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Central Europe: Power Industries Must Be Modernized

Warsaw, 23 October 1997 (RFE/RL) - Energy experts attending a regional forum of the World Energy Council in Warsaw say the countries of Central and Eastern Europe are facing a major restructuring of their power industry, which is obsolete and requires modernization.

The group of scientists, government energy officials and managers of energy companies, also say that some 112 million people living in the 11 countries in the region, excluding the Commonwealth of the Independent States, are facing a gradual but substantial growth of energy prices in the next 20 years that will match prices in the West.

The World Energy Council (WEC) is a non government organization which groups about 100 states. Its three-day forum is held this week (Oct. 21-23) in Warsaw, before the world congress in the Texas city of Houston next year.

"The energy economies of Central and Eastern Europe emerge slowly from the depression of the early 1990s, but remain characterized by the patterns of the past," said Dr. Klaus Bredow, director of the WEC East-West European Energy Program in Geneva. He characterized these as continued high energy use, artificially low energy prices, insufficient investment, high trade dependence on Russia for oil and gas, and pollution resulting from continued domination of fossil fuels.

The experts said the countries in the region are using about half the electrical energy of western Europe.

The Czech Republic is the most advanced in the utilization of electrical energy, followed by Hungary.

The experts said modernization of the energy sector will be costly. Poland, for example, needs to spend $3 billion annually to upgrade its power sector.

The privatization of the energy sector is a vital task for the region. All the experts agreed that privatization will introduce competition in the power industry. But the customers will have to wait from 10 to 20 years before the privatization process is complete and prices stabilize.

Conference participants pointed out modernization of the sector will also result in improvement of the environment due to the application of modern technologies.

The experts said that restructuring of the energy sector in the region will enhance trade exchanges in Europe. "It will advance integration process of the region and consolidate its ties with the European Union," said Zbigniew Bicki, the Polish representative in the WEC.