507 489 494 492 487 472 477 507 567 543 526 499

2020 475 437 421 432 430 441 490 509 542 546 547 539 541 523 528 526 520 504 509 541 605 580 562 532

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Figure A6.7.15: 3rd Wed Jul Daily Profiles

2003

700

2005

2010

2015

2020

Demand (MW)

600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 413 379 345 345 346 331 368 400 428 439 438 454 462 452 402 332 347 349 425 427 454 472 453 420

31 December 2004

2001 -

2002 431 407 395 384 376 379 397 436 466 471 490 493 507 498 497 491 472 477 487 492 534 538 534 483

2003 451 425 401 405 398 394 419 441 472 486 497 461 462 519 505 490 464 492 488 516 531 536 508 500

Page 125 of 160

2005 430 402 393 374 370 389 396 434 471 463 493 494 509 505 502 490 464 463 472 486 506 528 506 486

2010 439 410 401 381 377 397 404 443 480 472 503 504 519 515 512 500 473 472 481 496 516 539 516 496

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 443 414 405 385 381 401 408 447 485 477 508 509 524 520 517 505 478 477 486 501 521 544 521 501

2020 473 442 432 411 407 428 436 477 518 509 542 543 560 556 552 539 510 509 519 535 557 581 557 535

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Figure A6.7.16: 3rd Wed Oct Daily Profiles

2003

700

2005

2010

2015

2020

Demand (MW)

600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 390 363 357 340 340 360 400 439 469 475 467 448 436 428 435 422 428 432 497 504 516 484 465 445

31 December 2004

2001 -

2002 433 402 384 374 375 385 408 472 490 481 487 487 485 475 470 472 460 477 522 529 526 510 481 470

2003 431 412 403 384 378 409 420 472 491 505 509 494 480 511 520 513 479 508 504 539 538 521 504 478

Page 126 of 160

2005 376 386 373 363 364 371 415 446 477 497 507 511 515 495 511 517 509 510 542 560 557 535 512 485

2010 376 386 373 363 364 371 415 446 477 497 507 511 515 495 511 517 509 510 542 560 557 535 512 485

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 384 394 380 370 371 378 423 455 487 507 517 521 525 505 521 527 519 520 553 571 568 546 522 495

2020 387 398 384 374 375 382 427 459 491 512 522 526 530 510 526 533 524 525 558 577 574 551 527 500

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Figure A6.7.17: Peak Hourly Demand Daily Profiles

2/9/03

900

12/18/05

12/18/10

12/18/15

12/17/20

800

Demand (MW)

700 600 500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

3/1/00 484 445 453 432 422 427 496 534 554 552 558 549 567 571 556 566 570 582 588 586 597 587 664 530

31 December 2004

12/13/01 592 528 512 508 511 507 566 588 630 647 661 665 655 674 679 672 701 709 693 706 714 705 673 647

12/21/02 585 529 512 500 489 502 524 570 607 639 648 639 633 645 657 655 676 705 696 687 676 657 658 632

2/9/03 625 595 523 529 520 530 527 577 631 653 664 672 663 670 658 655 675 697 732 725 731 723 718 682

12/18/05 587 543 519 511 511 513 565 616 636 642 653 649 644 658 654 660 686 694 705 711 698 699 679 649

Page 127 of 160

12/18/10 598 554 529 522 522 524 576 629 649 655 666 662 657 671 668 673 700 707 719 725 712 713 693 662

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/18/15 608 563 537 530 530 532 585 639 659 665 677 673 667 681 678 683 711 719 730 737 723 724 704 673

12/17/20 649 601 574 566 566 568 625 682 704 711 723 719 713 728 724 730 760 768 780 787 772 773 752 719

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Figure A6.7.18: Minimum Hourly Demand Daily Profiles

6/20/03

600

5/7/05

5/7/10

5/7/15

5/6/20

Demand (MW)

500 400 300 200 100

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

7/11/00 390 356 340 326 11 44 329 377 385 420 434 433 435 439 462 433 419 417 437 439 445 454 440 415

31 December 2004

5/6/01 354 322 309 302 292 313 341 358 380 411 420 430 428 413 413 411 407 400 413 441 484 434 408 400

6/25/02 446 403 386 378 363 373 385 433 450 473 477 483 480 472 465 450 447 446 449 449 477 500 472 457

6/20/03 448 406 379 381 392 391 421 456 469 486 485 488 509 497 504 496 472 465 472 471 490 501 483 447

Page 128 of 160

5/7/05 395 369 343 342 330 338 379 415 429 439 441 439 445 438 427 413 408 402 418 419 457 467 442 421

5/7/10 403 376 350 349 337 345 386 423 438 448 450 448 454 447 436 421 416 410 427 428 466 476 451 430

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/7/15 410 382 356 355 342 351 393 430 445 456 458 456 462 455 443 428 423 417 434 435 473 484 459 437

5/6/20 437 408 380 379 366 375 419 460 475 486 489 486 493 485 473 457 452 445 463 464 505 517 490 466

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6

Appendix 6.8 Romania Demand Forecasting

31 December 2004

Page 129 of 160

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1. Historical Trend Analysis The data for Romania was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.8.1: Historical Electricity Consumption (1) (1) (1) (1) (2) Net Transmis Distrib Total Gross All Losses Population Net Energy Demand Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh GWh Gross ('000) kWh/cap 1990 60,216 5,929.0 5,929.0 66,145 9.0% 23,207 2,595 1991 51,531 5,864 5,864 57,395 10.2% 23,185 2,223 1992 46,736 5,525 5,525 52,261 10.6% 22,789 2,051 1993 45,614 5,628 5,628 51,242 11.0% 22,755 2,005 1994 44,841 5,065 5,065 49,906 10.1% 22,731 1,973 1995 46,463 6,738 6,738 53,201 12.7% 22,681 2,049 1996 48,407 7,183 7,183 55,590 12.9% 22,608 2,141 1997 45,069 6,581 6,581 51,650 12.7% 22,546 1,999 1998 42,177 6,515 6,515 48,692 13.4% 22,503 1,874 1999 38,747 6,387 6,387 45,134 14.2% 22,458 1,725 2000 39,769 6,590 6,590 46,359 14.2% 22,435 1,773 2001 41,136 6,750 6,750 47,886 14.1% 22,408 1,836 2002 40,749 6,886 6,886 47,635 14.5% 21,681 1,879 2003 42,464 7,230 7,230 49,694 14.5% 21,681 1,959 Source: National Institute of Statistics (Romania)

Gross

Net

70,000

Consumption GWh

65,000 60,000 55,000 50,000 45,000 40,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

35,000

Source: National Institute of Statistics (Romania)

31 December 2004

Page 130 of 160

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Figure A6.8.2: Historical Sectoral Electricity Demand Domestic Industry Other Total Net Demand Demand Demand Demand GWh GWh GWh GWh 1990 5,354 36,893 17,969 60,216 1991 6,747 29,303 15,481 51,531 1992 7,596 24,010 15,130 46,736 1993 7,023 23,084 15,507 45,614 1994 6,646 21,902 16,293 44,841 1995 7,116 22,971 16,376 46,463 1996 8,122 23,725 16,560 48,407 1997 7,946 25,206 11,917 45,069 1998 7,917 22,710 11,550 42,177 1999 7,883 19,831 11,033 38,747 2000 7,652 20,067 12,050 39,769 2001 7,724 20,117 13,295 41,136 2002 7,771 22,706 10,272 40,749 2003 7,971 23,662 10,831 42,464 Source: National Institute of Statistics (Romania)

Domestic

Domestic Demand Growth

Industry Demand Growth

20.6% 11.2% -8.2% -5.7% 6.6% 12.4% -2.2% -0.4% -0.4% -3.0% 0.9% 0.6% 2.5%

Industry

-25.9% -22.0% -4.0% -5.4% 4.7% 3.2% 5.9% -11.0% -14.5% 1.2% 0.2% 11.4% 4.0%

Other Demand Growth -16.1% -2.3% 2.4% 4.8% 0.5% 1.1% -39.0% -3.2% -4.7% 8.4% 9.4% -29.4% 5.2%

Total Net Demand Growth -16.9% -10.3% -2.5% -1.7% 3.5% 4.0% -7.4% -6.9% -8.9% 2.6% 3.3% -0.9% 4.0%

Other

60,000

Consumption GWh

50,000 40,000 30,000 20,000 10,000

2001

2000

1999

1994

1993

1992

1991

-

Source: National Institute of Statistics (Romania)

31 December 2004

Page 131 of 160

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Figure A6.8.3: Historical System Load Factor Gross Auxilliary Pumping Gross Demand Demand Demand Consump GWh GWh GWh GWh 1990 66,145 7,640 73,785 1991 57,395 6,564 63,959 1992 52,261 6,137 58,398 1993 51,242 6,107 57,349 1994 49,906 5,955 55,861 1995 53,201 6,365 59,566 1996 55,590 6,567 62,157 1997 51,650 5,720 57,370 1998 48,692 5,207 53,899 1999 45,134 4,752 49,886 2000 46,359 4,880 51,239 2001 47,886 4,670 52,556 2002 47,635 4,700 52,335 2003 49,694 4,760 54,454 Source: National Institute of Statistics (Romania)

Gross Consmp Growth -13.3% -8.7% -1.8% -2.6% 6.6% 4.3% -7.7% -6.1% -7.4% 2.7% 2.6% -0.4% 4.0%

System Peak MW 10,699 9,753 9,585 9,115 8,790 9,645 9,491 9,450 9,128 8,245 8,169 8,569 8,410 8,356

System Peak Growth

-0.133171 -0.086946 -0.017963 -0.025946 0.066325 0.043498 -0.077015 -0.0605 -0.074456 0.027122 0.025703 -0.004205 0.040487

-0.088419 -0.017225 -0.049035 -0.035656 0.09727 -0.015967 -0.00432 -0.034074 -0.096735 -0.009218 0.048966 -0.018555 -0.006421

-8.8% -1.7% -4.9% -3.6% 9.7% -1.6% -0.4% -3.4% -9.7% -0.9% 4.9% -1.9% -0.6%

System Load Factor 78.7% 74.9% 69.6% 71.8% 72.5% 70.5% 74.8% 69.3% 67.4% 69.1% 71.6% 70.0% 71.0% 74.4%

85%

60% 55% 50% 45%

31 December 2004

Page 132 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

2003

65%

2002

70%

2001

75%

2000

System Load Factor

80%

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2. Forecast Assumptions

Pop ('000)

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Figure A6.8.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 5.9% 5.9% 5.9% 2002 8.4% 8.4% 8.4% Case 1 Case 3 Case 2 2003 4.8% 4.8% 4.8% 2004 6.0% 6.0% 6.0% 2005 5.0% 5.0% 5.0% 9% 2006 3.0% 4.5% 6.0% 8% 2007 3.0% 4.5% 6.0% 7% 2008 3.0% 4.5% 6.0% 6% 2009 3.0% 4.5% 6.0% 5% 2010 3.0% 4.5% 6.0% 2011 3.0% 4.5% 5.5% 4% 2012 3.0% 4.5% 5.5% 3% 2013 3.0% 4.5% 5.5% 2% 2014 3.0% 4.5% 5.5% 1% 2015 3.0% 4.5% 5.5% 0% 2016 3.0% 4.5% 5.2% 2017 3.0% 4.5% 5.2% 2018 3.0% 4.5% 5.2% Sources: (1) PwC (2) PwC (3) Min. of 2019 3.0% 4.5% 5.2% Econ 2020 3.0% 4.5% 5.2% Sources: (1) PwC (2) PwC (3) Min. of Econ. Figure A6.8.5: Forecast Population

yoy growth

25,000

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

20,000 15,000 10,000 5,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: Energy Road Map

31 December 2004

Pop ('000) ytd growth yoy growth 2000 21,681 2001 21,681 0.00% 2002 21,681 0.00% 2003 21,681 0.0% 0.00% 2004 21,681 0.0% 0.00% 2005 21,681 0.0% 0.00% 2006 21,681 0.0% 0.00% 2007 21,681 0.0% 0.00% 2008 21,681 0.0% 0.00% 2009 21,681 0.0% 0.00% 2010 21,681 0.0% 0.00% 2011 21,681 0.0% 0.00% 2012 21,681 0.0% 0.00% 2013 21,681 0.0% 0.00% 2014 21,681 0.0% 0.00% 2015 21,681 0.0% 0.00% 2016 21,681 0.0% 0.00% 2017 21,681 0.0% 0.00% 2018 21,681 0.0% 0.00% 2019 21,681 0.0% 0.00% 2020 21,681 0.0% 0.00% Source: Energy Road Map [29]

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90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Figure A6.8.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 49,694 7,409 GWh MW 2004 49,462 2005 49,554 7,372 2006 49,903 12000 2007 50,486 10000 2008 51,285 2009 52,285 8000 2010 53,476 7,950 2011 54,851 6000 2012 56,404 4000 2013 58,131 2014 60,031 2000 2015 62,103 9,234 2016 64,634 0 2017 67,363 2018 70,295 2019 73,437 2020 76,796 11,418 Source: PwC Figure A6.8.7: Case 2 Economic Model Forecast Calculation

Source: PwC

GDP per Capita (95 US$) 2002 1,517 2003 1,590 2004 1,685 2005 1,770 2006 1,849 2007 1,932 2008 2,019 2009 2,110 2010 2,205 2011 2,305 2012 2,408 2013 2,517 2014 2,630 2015 2,748 2016 2,872 2017 3,001 2018 3,136 2019 3,277 2020 3,425 Source: PwC Year

31 December 2004

LF% 76.6% 76.7%

76.8%

76.8%

2018

2015

2012

2009

2006

2003

System Peak Demand

Gross Consumption GWh

3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 8.4% 1.24 1,879 21,681 40,749 4.8% 1.23 1,959 21,681 42,464 6.0% 1.16 1,958 21,681 42,444 5.0% 1.11 1,970 21,681 42,703 4.5% 1.08 1,992 21,681 43,187 4.5% 1.05 2,024 21,681 43,878 4.5% 1.02 2,065 21,681 44,763 4.5% 1.00 2,114 21,681 45,833 4.5% 0.98 2,171 21,681 47,080 4.5% 0.97 2,237 21,681 48,500 4.5% 0.96 2,310 21,681 50,091 4.5% 0.95 2,392 21,681 51,851 4.5% 0.94 2,481 21,681 53,782 4.5% 0.94 2,578 21,681 55,884 4.5% 0.93 2,683 21,681 58,161 4.5% 0.93 2,796 21,681 60,617 4.5% 0.93 2,918 21,681 63,255 4.5% 0.93 3,048 21,681 66,083 4.5% 0.93 3,187 21,681 69,105

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76.8%

D&T Gross Losses Consumpt (%) (GWh) 14.5% 47,635 14.5% 49,694 14.2% 49,462 13.8% 49,554 13.5% 49,903 13.1% 50,486 12.7% 51,285 12.3% 52,285 12.0% 53,476 11.6% 54,851 11.2% 56,404 10.8% 58,131 10.4% 60,031 10.0% 62,103 10.0% 64,634 10.0% 67,363 10.0% 70,295 10.0% 73,437 10.0% 76,796

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Figure A6.8.8: Comparison with other Forecasts

Case 2 PwC Road Map Base

Case 1 PwC Road Map Alt

Case 3 PwC

Gross Consumption (GWh)

100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, Energy Road Map 2003 [29] Case 2 Case 1 Case 3 Road Map Road Map GWh 2000 44,801 2001 46,332 2002 47,635 2003 49,694 49,694 49,694 49,694 49,694 2004 49,462 48,915 49,855 49,710 49,710 2005 49,554 48,524 50,299 51,470 52,020 2006 49,903 48,346 51,068 52,882 53,419 2007 50,486 48,355 52,139 54,333 54,855 2008 51,285 48,529 53,497 55,824 56,330 2009 52,285 48,853 55,132 57,356 57,845 2010 53,476 49,311 57,040 58,930 59,400 2011 54,851 49,894 59,182 60,381 60,866 2012 56,404 50,590 61,559 61,867 62,368 2013 58,131 51,394 64,176 63,390 63,907 2014 60,031 52,298 67,037 64,951 65,484 2015 62,103 53,296 70,149 66,550 67,100 2016 64,634 54,628 73,819 69,063 69,650 2017 67,363 56,059 77,765 71,671 72,296 2018 70,295 57,588 82,000 74,377 75,044 2019 73,437 59,215 86,538 77,185 77,895 2020 76,796 60,938 91,397 80,100 80,855 Source: PwC 2004, Energy Road Map 2003 [29] 31 December 2004

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Figure A6.8.9: Forecast Final Demand per Capita

3,000 2,500

GWh

2018

Source: PwC

2000

-

2015

500

2012

1,000

2009

1,500

2006

2,000

2003

Annual Growth

Final demand kWh/capita

3,500

kWh/cap ytd growth yoy growth 2000 1,773 kWh/cap yoy growth 2001 1,836 3.6% 2002 1,879 2.4% 2003 1,959 0.0% 4.2% 5% 2004 1,958 0.0% 0.0% 2005 1,970 0.6% 0.6% 4% 2006 1,992 1.7% 1.1% 3% 2007 2,024 3.3% 1.6% 2008 2,065 5.4% 2.0% 2% 2009 2,114 7.9% 2.4% 2010 2,171 10.9% 2.7% 1% 2011 2,237 14.2% 3.0% 2012 2,310 18.0% 3.3% 0% 2013 2,392 22.1% 3.5% -1% 2014 2,481 26.7% 3.7% 2015 2,578 31.6% 3.9% 2016 2,683 37.0% 4.1% 2017 2,796 42.7% 4.2% 2018 2,918 49.0% 4.4% 2019 3,048 55.6% 4.5% 2020 3,187 62.7% 4.6% Source: PwC Figure A6.8.10: Forecast Final Net Demand

yoy growth 5%

70,000

4%

60,000

3%

50,000 40,000

2%

30,000

1%

20,000

0%

10,000

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

-1% 2000

-

Annual Growth

Final Demand (GWh)

80,000

GWh ytd growth yoy growth 2000 38,432 2001 39,801 3.6% 2002 40,749 2.4% 2003 42,464 0.0% 4.2% 2004 42,444 0.0% 0.0% 2005 42,703 0.6% 0.6% 2006 43,187 1.7% 1.1% 2007 43,878 3.3% 1.6% 2008 44,763 5.4% 2.0% 2009 45,833 7.9% 2.4% 2010 47,080 10.9% 2.7% 2011 48,500 14.2% 3.0% 2012 50,091 18.0% 3.3% 2013 51,851 22.1% 3.5% 2014 53,782 26.7% 3.7% 2015 55,884 31.6% 3.9% 2016 58,161 37.0% 4.1% 2017 60,617 42.7% 4.2% 2018 63,255 49.0% 4.4% 2019 66,083 55.6% 4.5% 2020 69,105 62.7% 4.6% Source: PwC

Page 136 of 160

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.8.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

10% 10% 9% 9% 8% 8% 7% 7% 6%

Jan Source: PwC

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 9.8% 8.9% 9.2% 7.7% 7.4% 7.5% 7.7% 7.5% 7.5% 8.5% 8.9% 9.4% 2001 9.5% 8.7% 9.0% 8.0% 7.8% 7.4% 7.8% 7.8% 7.3% 7.9% 9.1% 9.7% 2002 9.7% 8.3% 8.6% 8.1% 7.5% 7.7% 8.1% 7.4% 7.5% 8.6% 8.9% 9.6% 2003 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2004 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2005 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2006 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2007 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2008 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2009 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2010 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2011 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2012 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2013 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2014 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2015 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2016 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2017 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2018 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2019 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% 2020 9.2% 8.6% 9.1% 8.1% 7.7% 7.8% 8.1% 7.5% 7.4% 8.5% 8.8% 9.2% Source: PwC 31 December 2004

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Figure A6.8.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Jan 2000 100.0% 2001 96.6% 2002 98.2% 2003 98.6% 2005 98.6% 2010 98.6% 2015 98.6% 2020 98.6% Source: PwC

Feb 97.0% 94.7% 90.2% 100.0% 100.0% 100.0% 100.0% 100.0%

31 December 2004

Feb

Mar

Mar

Apr

95.9% 92.5% 86.5% 96.8% 96.8% 96.8% 96.8% 96.8%

86.5% 85.6% 88.9% 96.4% 96.4% 96.4% 96.4% 96.4%

May 76.7% 78.0% 78.2% 81.9% 81.9% 81.9% 81.9% 81.9%

Jun 79.2% 75.1% 78.9% 86.0% 86.0% 86.0% 86.0% 86.0%

Jul

Jul 79.1% 75.7% 81.3% 87.2% 87.2% 87.2% 87.2% 87.2%

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Aug

Aug 77.2% 76.3% 72.6% 78.6% 78.6% 78.6% 78.6% 78.6%

Sep

Oct

Sep 80.5% 78.1% 79.1% 81.6% 81.6% 81.6% 81.6% 81.6%

Nov

Oct

Dec

Nov

90.3% 86.1% 90.1% 96.3% 96.3% 96.3% 96.3% 96.3%

96.6% 95.8% 93.9% 96.7% 96.7% 96.7% 96.7% 96.7%

Dec 97.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.8.13: 3rd Wed January Daily Profiles

2003

12,000

2005

2010

2015

2020

Demand (MW)

10,000 8,000 6,000 4,000 2,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 5,593 5,475 5,386 5,429 5,492 5,690 6,121 6,764 6,978 6,970 6,901 6,836 6,811 6,792 6,564 6,318 6,451 6,795 7,028 6,986 6,877 6,547 6,223 5,843

31 December 2004

2001 5,823 5,716 5,615 5,643 5,704 5,898 6,300 6,987 7,186 7,124 7,029 6,891 6,918 6,905 6,712 6,537 6,615 6,915 7,180 7,220 7,107 6,731 6,367 6,104

2002 6,019 5,858 5,788 5,834 5,951 6,154 6,534 7,311 7,293 7,294 7,260 7,118 7,085 7,085 6,884 6,729 6,756 7,041 7,246 7,248 7,147 6,833 6,541 6,336

2003 5,936 5,812 5,741 5,688 5,793 5,951 6,300 6,960 7,128 7,166 7,169 7,087 7,029 7,071 6,894 6,676 6,732 7,028 7,263 7,257 7,103 6,779 6,500 6,196

Page 139 of 160

2005 5,864 5,810 5,746 5,740 5,807 5,991 6,358 7,059 7,197 7,173 7,228 7,133 7,035 7,030 6,888 6,630 6,670 6,974 7,167 7,126 6,999 6,670 6,389 5,993

2010 6,324 6,265 6,197 6,190 6,262 6,460 6,857 7,612 7,762 7,735 7,794 7,692 7,587 7,581 7,427 7,150 7,193 7,521 7,729 7,684 7,547 7,193 6,890 6,463

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 7,345 7,277 7,198 7,189 7,273 7,504 7,964 8,841 9,015 8,984 9,053 8,935 8,812 8,806 8,627 8,304 8,354 8,736 8,978 8,925 8,766 8,354 8,003 7,507

2020 9,082 8,998 8,899 8,889 8,993 9,278 9,847 10,932 11,147 11,109 11,194 11,047 10,895 10,888 10,667 10,268 10,330 10,802 11,100 11,036 10,839 10,330 9,896 9,282

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Figure A6.8.14: 3rd Wed April Daily Profiles

2003

12,000

2005

2010

2015

2020

Demand (MW)

10,000 8,000 6,000 4,000 2,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 4,715 4,549 4,492 4,434 4,474 4,661 4,869 5,243 5,528 5,601 5,558 5,449 5,404 5,359 5,232 5,030 5,013 5,049 4,956 4,926 5,390 5,596 5,351 4,925

31 December 2004

2001 5,004 4,859 4,794 4,823 4,920 5,050 5,223 5,708 6,165 6,334 6,363 6,331 6,347 6,330 6,157 5,982 5,875 5,823 5,739 5,646 6,128 6,165 5,909 5,672

2002 5,203 5,068 4,956 4,884 4,935 5,157 5,342 5,741 6,060 6,126 6,025 5,920 5,834 5,833 5,691 5,410 5,342 5,328 5,290 5,272 5,787 5,928 5,743 5,364

2003 5,477 5,349 5,261 5,215 5,224 5,346 5,430 5,878 6,174 6,197 6,104 6,066 6,052 5,977 5,801 5,549 5,517 5,509 5,432 5,456 5,959 6,201 5,954 5,673

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2005 5,512 5,358 5,285 5,271 5,273 5,446 5,681 6,219 6,526 6,596 6,560 6,416 6,388 6,330 6,177 5,940 5,864 5,790 5,771 5,832 6,357 6,535 6,094 5,785

2010 5,944 5,778 5,699 5,685 5,687 5,872 6,126 6,707 7,037 7,113 7,075 6,919 6,888 6,826 6,661 6,405 6,324 6,244 6,223 6,290 6,856 7,047 6,572 6,239

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 6,904 6,711 6,620 6,603 6,605 6,821 7,115 7,790 8,174 8,262 8,217 8,037 8,001 7,928 7,737 7,440 7,345 7,253 7,228 7,305 7,963 8,186 7,633 7,247

2020 8,537 8,298 8,185 8,164 8,167 8,434 8,798 9,632 10,106 10,216 10,160 9,937 9,893 9,803 9,566 9,199 9,082 8,968 8,937 9,033 9,846 10,121 9,438 8,960

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Figure A6.8.15: 3rd Wed Jul Daily Profiles

2003

10,000

2005

2010

2015

2020

9,000

Demand (MW)

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 4,642 4,516 4,451 4,455 4,472 4,468 4,595 5,042 5,429 5,523 5,495 5,599 5,553 5,504 5,496 5,467 5,458 5,093 4,975 4,969 5,055 5,340 5,310 4,965

31 December 2004

2001 5,004 4,859 4,794 4,823 4,920 5,050 5,223 5,708 6,165 6,334 6,363 6,331 6,347 6,330 6,157 5,982 5,875 5,823 5,739 5,646 6,128 6,165 5,909 5,672

2002 5,103 4,938 4,943 4,881 4,908 4,945 5,071 5,486 5,955 6,057 6,090 6,032 6,011 6,038 5,914 5,792 5,654 5,625 5,537 5,457 5,552 5,744 5,720 5,318

2003 5,283 5,110 5,053 4,967 5,007 5,032 5,075 5,559 5,948 6,108 6,101 6,069 6,193 6,167 6,018 5,894 5,888 5,802 5,691 5,700 5,796 6,010 5,985 5,577

Page 141 of 160

2005 5,109 5,033 4,954 4,888 4,924 4,930 4,979 5,383 5,769 5,934 5,929 5,884 5,912 5,892 5,803 5,677 5,640 5,599 5,503 5,486 5,536 5,801 5,948 5,539

2010 5,509 5,427 5,342 5,271 5,310 5,317 5,369 5,805 6,222 6,399 6,394 6,345 6,375 6,354 6,258 6,122 6,082 6,038 5,935 5,916 5,970 6,256 6,415 5,973

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 6,399 6,304 6,205 6,123 6,167 6,175 6,237 6,743 7,226 7,432 7,427 7,370 7,405 7,380 7,268 7,110 7,065 7,014 6,893 6,871 6,934 7,266 7,451 6,937

2020 7,913 7,794 7,672 7,571 7,626 7,635 7,711 8,337 8,935 9,190 9,183 9,112 9,156 9,125 8,987 8,792 8,735 8,672 8,523 8,496 8,574 8,984 9,212 8,578

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Figure A6.8.16: 3rd Wed Oct Daily Profiles

2003

9,000

2005

2010

2015

2020

8,000

Demand (MW)

7,000 6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 4,916 4,791 4,741 4,739 4,755 4,918 5,381 5,980 6,049 6,036 5,991 5,978 5,986 5,977 5,803 5,595 5,553 5,498 5,530 6,083 6,081 5,812 5,539 5,196

31 December 2004

2001 4,647 4,579 4,517 4,500 4,530 4,676 5,055 5,675 5,731 5,699 5,643 5,579 5,519 5,487 5,327 5,122 5,090 5,026 5,080 5,787 5,827 5,517 5,205 4,946

2002 5,257 5,084 5,056 5,017 5,027 5,179 5,630 6,111 6,212 6,239 6,302 6,259 6,172 6,216 5,990 5,696 5,642 5,629 5,665 6,342 6,383 6,102 5,820 5,544

2003 5,489 5,344 5,365 5,321 5,346 5,464 5,792 6,400 6,593 6,661 6,663 6,625 6,576 6,495 6,377 6,221 6,182 6,078 6,348 6,820 6,710 6,356 6,037 5,786

Page 142 of 160

2005 5,283 5,167 5,076 5,030 5,059 5,231 5,637 6,269 6,380 6,328 6,351 6,314 6,211 6,252 6,169 5,972 5,986 5,806 6,118 6,669 6,697 6,417 6,026 5,670

2010 5,256 5,141 5,051 5,005 5,034 5,204 5,609 6,238 6,348 6,296 6,319 6,282 6,180 6,221 6,138 5,942 5,956 5,777 6,087 6,636 6,663 6,385 5,996 5,641

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 5,668 5,544 5,447 5,397 5,428 5,612 6,048 6,727 6,845 6,790 6,814 6,775 6,664 6,708 6,619 6,408 6,423 6,229 6,564 7,156 7,185 6,886 6,466 6,083

2020 6,584 6,439 6,327 6,268 6,305 6,519 7,025 7,813 7,951 7,886 7,915 7,869 7,741 7,792 7,688 7,443 7,461 7,236 7,625 8,312 8,346 7,998 7,511 7,066

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Figure A6.8.17: Peak Hourly Demand Daily Profiles

12/16/03

12,000

12/17/05

12/17/10

12/17/15

12/16/20

Demand (MW)

10,000 8,000 6,000 4,000 2,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/26/00 5,861 5,752 5,665 5,694 5,799 5,943 6,247 6,788 7,195 7,253 7,184 7,090 7,018 6,999 6,802 6,619 6,695 6,947 7,091 7,109 7,064 6,760 6,423 6,001

31 December 2004

12/18/01 6,240 6,096 6,059 6,072 6,154 6,365 6,697 7,393 7,547 7,574 7,669 7,488 7,434 7,403 7,306 7,096 7,235 7,553 7,611 7,535 7,320 7,029 6,753 6,449

12/11/02 6,069 5,960 5,875 5,840 5,924 6,125 6,534 7,170 7,298 7,451 7,404 7,322 7,303 7,369 7,244 7,018 7,177 7,554 7,591 7,515 7,304 7,066 6,709 6,402

12/16/03 5,968 5,847 5,784 5,770 5,797 5,964 6,372 7,077 7,165 7,127 7,104 7,086 7,091 7,114 7,021 6,952 7,047 7,385 7,409 7,324 7,218 6,879 6,697 6,303

12/17/05 5,938 5,817 5,755 5,741 5,768 5,935 6,340 7,042 7,129 7,092 7,068 7,051 7,055 7,078 6,986 6,917 7,012 7,348 7,372 7,287 7,182 6,845 6,664 6,272

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12/17/10 6,404 6,273 6,206 6,191 6,221 6,400 6,837 7,594 7,688 7,648 7,622 7,604 7,608 7,633 7,534 7,460 7,561 7,924 7,950 7,858 7,745 7,381 7,186 6,763

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

12/17/15 7,438 7,287 7,208 7,191 7,225 7,433 7,941 8,820 8,929 8,883 8,853 8,832 8,837 8,866 8,751 8,664 8,783 9,204 9,234 9,127 8,995 8,573 8,347 7,856

12/16/20 9,197 9,010 8,913 8,892 8,934 9,191 9,819 10,906 11,041 10,983 10,947 10,920 10,927 10,962 10,820 10,713 10,859 11,380 11,418 11,286 11,123 10,601 10,321 9,713

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Figure A6.8.18: Minimum Hourly Demand Daily Profiles

5/4/03

9,000

5/5/05

5/5/10

5/5/15

5/4/20

8,000

Demand (MW)

7,000 6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

10/1/00 4,246 4,125 4,073 4,048 4,107 4,250 4,736 5,226 5,445 5,518 5,585 5,544 5,514 5,496 5,253 5,111 5,070 4,958 4,890 5,415 5,665 5,418 5,153 4,860

31 December 2004

10/14/01 4,303 4,136 4,025 4,006 4,033 4,068 4,074 4,057 4,058 4,060 4,007 3,891 3,883 3,818 3,741 3,742 3,768 3,761 4,016 4,760 4,893 4,642 4,428 4,172

5/6/02 3,704 3,561 3,480 3,430 3,411 3,440 3,362 3,442 3,610 3,669 3,698 3,662 3,642 3,609 3,557 3,539 3,519 3,535 3,573 3,646 3,787 4,267 4,237 4,023

5/4/03 4,339 4,070 4,000 3,979 3,987 4,010 3,855 3,908 4,051 4,189 4,234 4,238 4,256 4,238 4,127 4,060 4,058 4,097 4,099 4,197 4,466 5,017 4,796 4,484

Page 144 of 160

5/5/05 4,317 4,049 3,980 3,959 3,967 3,990 3,835 3,889 4,030 4,168 4,213 4,216 4,235 4,217 4,106 4,040 4,038 4,077 4,078 4,176 4,444 4,991 4,772 4,462

5/5/10 4,656 4,367 4,292 4,269 4,278 4,303 4,136 4,193 4,346 4,494 4,543 4,547 4,567 4,547 4,428 4,357 4,355 4,396 4,398 4,503 4,792 5,383 5,147 4,812

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/5/15 5,408 5,072 4,985 4,959 4,969 4,998 4,804 4,871 5,048 5,220 5,277 5,281 5,305 5,282 5,143 5,060 5,058 5,106 5,108 5,231 5,566 6,252 5,978 5,589

5/4/20 6,686 6,272 6,163 6,132 6,144 6,179 5,940 6,023 6,242 6,454 6,525 6,530 6,559 6,531 6,359 6,257 6,254 6,314 6,316 6,468 6,883 7,730 7,391 6,910

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3

Appendix 6.9 Serbia Demand Forecasting

31 December 2004

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1. Historical Trend Analysis The data for Serbia was sourced from the national utility. A complete data set of historical electricity demand was made available for analysis. Figure A6.9.1: Historical Electricity Consumption (1) (1) (1) (2) Transmis Distrib Total Gross All Losses Population Net Energy Losses Losses Losses Demand Share of Intensity GWh GWh GWh GWh Gross ('000) kWh/cap 1990 1991 22,870 959 1,630 2,589 25,459 10.2% 1992 21,683 2,332 2,273 4,605 26,288 17.5% 1993 21,446 1,770 2,398 4,168 25,614 16.3% 1994 22,465 1,579 2,852 4,431 26,896 16.5% 1995 23,588 1,661 2,860 4,521 28,109 16.1% 1996 24,766 1,765 3,453 5,218 29,984 17.4% 1997 25,142 1,751 3,694 5,445 30,587 17.8% 1998 25,704 1,838 3,712 5,550 31,254 17.8% 7,748 3,318 1999 23,066 1,446 3,304 4,750 27,816 17.1% 7,721 2,987 2000 24,816 1,159 3,836 4,995 29,811 16.8% 7,688 3,228 2001 23,715 1,453 5,877 7,330 31,045 23.6% 7,668 3,093 2002 24,420 30,413 19.7% 7,653 3,191 2003 31,128 Sources: (1) EPS (2) Serbian Statistics office (1) Net Demand GWh

Gross

Net

34,000

Consumption GWh

32,000 30,000 28,000 26,000 24,000 22,000

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

20,000

Sources: (1) EPS

31 December 2004

Page 146 of 160

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Figure A6.9.2: Historical Sectoral Electricity Demand Domestic Demand GWh 1990 1991 10,718 1992 11,200 1993 13,195 1994 14,026 1995 14,523 1996 14,321 1997 14,038 1998 14,177 1999 13,862 2000 14,460 2001 13,995 2002 2003 Sources: (1) EPS

Industry Demand GWh 10,498 8,878 6,518 6,682 7,155 8,457 8,965 9,327 7,113 8,150 7,380 -

Other Demand GWh 1,654 1,605 1,733 1,757 1,910 1,988 2,139 2,200 2,091 2,206 2,340 -

Total Net Demand GWh 22,870 21,683 21,446 22,465 23,588 24,766 25,142 25,704 23,066 24,816 23,715 24,420 -

Domestic

Domestic Demand Growth 4.3% 15.1% 5.9% 3.4% -1.4% -2.0% 1.0% -2.3% 4.1% -3.3% -

Industry

Industry Demand Growth

Other Demand Growth

-18.2% -36.2% 2.5% 6.6% 15.4% 5.7% 3.9% -31.1% 12.7% -10.4% -

-3.1% 7.4% 1.4% 8.0% 3.9% 7.1% 2.8% -5.2% 5.2% 5.7% -

Total Net Demand Growth -5.5% -1.1% 4.5% 4.8% 4.8% 1.5% 2.2% -11.4% 7.1% -4.6% 2.9% -

Other

30,000

Consumption GWh

25,000 20,000 15,000 10,000 5,000

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

-

Sources: (1) EPS

31 December 2004

Page 147 of 160

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Figure A6.9.3: Historical System Load Factor Gross Demand GWh 1990 1991 25,459 1992 26,288 1993 25,614 1994 26,896 1995 28,109 1996 29,984 1997 30,587 1998 31,254 1999 27,816 2000 29,811 2001 31,045 2002 30,413 2003 31,128 Sources: (1) EPS

Auxilliary Demand GWh -

Pumping Demand GWh -

Gross Consump GWh 25,459 26,288 25,614 26,896 28,109 29,984 30,587 31,254 27,816 29,811 31,045 30,413 31,128

Gross Consmp Growth 0.0% 3.3% -2.6% 5.0% 4.5% 6.7% 2.0% 2.2% -11.0% 7.2% 4.1% -2.0% 2.3%

System Peak MW 6,141 6,060

System Peak Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -1.3%

System Load Factor

56.5% 58.6%

60% 58%

48% 46% 44% 42%

31 December 2004

Page 148 of 160

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

40%

0.032562 -0.025639 0.050051 0.0451 0.066705 0.020111 0.021807 -0.110002 0.071721 0.041394 -0.020355 0.023497

2002

50%

2001

52%

2003

54%

2000

System Load Factor

56%

-0.01319

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2. Forecast Assumptions

Pop ('000)

2020

2018

2002

2000

0%

2016

1%

2014

2%

2012

3%

2010

4%

2008

5%

2006

6%

2004

7%

Figure A6.9.4: Scenario Forecast GDP per Capita (1) (2) (3) Case 1 Case 2 Case 3 2000 2001 0.0% 0.0% 0.0% 2002 0.0% 0.0% 0.0% Case 1 Case 3 Case 2 2003 1.5% 1.5% 1.5% 2004 3.0% 3.0% 3.0% 2005 3.0% 3.0% 3.5% 2006 3.5% 3.5% 4.5% 2007 4.0% 4.0% 6.0% 2008 4.5% 4.5% 6.0% 2009 4.5% 4.5% 6.0% 2010 4.5% 4.5% 6.0% 2011 4.5% 4.5% 6.0% 2012 4.0% 4.0% 5.5% 2013 3.5% 3.5% 5.5% 2014 3.0% 3.0% 4.0% 2015 3.0% 3.0% 4.5% 2016 3.0% 3.0% 4.5% 2017 3.0% 3.0% 4.5% 2018 3.0% 3.0% 4.5% Source: LCIP [6] 2019 3.0% 3.0% 4.5% 2020 3.0% 3.0% 4.5% Source: LCIP [6] Figure A6.9.5: Forecast Population

yoy growth

7,700

0.00%

7,690

-0.05%

7,680

-0.10%

7,670

-0.15%

7,660

-0.20%

7,650

31 December 2004

2020

2018

2016

2014

Source: Serbian Statistics

2012

2010

2008

2006

-0.30% 2004

7,630 2002

-0.25% 2000

7,640

Pop ('000) ytd growth yoy growth 2000 7,688 2001 7,668 -0.26% 2002 7,653 -0.19% 2003 7,653 0.0% 0.00% 2004 7,653 0.0% 0.00% 2005 7,653 0.0% 0.00% 2006 7,653 0.0% 0.00% 2007 7,653 0.0% 0.00% 2008 7,653 0.0% 0.00% 2009 7,653 0.0% 0.00% 2010 7,653 0.0% 0.00% 2011 7,653 0.0% 0.00% 2012 7,653 0.0% 0.00% 2013 7,653 0.0% 0.00% 2014 7,653 0.0% 0.00% 2015 7,653 0.0% 0.00% 2016 7,653 0.0% 0.00% 2017 7,653 0.0% 0.00% 2018 7,653 0.0% 0.00% 2019 7,653 0.0% 0.00% 2020 7,653 0.0% 0.00% Source: Serbian Statistics office, LCIP [6]

Page 149 of 160

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3. Forecast Calculation Using the econometric demand forecasting model described in Chapter 3 of this report, together with GDP growth forecast assumptions, the following data are forecast for energy demand.

35,000

15,000 10,000 5,000 2006

2003

0

Source: PwC

GDP per Capita (95 US$) 2002 1,163 2003 1,272 2004 1,310 2005 1,349 2006 1,397 2007 1,453 2008 1,518 2009 1,586 2010 1,658 2011 1,732 2012 1,801 2013 1,864 2014 1,920 2015 1,978 2016 2,037 2017 2,098 2018 2,161 2019 2,226 2020 2,293 Source: PwC Year

31 December 2004

LF% 58.6% 60.0%

63.5%

63.5%

2018

20,000

2015

25,000

2012

30,000

2009

System Peak Demand

Gross Consumption GWh

40,000

Figure A6.9.6: Forecast Electricity System Parameters Gross Peak GWh MW 2003 31,128 6,060 GWh MW 2004 31,212 2005 31,285 5,957 2006 31,499 7000 2007 31,855 6800 2008 32,356 6600 2009 32,852 6400 2010 33,341 5,993 2011 33,823 6200 2012 34,132 6000 2013 34,728 5800 2014 35,153 2015 35,573 6,393 5600 2016 35,985 5400 2017 36,391 2018 36,789 2019 37,177 2020 37,556 6,745 Source: PwC Figure A6.9.7: Case 2 Economic Model Forecast Calculation Forecast Electricity Electricity Net Growth Intensity per capita Population Consumpt ('000) (GWh) (%) (kWh/GDP) (kWh pp) 21.4% 2.74 3,191 7,653 24,420 9.3% 2.57 3,266 7,653 24,994 3.0% 2.53 3,314 7,653 25,365 3.0% 2.49 3,363 7,653 25,736 3.5% 2.45 3,428 7,653 26,233 4.0% 2.42 3,510 7,653 26,863 4.5% 2.38 3,611 7,653 27,633 4.5% 2.34 3,713 7,653 28,418 4.5% 2.30 3,818 7,653 29,218 4.5% 2.27 3,924 7,653 30,033 4.0% 2.23 4,013 7,653 30,713 3.5% 2.19 4,083 7,653 31,249 3.0% 2.15 4,133 7,653 31,632 3.0% 2.11 4,182 7,653 32,009 3.0% 2.08 4,231 7,653 32,381 3.0% 2.04 4,279 7,653 32,746 3.0% 2.00 4,325 7,653 33,104 3.0% 1.96 4,371 7,653 33,453 3.0% 1.93 4,416 7,653 33,794

Page 150 of 160

63.6%

D&T Gross Losses Consumpt (%) (GWh) 19.7% 30,413 19.7% 31,128 18.7% 31,212 17.7% 31,285 16.7% 31,499 15.7% 31,855 14.6% 32,356 13.5% 32,852 12.4% 33,341 11.2% 33,823 10.0% 34,132 10.0% 34,728 10.0% 35,153 10.0% 35,573 10.0% 35,985 10.0% 36,391 10.0% 36,789 10.0% 37,177 10.0% 37,556

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Figure A6.9.8: Comparison with other Forecasts

Case 2 PwC EPS Basic

Case 1 PwC EPS Min

Case 3 PwC EPS Max

Gross Consumption (GWh)

50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

-

Source: PwC 2004, EPS 2003 Case 2 Case 1 GWh 2000 29,811 2001 31,045 2002 30,413 2003 31,128 31,128 2004 31,212 30,665 2005 31,285 30,297 2006 31,499 30,027 2007 31,855 29,858 2008 32,356 29,795 2009 32,852 29,828 2010 33,341 29,948 2011 33,823 30,150 2012 34,132 30,413 2013 34,728 31,138 2014 35,153 31,909 2015 35,573 32,729 2016 35,985 33,596 2017 36,391 34,512 2018 36,789 35,477 2019 37,177 36,491 2020 37,556 37,556 Source: PwC 2004, EPS 2003 31 December 2004

Case 3

EPS Basic EPS Min

31,128 31,026 31,056 31,368 32,117 32,862 33,601 34,332 35,053 35,592 36,601 37,078 37,715 38,334 38,933 39,508 40,057 40,574

Page 151 of 160

31,128 31,170 31,603 32,122 32,677 33,388 33,852 34,429 35,321 36,284 36,999 37,567 38,024 38,561 39,016 39,478 39,986 40,635

31,128 31,014 31,110 31,361 31,642 32,061 32,231 32,433 33,105 33,839 34,329 34,677 34,971 35,391 35,734 36,079 36,465 36,978

EPS Max

31,128 31,315 32,033 32,814 33,643 34,644 35,410 36,349 37,497 38,719 39,696 40,529 41,250 42,057 42,723 43,332 43,997 44,817

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5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -

GWh

2018

2015

2012

2009

2006

2003

2000

Source: PwC

kWh/cap ytd growth yoy growth 2000 3,228 kWh/cap yoy growth 2001 3,093 -4.2% 2002 3,191 3.2% 2003 3,266 0.0% 2.4% 4% 2004 3,314 1.5% 1.5% 3% 2005 3,363 3.0% 1.5% 2% 2006 3,428 5.0% 1.9% 1% 2007 3,510 7.5% 2.4% 2008 3,611 10.6% 2.9% 0% 2009 3,713 13.7% 2.8% -1% 2010 3,818 16.9% 2.8% -2% 2011 3,924 20.2% 2.8% -3% 2012 4,013 22.9% 2.3% -4% 2013 4,083 25.0% 1.7% -5% 2014 4,133 26.6% 1.2% 2015 4,182 28.1% 1.2% 2016 4,231 29.6% 1.2% 2017 4,279 31.0% 1.1% 2018 4,325 32.4% 1.1% 2019 4,371 33.8% 1.1% 2020 4,416 35.2% 1.0% Source: PwC Figure A6.9.10: Forecast Final Net Demand Annual Growth

Final demand kWh/capita

Figure A6.9.9: Forecast Final Demand per Capita

yoy growth 4% 3% 2% 1% 0% -1% -2% -3% -4% -5%

35,000 30,000 25,000 20,000 15,000 10,000 5,000

31 December 2004

2018

2015

2012

2009

2006

2003

Source: PwC

2000

-

Annual Growth

Final Demand (GWh)

40,000

GWh ytd growth yoy growth 2000 24,816 2001 23,715 -4.4% 2002 24,420 3.0% 2003 24,994 0.0% 2.4% 2004 25,365 1.5% 1.5% 2005 25,736 3.0% 1.5% 2006 26,233 5.0% 1.9% 2007 26,863 7.5% 2.4% 2008 27,633 10.6% 2.9% 2009 28,418 13.7% 2.8% 2010 29,218 16.9% 2.8% 2011 30,033 20.2% 2.8% 2012 30,713 22.9% 2.3% 2013 31,249 25.0% 1.7% 2014 31,632 26.6% 1.2% 2015 32,009 28.1% 1.2% 2016 32,381 29.6% 1.2% 2017 32,746 31.0% 1.1% 2018 33,104 32.4% 1.1% 2019 33,453 33.8% 1.1% 2020 33,794 35.2% 1.0% Source: PwC

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4. Forecast variation in monthly electricity demand Following the analysis in Chapter 3 of the main report, we have forecast a change in the share of annual energy demand and peak demand. We detail here the forecast annual change of these parameters.

Figure A6.9.11: Forecast Monthly Energy Demand

Monthly/Annual Energy Demand

2000

2001

2002

2003

2005

2010

2015

2020

13% 12% 11% 10% 9% 8% 7% 6%

Jan Source: PwC

Jan 2000 2001 11.2% 2002 11.7% 2003 10.9% 2004 10.8% 2005 10.6% 2006 10.5% 2007 10.4% 2008 10.3% 2009 10.2% 2010 10.0% 2011 10.0% 2012 10.0% 2013 10.0% 2014 10.0% 2015 10.0% 2016 10.0% 2017 10.0% 2018 10.0% 2019 10.0% 2020 10.0% Source: PwC

Feb

Feb

31 December 2004

9.9% 9.0% 10.5% 10.4% 10.3% 10.3% 10.2% 10.1% 10.1% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

Mar

Mar 9.1% 9.1% 9.8% 9.7% 9.7% 9.7% 9.7% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6%

Apr

Apr 8.3% 8.2% 8.1% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2%

May

May 6.6% 6.8% 6.6% 6.6% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7%

Jun

Jun 6.3% 6.6% 6.4% 6.6% 6.7% 6.8% 6.9% 7.1% 7.2% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3%

Jul

Jul 6.3% 6.6% 6.5% 6.6% 6.8% 6.9% 7.1% 7.2% 7.4% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6%

Page 153 of 160

Aug

Aug 6.4% 6.7% 6.6% 6.8% 6.9% 7.0% 7.2% 7.3% 7.5% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6% 7.6%

Sep

Oct

Nov

Dec

Sep

Oct

Nov

Dec

6.6% 6.9% 6.6% 6.6% 6.7% 6.7% 6.7% 6.7% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8%

7.4% 8.4% 8.4% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3%

9.8% 8.9% 8.9% 8.8% 8.7% 8.6% 8.6% 8.5% 8.4% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3%

12.1% 11.2% 10.7% 10.5% 10.4% 10.2% 10.1% 9.9% 9.8% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6% 9.6%

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Figure A6.9.12: Forecast Monthly Peak Demand

Monthyl/Annual Peak Demand

2000

2001

2002

2003

Apr

May

Jun

2005

2010

2015

2020

100% 90% 80% 70% 60% 50%

Jan Source: PwC

Feb

Mar

Jul

Aug

Sep

Oct

Nov

Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001 96.5% 98.3% 90.2% 80.3% 60.0% 56.7% 53.6% 55.9% 62.9% 75.2% 85.2% 100.0% 2002 100.0% 80.7% 82.0% 78.1% 59.7% 59.6% 56.5% 59.1% 71.1% 74.5% 82.1% 92.2% 2003 100.0% 94.3% 84.4% 83.4% 60.4% 60.2% 58.0% 60.2% 64.9% 81.4% 81.6% 90.6% 2005 100.0% 95.3% 85.8% 85.4% 62.0% 64.0% 62.1% 64.1% 66.8% 83.0% 81.8% 90.0% 2010 100.0% 97.8% 89.5% 90.9% 66.3% 74.1% 73.3% 74.8% 72.1% 87.5% 82.2% 88.6% 2015 100.0% 97.8% 89.5% 90.9% 66.3% 74.1% 73.3% 74.9% 72.1% 87.5% 82.2% 88.5% 2020 100.0% 98.3% 89.5% 90.9% 66.3% 74.1% 73.3% 74.9% 72.1% 87.7% 82.2% 88.6% Source: PwC

31 December 2004

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5. Historical and forecast daily profiles Using a combination of the 2003 load profiles for the 3rd week of January, April, July and October and the previous analysis of changing seasonal demand, we compare forecast and historical profiles. Figure A6.9.13: 3rd Wed January Daily Profiles

2003

7,000

2005

2010

2015

2020

Demand (MW)

6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 4,634 4,261 3,925 3,945 3,812 4,156 4,783 5,310 5,592 5,631 5,598 5,693 5,391 5,489 5,325 5,461 5,516 5,670 5,816 5,664 5,543 5,382 5,286 5,182

2002 5,111 4,664 4,462 4,268 4,191 4,383 4,893 5,292 5,505 5,587 5,545 5,530 5,472 5,356 5,221 5,267 5,429 5,575 5,658 5,686 5,530 5,393 5,301 5,400

2003 4,901 4,573 4,272 4,146 4,086 4,273 4,668 5,097 5,177 5,190 5,109 5,040 4,851 4,659 4,603 4,620 5,024 5,284 5,414 5,353 5,332 5,119 4,990 4,842

Page 155 of 160

2005 4,818 4,495 4,199 4,076 4,017 4,200 4,589 5,010 5,089 5,102 5,022 4,954 4,769 4,580 4,525 4,541 4,939 5,194 5,322 5,262 5,241 5,032 4,905 4,760

2010 4,847 4,523 4,225 4,100 4,041 4,226 4,617 5,041 5,120 5,133 5,053 4,985 4,798 4,608 4,552 4,569 4,969 5,226 5,354 5,294 5,273 5,063 4,935 4,789

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 5,171 4,825 4,507 4,374 4,311 4,508 4,925 5,377 5,462 5,475 5,390 5,317 5,118 4,915 4,856 4,874 5,300 5,575 5,712 5,647 5,625 5,401 5,264 5,108

2020 5,455 5,090 4,755 4,614 4,548 4,756 5,195 5,673 5,762 5,776 5,686 5,610 5,399 5,185 5,123 5,142 5,592 5,881 6,026 5,958 5,935 5,697 5,554 5,389

PwC Consortium

CARDS 52276 - GIS

Serbia Final Demand Forecast

Figure A6.9.14: 3rd Wed April Daily Profiles

2003

6,000

2005

2010

2015

2020

Demand (MW)

5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 3,504 3,230 3,106 2,979 2,762 3,214 3,772 4,417 4,595 4,602 4,465 4,415 4,360 4,132 3,898 3,875 3,762 3,608 3,706 4,104 4,524 4,370 4,088 3,839

2002 3,028 2,754 2,571 2,422 2,441 2,681 3,106 3,563 3,626 3,638 3,552 3,531 3,449 3,382 3,248 3,220 3,289 3,373 3,544 4,000 4,158 4,031 3,610 3,311

2003 3,229 2,928 2,669 2,582 2,494 2,799 3,297 3,781 3,847 3,942 3,942 3,858 3,801 3,650 3,597 3,527 3,573 3,542 3,608 4,069 4,335 4,199 3,821 3,534

Page 156 of 160

2005 3,252 2,948 2,688 2,600 2,511 2,819 3,320 3,807 3,874 3,970 3,970 3,885 3,828 3,676 3,622 3,552 3,598 3,567 3,633 4,097 4,365 4,228 3,848 3,559

2010 3,481 3,156 2,877 2,783 2,689 3,017 3,554 4,076 4,147 4,249 4,249 4,159 4,097 3,935 3,878 3,802 3,852 3,818 3,889 4,386 4,673 4,527 4,119 3,810

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 3,713 3,367 3,069 2,969 2,868 3,219 3,792 4,348 4,424 4,533 4,533 4,437 4,371 4,198 4,137 4,056 4,109 4,073 4,149 4,679 4,985 4,829 4,394 4,064

2020 3,917 3,552 3,237 3,132 3,025 3,395 3,999 4,586 4,666 4,782 4,782 4,680 4,611 4,427 4,363 4,278 4,334 4,296 4,377 4,936 5,258 5,093 4,635 4,287

PwC Consortium

CARDS 52276 - GIS

Serbia Final Demand Forecast

Figure A6.9.15: 3rd Wed Jul Daily Profiles

2003

5,000

2005

2010

2015

2020

4,500

Demand (MW)

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 2,364 2,149 1,998 1,882 1,928 2,032 2,373 2,681 2,856 2,961 2,972 3,061 3,074 3,041 2,946 2,866 2,793 2,748 2,676 2,768 3,056 3,283 3,004 2,708

2002 2,547 2,307 2,115 2,082 2,055 2,148 2,488 2,750 2,962 3,028 3,124 3,128 3,158 3,128 3,027 2,943 2,928 2,836 2,810 2,954 3,065 3,267 3,018 2,745

2003 2,564 2,244 2,028 1,979 1,973 2,090 2,404 2,717 2,921 2,952 3,081 3,143 3,120 3,129 3,006 2,987 2,838 2,827 2,769 2,898 3,089 3,383 3,269 2,918

Page 157 of 160

2005 2,700 2,363 2,135 2,084 2,078 2,201 2,531 2,861 3,076 3,108 3,244 3,310 3,285 3,295 3,165 3,145 2,988 2,977 2,916 3,052 3,253 3,562 3,442 3,073

2010 3,205 2,805 2,535 2,474 2,466 2,613 3,005 3,396 3,651 3,690 3,851 3,929 3,900 3,911 3,758 3,734 3,548 3,534 3,461 3,623 3,861 4,229 4,086 3,648

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 3,418 2,991 2,703 2,638 2,630 2,786 3,205 3,622 3,894 3,935 4,107 4,190 4,159 4,171 4,007 3,982 3,783 3,768 3,691 3,863 4,118 4,510 4,358 3,890

2020 3,605 3,155 2,851 2,782 2,774 2,939 3,380 3,820 4,107 4,151 4,332 4,419 4,387 4,399 4,226 4,200 3,990 3,975 3,893 4,075 4,343 4,756 4,596 4,103

PwC Consortium

CARDS 52276 - GIS

Serbia Final Demand Forecast

Figure A6.9.16: 3rd Wed Oct Daily Profiles

2003

6,000

2005

2010

2015

2020

Demand (MW)

5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

2000 -

31 December 2004

2001 2,407 2,311 2,136 2,086 1,912 2,355 2,966 3,390 3,501 3,468 3,407 3,349 3,271 3,165 3,051 3,017 3,084 3,205 3,779 3,990 3,891 3,446 3,302 2,848

2002 3,170 2,864 2,604 2,530 2,543 2,836 3,393 3,821 3,892 3,812 3,653 3,599 3,498 3,362 3,270 3,284 3,255 3,347 4,035 4,316 4,109 3,935 3,635 3,263

2003 2,959 2,738 2,479 2,418 2,406 2,662 3,213 3,730 3,904 3,934 3,957 3,949 3,951 3,872 3,749 3,734 3,790 3,858 4,339 4,496 4,367 4,127 3,790 3,460

Page 158 of 160

2005 2,959 2,738 2,479 2,418 2,406 2,662 3,213 3,730 3,904 3,934 3,957 3,949 3,951 3,872 3,749 3,734 3,790 3,858 4,339 4,496 4,367 4,127 3,790 3,460

2010 2,968 2,746 2,486 2,425 2,413 2,670 3,223 3,741 3,916 3,946 3,969 3,961 3,963 3,884 3,760 3,745 3,801 3,870 4,352 4,509 4,380 4,139 3,801 3,470

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

2015 3,145 2,910 2,635 2,570 2,558 2,830 3,415 3,965 4,150 4,182 4,206 4,198 4,200 4,116 3,985 3,969 4,029 4,101 4,612 4,779 4,642 4,387 4,029 3,678

2020 3,356 3,105 2,811 2,742 2,728 3,019 3,644 4,230 4,427 4,461 4,487 4,478 4,480 4,391 4,251 4,234 4,298 4,375 4,920 5,098 4,952 4,680 4,298 3,924

PwC Consortium

CARDS 52276 - GIS

Serbia Final Demand Forecast

Figure A6.9.17: Peak Hourly Demand Daily Profiles

1/13/03

8,000

1/14/05

1/14/10

1/14/15

1/14/20

7,000

Demand (MW)

6,000 5,000 4,000 3,000 2,000 1,000

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

12/18/01 5,482 5,068 4,793 4,594 4,584 4,779 5,368 5,841 5,994 6,203 6,108 6,133 6,077 5,906 5,919 6,052 6,337 6,279 6,238 6,204 6,073 5,897 5,836 5,881

1/5/02 5,415 5,133 4,722 4,497 4,424 4,482 4,648 4,881 5,283 5,502 5,574 5,597 5,590 5,610 5,575 5,526 5,948 6,141 6,044 6,012 5,970 5,888 5,778 5,695

1/13/03 5,115 4,813 4,524 4,417 4,300 4,498 4,962 5,397 5,594 5,678 5,687 5,616 5,491 5,329 5,257 5,298 5,768 6,038 6,051 6,060 5,914 5,751 5,621 5,376

Page 159 of 160

1/14/05 5,028 4,731 4,447 4,342 4,227 4,422 4,878 5,305 5,499 5,581 5,590 5,521 5,398 5,238 5,168 5,208 5,670 5,935 5,948 5,957 5,813 5,653 5,525 5,285

1/14/10 5,059 4,760 4,474 4,368 4,253 4,449 4,907 5,338 5,532 5,616 5,624 5,554 5,431 5,270 5,199 5,240 5,705 5,972 5,984 5,993 5,849 5,688 5,559 5,317

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Source: PwC

11

9

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1/14/15 5,396 5,078 4,773 4,660 4,537 4,745 5,235 5,694 5,902 5,990 6,000 5,925 5,793 5,622 5,546 5,589 6,085 6,370 6,384 6,393 6,239 6,067 5,930 5,672

1/14/20 5,693 5,357 5,035 4,916 4,786 5,006 5,523 6,007 6,226 6,320 6,330 6,251 6,111 5,931 5,851 5,897 6,420 6,720 6,735 6,745 6,582 6,401 6,256 5,983

PwC Consortium

CARDS 52276 - GIS

Serbia Final Demand Forecast

Figure A6.9.18: Minimum Hourly Demand Daily Profiles

7/14/03

4,500

5/3/05

5/3/10

5/3/15

5/2/20

4,000

Demand (MW)

3,500 3,000 2,500 2,000 1,500 1,000 500

MW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: PwC

1/0/00 -

31 December 2004

5/10/01 2,283 2,088 1,908 1,875 1,937 2,063 2,489 2,946 3,111 3,190 3,225 3,317 3,151 3,095 3,020 2,973 2,953 2,841 2,997 3,227 3,463 3,296 3,008 2,616

8/11/02 2,459 2,205 2,019 2,007 1,985 2,081 2,367 2,667 2,886 2,980 3,015 3,118 3,086 3,044 2,937 2,862 2,825 2,711 2,763 2,874 3,099 3,086 2,857 2,581

7/14/03 2,271 2,114 2,002 1,912 1,775 1,899 2,265 2,638 2,808 2,909 3,010 2,999 3,053 2,947 2,900 2,805 2,766 2,691 2,651 2,743 3,013 3,313 3,061 2,756

Page 160 of 160

5/3/05 2,452 2,126 1,967 1,911 1,860 1,905 2,158 2,449 2,723 2,854 2,910 2,878 2,912 2,891 2,809 2,749 2,683 2,625 2,637 2,827 3,352 3,351 3,161 2,791

5/3/10 2,634 2,284 2,113 2,053 1,998 2,047 2,319 2,631 2,926 3,067 3,126 3,092 3,128 3,106 3,018 2,953 2,882 2,821 2,832 3,037 3,601 3,600 3,396 2,998

23

21

19

17

15

13

Source: PwC

11

9

7

5

3

1

-

5/3/15 2,812 2,438 2,255 2,191 2,132 2,184 2,475 2,808 3,123 3,273 3,337 3,300 3,339 3,315 3,221 3,152 3,076 3,011 3,023 3,242 3,844 3,842 3,625 3,200

5/2/20 2,965 2,571 2,378 2,311 2,248 2,303 2,610 2,961 3,293 3,451 3,518 3,479 3,521 3,495 3,396 3,323 3,244 3,174 3,188 3,418 4,053 4,052 3,822 3,375

PwC Consortium