South-east Europe is made up of 11 countries spanning an area of over 850 000 km² with a population of 76 million. A regional energy perspective must also contemplate Turkey joining the European Union at some stage, which would add 800 000 km² and a further 73 million people. South - east Europe would thus comprise 150 million people living in an area of over 1.6 million km², with mountainous borders in the Alps, the Carpathians, Caucasus and Ionian, Adriatic, Aegean, Mediterranean and Black seas.

Despite enormous diversity each SEE country shares a common objective - full membership in the EU (Bulgaria and Romania became EU members in 2007), if they are not already members. To this end, their long-term national strategies of sustainable socio-economic development are aimed at a fast transition process and the achievement of EU standards in every walk of life.

Given the current state of most SEE economies such a change is not possible without the modernisation of the energy sector. The key to this is new investment in modern power generation capacity, using, economically effective, energy efficient and ecologically sound technology.

Economic indicators show that SEE countries are at varying stages of development. Albania, Bosnia and Herzegovina, Montenegro and Macedonia, with a population of less than 12 million, can be classified as underdeveloped. Bulgaria, Croatia, Romania and Serbia comprise 42 million people with a GDP per capita just 20 percent of the EU average. The remaining three countries, Greece, Hungary and Slovenia are particularly important as transit countries and are more developed, but average GDP per capita is half that of EU countries.

A similar contrast exists when it comes to specific energy consumption (primary, final, electrical or natural gas). This is especially true in considering the efficiency in primary and final energy use, as illustrated in the diagrams shown.

Given the economic situation and a long period of limited investments in new energy-generation capacity, the energy sector in the region ( with an installed capacity of about 76 GW, or 1 kW per capita and total production of about 280 TWh), cannot meet even the current demands made of it. Existing capacities therefore cannot provide the energy and stability implied by faster economic growth. Many countries in the region have a GDP growth rate of 5%, which goes hand in hand with an increase in electricity consumption, especially by households and service sectors, which account for more than 60% of the total energy consumption.

Estimates generally show that in the next 10 to 15 years the average rate of growth in electricity consumption in the region will be higher than 3% per year (5 % for the less developed countries, 3.3 % for the medium developed countries and over 2% for the most developed). This is the outlook for a market of 30 million tariff consumers and several hundred direct (industrial) consumers.

Against this backdrop it is worth bearing in mind that the region, although generally lacking in high quality fossil fuels (oil and natural gas, and hard coal) has large, exploitable and economic hydro potential (1.7 times as much as the potential currently used), as well as rich lignite reserves (the largest in Europe, at circa 20 billion tons).

Over 60% of regional conventional thermal power plants have modest operating performances and predominantly use lignite as fuel (over 50%). There is a relatively high use of natural gas (over 20%) and liquid fuel (16%). These indicators, among others, point to the obvious need for new power plants in the region. 

Assuming that remaining non-EU members will have candidate status in the relatively near future, it is realistic to expect a significant influx of foreign capital into the region. That foreign capital will itself contribute to the faster economic development and will induce additional energy demand. This is particularly important given the long and uncertain economic charted for the most countries of the region, particularly amongst the least developed.