Central & Eastern Europe offers a pipeline of opportunities for British energy companies

The GREAT Energy Summit kicks off this morning, with more than 200 energy sector specialists from the UK and from across Central & Eastern Europe (CEE) coming together in Warsaw. Although the event is in Poland, it will present the opportunities that exist for UK companies across the whole of CEE – and, in turn, it will demonstrate to companies in this region what British business has to offer.

Sometimes, numbers are so big they are difficult to get our heads round, but I am going to start with a VERY big number: Over the next 10-20 years, more than £300 billion will be invested across CEE to upgrade existing energy infrastructure, build new capacity, tap into new sources of energy supply, reduce per capita energy consumption and meet low carbon targets.

What is driving these modernisation programmes and why are they happening now? There are a few factors:

First, perhaps most importantly, the region has suffered from a legacy of under-investment since the democratic changes 25 years ago. It has left over 60% of electricity generation assets over 30 years old, for example. These assets are now under serious strain, not least because energy demand is growing fast. Forecasts estimate that energy demand will grow by 30% in CEE over the next 15 years, compared with an OECD average of 4%. In the shorter-term, growth in the demand for gas is forecast to rise by 8-12% by 2023, most of which will be felt over the next three years.

The EU has played an important role too. EU climate change and industrial emissions regulations have sparked significant investment into renewables and also focused minds on the vital importance of making energy systems more efficient. At the same time, nearly £150 billion in EU funds will flow into the region between 2014 and 2020. The energy sector will absorb a strong proportion of this money.

Finally, there is a high dependence on Russian gas across CEE, with six countries in the region source more than 80% of their gas supply from Russia. This places huge importance on the diversification of supply, which also drives investment.

The Energy Summit will focus in particular on nuclear energy, oil & gas and clean coal.  This is partly a consequence of the scale of the opportunities that exist in these three areas. In nuclear, for example, six CEE countries – Poland, Bulgaria, Czech Republic, Hungary, Romania and Slovakia – have reactors under construction or planned and market opportunities are estimated at over £40 billion in new build, lifetime extensions and waste management / decommissioning. However, they were also chosen because these are all areas in which the UK is a recognised world leader, with the kind of innovative technologies that this region genuinely needs.

We are delighted that Amber Rudd, the Secretary of State for Energy and Climate Change, will be with us in Warsaw for the Energy Summit. Her presence is better evidence than any statistic of the strategic importance that the British government places in the energy sector in this region. We are very confident that the Energy Summit will be an important milestone in turning the scale of the opportunity that exists in CEE into more contracts for British companies, contracts that will ultimately benefit both the UK and CEE.