Eastern European states use more energy via households and less via industry

“When assessing the potential risks of the energy crisis towards the property sector, the relics of the communist past can still be seen throughout all of Central and Eastern Europe so, looking at the structure and patterns of energy consumption reveals some hints. Each country has its own set of specific challenges which require complex public policies to tackle” – points out Silviu Pop, Director of Research – CEE & Romania at Colliers.

Colliers’ recent report shows that in some respects, the countries within the CEE-6 group cannot be further from each other in terms of energy consumption per capita and energy intensity – which is defined by the ratio between the units of energy required to generate a unit of GDP – writes the Property Forum referring to the Colliers report.

Less energy, less productivity?

The Czech Republic is a fairly energy-intensive economy both nominally and in real terms. However, Bulgaria, Hungary and Poland have quite low levels of energy consumption per capita, but at the same time, they seem less productive compared to the energy they consume.

They form a rather heterogeneous group by looking at the structure of energy consumption in the European Union and comparing it to the six countries researched. This highlights how different these countries’ economic structures are, as well as the different stages of their economic convergence to the Western European levels. Averaging things out among the CEE-6 countries and comparing the figures to the Eurozone it shows that Western European countries have a more significant share of energy consumption for commercial and public services, whereas Eastern European states tend to use more energy via households and, to a lesser degree, via their industry.

Low consumption indicates a lower level of economic development

The fact that Romania’s energy consumption is the lowest in the EU, but the other CEE-6 countries are also in the lower part of the ranking, is probably a sign of the lower level of economic development and industrialization. Indicating another trend, the Czech Republic has the 7th highest energy consumption per capita in the EU, more than double that of Romania’s, which probably reflects the country’s strong industrial base.

“Slovakia and Romania have the smallest urban population percentages in almost all of Europe (at around 54%), with Poland not too far ahead at 60% versus over 80% in Western Europe. One can argue that the efficiency of heating and electricity distribution drops significantly when it is spread over a wider area. Secondly, it is quite possible that construction standards have only more recently started to catch up to Western Europe, but have lagged for many decades, leading to historic differences in certain respects. Lastly, with regards to a higher share of industrial energy usage, this comes back to the structure of the economy, as CEE-6 economies have less of a service-driven economy than Western countries, though the gap has been shrinking amid the convergence process”- summarizes Silviu Pop.

There is still room for improvement

CEE countries appear to be doing fairly well in terms of energy consumption, but there are areas where they lag behind as some sectors show higher energy consumption than more developed ones, suggesting a need for improvement. These are mostly related to the residential and industrial sectors in many countries. However, there are rather large differences between countries, as Poland, for instance, tends to have a bigger share of energy consumption for agriculture and transportation than the Eurozone while having a smaller share of industrial consumption.


You might also like