JOURNAL OF EASTERN EUROPEAN AND CENTRAL ASIAN RESEARCH Vol.6 No.2 (2019)
www.ieeca.org/journal 270
AN EVALUATION OF GROSS INLAND ENERGY CONSUMPTION
OF SIX CENTRAL EUROPEAN COUNTRIES
Róbert Magda
Szent István University, Gödöllő, Hungary
North-West University, Vanderbijlpark , South Africa
Norbert Bozsik
Eszterházy Károly University, Eger, Hungary
Natanya Meyer
North-West University, Vanderbijlpark, South Africa
ABSTRACT
The study provides a comprehensive overview of the current structure and utilization of energy
production of six Central European countries (Poland, Czech Republic, Slovakia, Bulgaria, Hungary and
Romania) focusing on the dependence on energy imports. The purpose of the article was to analyse the
gross inland energy consumption of these six countries and to examine the relationship between
renewable energy and non-renewable energy sources. A comparative time series analysis method using
data from 2010 to 2016 was utilized. In addition, partial correlation analysis under control variables to
determine whether the relationship calculated in the correlation matrix exists or not was applied.
Results indicated that in the European Union, the renewables have mainly replaced nuclear energy. A
combination of renewables and natural gas replaced the coal in Poland, Czech Republic, Slovakia and
Bulgaria. Findings were inconclusive to prove this in Hungary and Romania. The energy production
structure of the six Central European countries varies due to the differences in natural endowments.
However, the results showed that the renewables mainly replaced coal.
Keywords: Central European countries, correlation matrix, energy consumption, Sankey diagram
DOI: http://dx.doi.org/10.15549/jeecar.v6i2.291
INTRODUCTION
In the recent decades, the world economic
growth was significant due to the low cost of
natural resources used for production and
transportation. Today, only a few regions in the
world are producing fossil fuels. The political
situation in most of these regions is unstable.
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Therefore, these regions are fairly uncertain
sources of energy (Harangi-Rakos et al., 2017).
With the growth of the world’s population, the
energy consumption is significantly increasing,
mainly in the fast growing Asian and African
regions (British Patrol, 2018). In addition to the
growing production and the change in lifestyles,
especially in developed countries, energy
demand also increased (Fodor, 2012). The
improvement of energy efficiency reduces the
growing demand for energy (Popp et al., 2018a;
Popp et al., 2018b), however renewable energy
has become a key issue to partially replace the
fossil energy. The role of renewable energy is
significant even if the renewables are often
available in smaller quantities, the production
cannot be regulated, and some of them depend
on the weather conditions. The purpose of the
article was therefore, to analyse the gross inland
energy consumption of these six countries and
to examine the relationship between renewable
energy and non-renewable energy sources.
REVIEW OF LITERATURE
The potential for renewable energy resources
is enormous because they can exponentially
exceed the world's energy demand; therefore,
these types of resources will have a significant
share in the future global energy portfolio
(Ellabban et al., 2014). In the future, biomass can
be considered as the best option and has the
largest potential, which meets these
requirements and could insure fuel supply
(Demirbas et al., 2009). A number of renewable
energy technologies are available at different
stages of the development cycle. Hydropower
and bioenergy are the main sources of energy
worldwide. Other options are technically proven
and available on commercial terms, but still
occupy only a fraction of their potential markets
(International Energy Agency 2011; Doner,
2007; Wiuff et al., 2006).
Hydropower, wind, solar, and biomass energy
are even more expensive than fossil-based
power generation. However, due to steadily
declining reserves of fossils and rising energy
prices, it is increasingly worthwhile to switch to
renewable energy sources (Popp, 2013). The
renewable energy growth around the world
continues to be driven by a combination of
targeted public policy and advances in energy
technologies. The policy support for renewable
energy focuses primarily on power generation,
with support for renewable technologies lagging
in the heating and cooling as well as transport
sectors (REN21, 2018).
The utilization of renewable energy sources
has an increasing role in the EU's climate and
energy policy. By using more renewables to
meet its energy needs, the European Union
lowers its dependence on imported fossil fuels,
which makes its energy production more
sustainable. Influenced by economic and
environmental interests, the European Union
committed itself to increase the utilization of
renewable energy sources at the end of the
1990s. The Energy Policy White Paper issued by
the European Commission initiated a common
Renewable Energy Strategy and set up an Action
Plan in 1997. The indicative objective was 12%
share for the contribution by renewable sources
of energy to the European Union’s gross inland
energy consumption by 2010 (European
Commission, 1997). Recognizing the growing
dependence on imports, the European
Commission defined the objectives of energy
policy in the Green Paper in 2006. Three key
energy policy objectives were identified:
improved competitiveness, security of supply,
and protection of the environment (Commission
of the European Communities, 2006). The
Directive 2009/28/EC established an overall
policy for the production and promotion of
energy from renewable sources in the EU. The
directive set a binding target of 20% final energy
consumption from renewable sources by 2020 –
to be achieved through the attainment of
individual national targets. Each EU country
must have shown what actions they would
intend to take to meet their renewables targets
(including sectorial targets for electricity,
heating and cooling, and transport). The
countries must also ensure that at least 10% of
their transport fuels come from renewable
sources by 2020.
The European Council set even more
ambitious goals by increasing commitments by
2030. The aim was to promote the EU to achieve
a more competitive, secure and sustainable
energy system. The EU countries agreed on a
new renewable energy target of at least 27% of
EU’s final energy consumption and a 40% cut in
An evaluation of gross inland energy consumption of six Central European Countries Róbert Magda et al
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greenhouse gas emissions compared to 1990
levels.
A target for an improvement in energy
efficiency at EU level was set at a minimum of
27% by 2030. The European Commission aimed
to increase the proportion of renewables in
gross final energy consumption between 55%
and 75% by 2050. This, along with energy
efficiency, is considered critical in any model
that could be adopted (Hernández et al., 2017).
In comparison with traditional energy
production, renewable energy production is not
yet competitive under current market
conditions, due to the high technology
investment costs and environmental effects of
externalities not being adequately reflected in
market prices. Therefore, support is needed for
renewable energy production (Fodor, 2012). In
addition, the post-Soviet countries have been
highly dependent on fossil energy imports from
Russia. This dependency was determined by the
east-west orientation of its oil and gas
infrastructure (Jurcova, 2017). The development
of renewable energy is important from the
viewpoint of lowering the cost of imported
energy borne by Central European countries. In
addition, it would help to achieve the aims of
reducing CO2 emissions (Piwowar et al., 2017).
Many illusions are related to the widespread use
of renewable energy resources, however the low
emission of harmful byproducts is making them
attractive. This is true for the application of
biomass which is neutral to CO2 emissions in
regard to the whole production cycle (Szabo &
Kiss, 2014).
The EU policy on energy aims to ensure
security of energy supply in the member states,
to promote energy efficiency and energy saving,
as well as to increase the share of renewable
energy. Solidarity among the member states is
fundamental. However, each country is
responsible for its own energy security. The
spread of renewables may be impeded by the
availability of fossil resources within a country
(e.g. UK, Poland). The factors that provide the
framework for countries are as follows:
different international obligations, differences in
planning/licensing cultures, and public
awareness concerning renewables and/or
technical differences (Reiche & Bechberger,
2004).
RESEARCH METHODOLOGY
In this article, the gross inland energy
consumption of six Central European countries
was analyzed. The gross inland energy
consumption represents the quantity of energy
needed to satisfy inland consumption of the
geographical entity. In a narrow sense, it
represents the sum of primary energy
production and net import (import-export). In a
broad sense, it is supplemented with recovered
products, variations of stocks, bunkers and
direct use. The data for analysis were sourced
from the database of the European Commission
Eurostat and the International Renewable
Energy Agency (IRENA) for the period from 2010
to 2016. In the study, the comparative time
series analysis method was used. The purpose of
the article was to analyze the gross inland
energy consumption of the six Central European
countries and to examine the relationship
between renewable energy and non-renewable
energy sources. In the course of the analysis, the
aim was to determine which non-renewable
energy type was replaced by the renewables in
the six Central European countries. The
substitution of energy sources was analyzed
using correlation matrices and was evaluated at
0.05 significance. In addition, partial correlation
analysis under control variables to determine
whether the relationship calculated in the
correlation matrix exists or not were applied.
The evaluation was performed by using IBM
SPSS Statistics 20, GRETL 2018a, and MS-Office
Excel 2016.
RESULT AND DISCUSSION
Poland's energy consumption
For the period 2010 to 2016, Poland's annual
average primary energy production was 66
thousand Kilo Tonne Oil Equivalent (ktoe). Black
and brown coal were the main sources of energy
production, accounting for 80% of total primary
production. Poland was Europe's largest coal
producer with 75 million tons per year. In 2016,
Poland's import energy consumption was 50.1
thousand ktoe. The oil share of energy imports
was 64%, gas was 24% and coal 10%. In
international comparison, Poland’s 30% import
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energy dependency was low and Russia was its
largest supplier. Poland’s energy exports
amounted to 20 thousand ktoe in 2016. Similar
to domestic production, coal was also dominant
in exports with a 50% share. The country's gross
energy consumption decreased by 1.4% between
2010 and 2016 and amounted to 99 thousand
ktoe in 2016. Coal was dominant in the gross
inland energy consumption with a share of 49%,
27% came from oil, 15% from natural gas and 9%
from renewable energy (Figure 1).
Figure 1. Development of Poland's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
In addition, Poland's gross renewable energy
supply was 8.8 thousand ktoe in 2016. Biomass
accounted for 75% and wind energy for 12% of
the total. 14.7% of cooling and heating, 13.3% of
electricity and 3.9% of transportation were
generated from renewable sources.
Energy consumption of Czech Republic
As can be seen from Figure 2, in 2016, the
primary energy production of the Czech
Republic amounted to 26.8 thousand ktoe,
which was a 15% decrease from 2010. Coal was
the main source of energy production,
accounting for 60% of total primary production,
while nuclear was 23% and renewables 16%. In
2016, Czech Republic import energy
consumption was 20.3 ktoe. The oil share of
energy imports was 50%, gas was 33% and coal
15%. In international comparison, Czech
Republic’s 32% import energy dependency was
lower than the average of the European Union.
It imports coal mainly from Poland and oil and
natural gas from Russia. The Czech Republic
energy exports amounted to 5.8 thousand ktoe
in 2016. Similar to domestic production, coal
was also dominant in exports with a 55% share
and crude oil had a 38% share. The Czech
Republics’ gross energy consumption decreased
by 8% between 2010 and 2016 and amounted to
42.4 thousand ktoe in 2016. Coal represented
40% of the gross energy consumption, oil was
second with 19% share, gas had a 17% share,
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nuclear energy had a 14% share and renewable energy had a 10% share.
Figure 2. Development of Czech Republic's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
As also noticed from Table 2, the Czech
Republics’ gross renewable energy supply was
4.3 thousand ktoe in 2016, an increase of 38%
from 2010. Biomass accounted for 67% and
biogas for 14% of the total. 19.8% of cooling and
heating, 6.4% of transport and 3.6% of electricity
were generated from renewable sources.
Slovakia’s energy consumption
Between 2010 and 2016, Slovakia’s primary
energy production increased by 3.8% to reach 6
thousand ktoe. Nuclear power was the main
source of energy production, accounting for 64%
of the total usage, while renewables represented
only 27%. In 2016, Slovakia's import energy
consumption amounted to 13.8 ktoe. The oil
share of energy imports was 53%, gas was 26%
and coal was 20%. Import energy came primarily
from Russia (oil, natural gas) and from Czech
Republic (coal). The country’s 59% import
energy dependency was higher than the average
level of the European Union. Slovakia’s energy
export amounted to 4.3 thousand ktoe in 2016,
of which the oil share was 96% (mainly transit).
Gross energy consumption of Slovakia fell from
17.7 ktoe to 16.1 ktoe between 2010 and 2016.
Noticeable from these figures, Slovakia's gross
energy consumption was balanced. In 2016,
natural gas and nuclear energy were dominant
in the gross inland energy consumption with a
share of 24% each, 22% came from oil, 20% from
coal and 10% from renewable energy (Figure 3).
Slovakia’s gross renewable energy supply was
1.6 thousand ktoe in 2016. Biomass accounted
for 52%, hydropower for 24%, biogas for 10% and
biodiesel for 8% of the total. 22.5% of electricity,
9.9% of cooling and heating and 7.5% of
transport were generated from renewable
sources.
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Figure 3. Development of Slovakia's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
Hungary's energy consumption
Between 2010 and 2016, Hungary’s primary
energy production decreased slightly by 3.8% to
reach 11.2 thousand ktoe. Nuclear energy was
the main source of energy production,
accounting for 37% of the total primary
production in 2016. Renewables were the
second highest contributor with 28%, while coal
and natural gas had a 13% share and oil 9%.
Hungary’s import energy consumption was 17.8
thousand ktoe, which by far exceeded their
domestic production. The energy imports
showed a drastic movement during the seven
years. The oil and the natural gas were
dominant in the energy imports of Hungary,
with a 51% and 40% share. Hungary’s 55% import
energy dependency was average compared to
the European Union level. The Hungarian energy
export was 4.6 ktoe, with a 58% oil share in
2016. The country’s gross energy consumption
decreased by 5.7% between 2010 and 2016 and
amounted to 24.5 thousand ktoe in 2016. Gas
had a 33% share of the gross energy
consumption, oil had a 29% share, nuclear
energy 17%, renewables 12% and coal 9% (Figure
4).
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Figure 4. Development of Hungary's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
Hungary's gross renewable energy supply was
3.0 thousand ktoe in 2016. Biomass accounted
for 80%, biodiesel and geothermal for 4%, biogas
for 3%, municipal waste for 3%, biogas oil for 2%
and wind energy for 2%. 20.9% of cooling and
heating, 7.4% of transport and 7.2% of electricity
were generated from renewable sources.
Romania's energy consumption
Considering Figure 5, between 2010 and 2016,
Romania’s primary energy production decreased
by 10% to reach 25 thousand ktoe. Romania was
the largest oil and gas producer in Central and
Eastern Europe. Natural gas accounted for 31%
of the primary energy production in 2016,
renewables for 24%, coal for 17%, oil for 16% and
nuclear energy had a 12% share. Romania’s
import energy consumption was 13.1 ktoe in
2016, with an 80% oil share. Romania’s 22%
import energy dependency was significantly
lower than average compared to the European
Union level. Romania’s energy export was 5.4
thousand ktoe in 2016, with 98% crude oil share.
The country’s gross energy consumption
decreased by 10% between 2010 and 2016 and
amounted to 32.7 ktoe in 2016. Oil and natural
gas represented 28% each of the gross energy
consumption, renewable energy accounted for
18%, coal had a 17% share and nuclear energy
9%.
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Figure 5. Development of Romania's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
Romania’s gross renewable energy supply
increased by 5.6% between 2010 and 2016 to
reach 6.2 thousand ktoe in 2016. Biomass
accounted for 58%, hydropower for 25% and
wind energy for 9% of the total. 42.7% of
electricity, 26.9% of cooling and heating and
6.2% of transport were generated from
renewable sources.
Bulgaria’s energy consumption
Between 2010 and 2016, Bulgaria’s primary
energy production increased by 7% to reach 11.2
thousand ktoe. Coal was the main source of
energy production, accounting for 45% of the
total primary production. Nuclear energy was
the second highest contributor with 36%, while
renewables had a 17% share. The country's
import energy consumption was 12.1 thousand
ktoe, which is slightly above the primary
production. The oil share of energy imports was
72% and natural gas 21%. Bulgaria’s 38% energy
dependency was relatively low compared to the
average level of the European Union. Bulgaria’s
energy export amounted to 4.8 thousand ktoe in
2016, with a 97% crude oil share. Gross energy
consumption of Bulgaria reached 18.6 thousand
ktoe in 2016. The country’s gross energy
consumption was balanced. Coal was dominant
in the gross inland energy consumption with a
share of 31%, 23% came from oil, 22% from
nuclear energy, 14% from natural gas and 10%
from renewable energy (Figure 6).
Bulgaria’s gross renewable energy supply
increased by 34% between 2010 and 2016 to
reach 1.9 thousand ktoe in 2016. Biomass
accounted for 54%, hydropower for 17%,
biodiesel for 7%, wind energy for 6% and
photovoltaic energy (solar panels) for 6% of the
total. 30% of cooling and heating 19.2% of
electricity and 7.3% of transport were generated
from renewable sources.
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Figure 6. Development of Bulgaria's energy consumption (thousand ktoe)
Source: Compilation based on Eurostat database (2018)
Evaluation of relationship between nonrenewable
energy and renewables
For the European Union as a whole, the
analysis of the relationship between renewables
and non-renewable energy sources showed the
following results. The values of the correlation
matrix (Table 1) showed that the growth of
renewable energy was due to the decrease of
nuclear energy (-0.9635), coal (-0.7692) and oil
(-0.7733). Natural gas proved to be nonsignificant
at the 5% level (95% confidence
interval). The partial correlation calculation
based on control variables showed that the
relation between renewables and coal, as well
as renewables and oil cannot be detected.
However, the relation between renewables and
nuclear energy can be detected. It can be stated
that in the European Union the renewables have
replaced mainly the nuclear energy.
In the case of Poland, renewable energy was in
negative correlation with coal (-0.8547) and in
positive correlation with natural gas (+0.7826).
Oil also proved to be non-significant at the 5%
level. Poland didn’t consume nuclear energy.
The partial correlation calculation showed that
the negative correlation decreased between the
renewables and coal when natural gas was the
control variable. Therefore, the natural gas
consumption affects the renewables-coal
relation. However, to what extent renewables
replace coal cannot be detected. Based on the
analysis, it can be concluded that both natural
gas and renewables replaced coal in Poland.
In the case of the Czech Republic, the situation
is clear regarding the relation between
renewables and non-renewable energy sources.
Only the renewables-coal relation was relevant.
The other three non-renewable energy types
also proved to be non-significant. It was
confirmed by the partial correlation test, in the
case where oil, natural gas and nuclear energy
were the control variables. In the Czech
Republic, renewables replaced coal. In the case
of Slovakia, the renewables were in negative
correlation with coal (-0.8659) and with natural
gas (-0.7719), which was proved only for coal by
partial correlation calculation (but only
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partially). In Slovakia, renewables replaced
mainly coal during the examined period.
Hungary was the only country among the
four, where the renewables did not show
significant correlation with any non-renewable
resource. The highest correlation value (-
0.5800) was for coal, however the replacement
of renewables for coal was not proven. In the
case of Hungary, none of the non-renewable
energy types could be detected to have been
replaced by the renewables. In the case of
Romania, the renewables were in negative
correlation with coal (-0.8486) and with natural
gas (-0.8128). However, it was not proven by
partial correlation calculation. In the case of this
country, it could not be detected which nonrenewable
energy types were replaced by the
renewables, but certainly not by the crude oil. In
the case of Bulgaria, renewables showed
significant linear correlation with coal (-0.8089).
It was confirmed by the partial correlation test
for the three control variables (oil, natural gas
and nuclear energy). In Bulgaria, renewables
basically replaced coal.
Table 1. Correlation matrix of replacement of non-renewable energies for renewables
Energy
carrier
Poland
Czech
Republic
Slovakia Hungary Romania Bulgaria EU-28
Coal -0,8547 -0,9467 -0,8659 -0,5800 -0,8486 -0,8089 -0,7692
Oil -0,3778 -0,6256 -0,3999 -0,2838 0,0006 0,5292 -0,7733
Natural gas +0,7826 -0,7115 -0,7719 -0,5163 -0,8128 0,2779 -0,7442
Nuclear
energy
- -0,2352 -0,2670 -0,2221 -0,3240 -0,3427 -0,9635
Source: Calculation from Eurostat database (2018)
The gray colors show the correlation values that can be considered. The tones indicate the strength
of relationship.
Concerning the results, it should be noted that
the non-renewable energy sources were clearly
separated, but the renewables were examined
as a whole. Regarding the composition, the
renewables can differ significantly by country.
Biomass was the dominant renewable energy
type in each country. However, some member
states had other renewable sources with higher
rates than the EU average (e.g. wind in Poland,
biogas in the Czech Republic, or hydropower in
Slovakia, Romania and Bulgaria).
CONCLUSION
The paper provides a comprehensive view on
the energy situation of six Central European
countries with special emphasis on the
renewables. There is a very clear picture of high
import energy dependency of these countries.
The research presents original results of the
relationship between renewable energy and
non-renewable energy sources, as well as draws
proper conclusions for practice.
The structure of energy production in the six
Central European countries were different due
to the differences of natural endowments.
However, the results showed that renewables
mainly replaced coal. The six countries were
highly dependent on oil and natural gas. The
main goal is to reduce the consumption of fossil
energy and to replace them by renewables in
the future. Reduction of oil consumption could
be achieved by increasing consumption of
biofuels and by using more electric or hybrid
power devices. Natural gas used for heating can
be replaced by biomass, solar, or geothermal
energy. Coal, which is mainly responsible for
environmental damage, can be replaced by
biomass. In the case of electric power
generation, coal can be replaced by hydropower,
wind or solar energy. In addition to increasing
the share of renewable energy, the EU also
places emphasis on improvement of energy
efficiency and/or savings. During the examined
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period, the decrease of energy consumption was
affected not only by the negative impact of the
2008 crisis, but also by the spread of efficient
consumers, for example, more energy-efficient
motors, passive houses, modernization of light
technics and so forth. Future studies may
include more countries and a benchmark study
based on the top performing countries
regarding the use of renewable energy.
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ABOUT THE AUTHORS
Natanya Meyer, email: natanya.eyer@nwu.ac.za
Dr. habil. Róbert Magda is an associate
professor, at Szent István University, Faculty
of Economics and Social Sciences, Institute
of Economics, Law and Methodology and an
extraordinary associate professor at School
of Management Sciences Faculty of
Economic and Management Sciences, NorthWest
University, South Africa. He has a PhD
in Economic Science and a Habilitated
Doctorate in Management and Business
Administration. During his research
activities he has gained insight into several
fields of research, which include but are not
limited to the following: the examination of
land as a natural and economic resource;
the economic potentials of rural areas;
limited resources and sustainability.
Dr. Norbert Bozsik is a college professor at
Eszterházy Károly University, Faculty of
Economics and Social Sciences, Department
of Management. He has a Phd Management
and Business Administration from Szent
István University. During his research
activities he focused on several fields of
research, which are the following: analysis
of the European food trade, analysis of
energy consumption of Visegrad countries,
efficiency of agricultural production, labour
productivity in the Hungarian food industry.
In these research areas he published a series
of publications with his colleagues and
students, both in domestic and international
periodicals, journals and books.
Dr. Natanya Meyer is a senior lecturer at North
West University (South Africa) in the Faculty
of Economic and Management Sciences. She
completed her B. Com and Honours degree
in Economics and Risk Management and
thereafter her Master’s degree in
Development and Management and PhD in
Entrepreneurship. Her research focuses on
entrepreneurial and economic related topics
with a focus on females, youth and the
enabling environment. She is a reviewer,
editorial board and scientific committee
member for several national and
international journals and has collaboration
links with various Asian and east European
universities.