CEE: Net electricity production from renewables

Erste Bank Research Team Erste Bank

On the radar

Industrial output growth in Poland declined by -2.0% y/y in February, more than expected. Employment dropped by -0.9% y/y while nominal wage growth slowed to 7.9%. Producer prices dropped by -1.9% y/y in February.
In Croatia real wage growth slowed to 9.2% in January, while February’s unemployment remained unchanged at 5.4%. • In Slovakia unemployment rate in February was at 4.9%.
In Serbia, current account balance landed at EUR -119 million in January.
Today, Slovakia publishes current account data at 9 AM CET.
Slovenia releases producer prices and real wage growth at 10.30 AM CET.

Economic developments

Among EU countries, Denmark had the highest share of renewables in its net electricity generation with 88.4%, coming mostly from wind, followed by Portugal (87.5%, mostly wind and hydro) and Croatia (73.7%, mostly hydro). At the EU level, Wind and hydro power accounted for more than two-thirds of the total electricity generated from renewable sources (39.1% and 29.9% respectively). The remaining one-third of electricity came from solar (22.4%). Within the region, apart from Croatia, only Romania has a share of renewables and biofuels in net electricity generation above the EU average (50% vs.47% respectively). All other countries have the share below the EU average and most of them close to 30%. Czechia has the lowest share of renewables in net electricity generation not only in the region but in the whole EU. It should be noted, however, that Czechia and Slovakia have relatively highs share of nuclear power in net electricity generation. Czechia used more than 40% of nuclear power, like Hungary. Slovakia uses even more, over 60 percent, that is on pair with France.

Market developments

The FX and bond market are relatively stable in the region. In Czechia, another central banker Kubicek said he leans toward a pause in easing cycle at the upcoming meeting next week. The economic releases in Poland for February (slowing wage growth and industrial output growth below expectations) support the dovish wing in the central bank. It seems that Slovak Prime Minister Robert Fico managed to restore his parliamentary majority, potentially breaking an impasse lasting last few months. The 79-seat majority should be restored in the parliament session starting on March 25.

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Erste Bank Research Team

Erste Bank

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