This quarter our core assumptions for Romania's power sector remain in place. We continueto expect electricity generation to remain relatively flat - registering annual average growth of 0.33%between 2017 and 2026. Coal will remain the biggest component of the power mix, but gas will gain shareas coal capacity is taken offline to comply with tightening EU emissions targets and Romania boostsdomestic gas production from the Black Sea towards the end of our forecast period. As for the previousquarters, we have not included the planned new reactors at Cernavoda in our forecasts for the Romanianpower sector as uncertainties over the timeframe remain in place.
Latest Updates And Structural Trends
After less than six months in office, PSD Premier Sorin Grindeanu and his cabinet were ousted byparliament on June 21 in a no confidence vote, the second this year. The fresh political crisis in Romaniawill exacerbate the ruling capacity of the leftist Social Democratic Party (PSD) and centre-right Allianceof Liberals and Democrats (ALDE) coalition, while damaging its already weak credibility. While ourCountry Risk team believes a snap election remains unlikely at this stage, this raises questions over thecoalition's ability to govern successfully in the coming three years. Overall, renewed instabilityunderscores the weak relative score of Romania in BMI's Short-Term Political Risk Index.