Russia: Energy Resources
|Energy Consumption||30.43 Quadrillion Btu|
|2-letter ISO code||RU|
|3-letter ISO code||RUS|
|Numeric ISO code||643|
|UN Region||Eastern Europe|
|Energy Maps||1 view|
|Energy Organizations||0 view|
|Research Institutions||0 view|
|CIA World Factbook, Appendix D|
|Wind Potential||1,152,810||Area(km²) Class 3-7 Wind at 50m||4||1990||NREL|
|Coal Reserves||173,073.91||Million Short Tons||2||2008||EIA|
|Natural Gas Reserves||47,570,000,000,000||Cubic Meters (cu m)||1||2010||CIA World Factbook|
|Oil Reserves||74,200,000,000||Barrels (bbl)||8||2010||CIA World Factbook|
Policy and Regulatory Overview 
With some 10 million people not connected to the electricity grid, Russia also has huge potential markets for off-grid electricity systems based on renewable energy. In many isolated settlements, renewables can be the most economic, and perhaps even the only way to provide electricity and heat to consumers.
With the general improvement in political outlook, several major renewable energy projects were announced in Russia in recent months. In June, Russia's energy company RusHydro and Italy's Enel have signed a memorandum on hydro-energy cooperation.German industrial conglomerate Siemens signed a partnership agreement with two Russian companies, Rostechnologii and RusHydro, planning to develop 1,250 MW of wind capacity by 2015. The German engineering giant said it would build wind farms across Russia and set up 3 joint ventures to manufacture products for them locally. Siemens's investment announcement came on the heels of the news that Russian oil and gas major Lukoil and Italian ERG Renew have signed a letter of intent to cooperate on renewables development in Russia and eastern European countries.Adolf Chernyavsky, the chief specialist of the Rostovteploelektroproekt engineering company, told news agency RIA Novosti, that his company intends to inject USD 200 million in a 100 MW wind power project near the southern city of Yeisk, close to the Azov Sea as well as a 13 MW solar plant, the first of its kind in the country. Chernyavsky said that the construction on the project, to be located in Kislovodsk, may begin in 2011.According to the Russian Ministry of Energy, the establishment of the state Energy Services Company Federal Service Company (OAO FESCO) and regional (municipal) public-private Energy Service Companies (RESCO) is planned. It is envisaged to create a network of such companies in the regions to cover with their activities all the territory of the Russian Federation. These federal and regional ESCOs will however only serve state-owned enterprises and municipal buildings.
In May 2011, Russian President Dmitry Medvedev announced a set of ecological directives, including measures to enforce mandatory purchase of energy generated from renewable sources. Medvedev also proposed the establishment of a single federal authority in charge of coordinating ecological supervision in the country to ease bureaucratic burden of project development.The government was instructed to develop a comprehensive legislative package and present it for consideration by the Russian parliament, the State Duma, before December 1, 2010.The Market Council is now elaborating a scheme for green certificate trading. Such certificates are allocated to ‘green’ power producers and can be traded within the wholesale market under the auspices of the Market Council. Small renewable energy generators cannot influence the quasi-regulation by the Market Council in the field because minimal capacity restrictions.
Total installed electricity capacity (2008): 228.7 GWElectric power generation (2008): 1,036 TWhRussia has the world’s largest natural gas reserves, the second largest coal reserves and seventh largest oil reserves. It is the largest exporter of natural gas and since 2009 has periodically overtaken Saudi Arabia as the world’s largest oil producer. It currently supplies around 30% of the oil and 25% of the gas that the EU consumes, and is also a significant global force in the nuclear power industry.Russia is, after the US, China and Japan, the world’s fourth largest electricity producer. The total electricity generation increased by 2% per annum in 1999–2009, reaching 1040 TWh in 2008. Russia is a net exporter of electric energy, but unlike in other energy commodities, electricity exports are not at all important for the system as a whole. The export volumes are tiny in relation to the total generation volumes. In 2008–2009, net exports were 17 TWh, constituting a meagre 1.5% of the total generation.Thermal generation accounts for a very high proportion of total electricity generation in Russia. Over 60% of electricity is generated in thermal power plants, with hydro-electric and nuclear power making up the rest.The breakdown of electricity generation capacity between thermal, hydro and nuclear is close to the EU average, with a slightly smaller role for nuclear in Russia. The fuel mix in thermal generation is, however, different. In Russia, two thirds of the thermal power plants are gas-fired with the share of hard coal being less than one-third. Therefore, about 40% of the total electricity generation relies on natural gas, which makes the availability and domestic pricing of gas critically important for the power sector.Total primary energy supply (TPES) in 2009 was 646,915 ktoe. TPES share was (share of TPES excludes electricity trade):Natural Gas: 54%Coal/peat: 14.7%Nuclear: 6.6%Hydro: 2.3%Biofuel and waste: 1.0%Geothermal/solar/wind: 0.1%Oil: 21.3%
The FTS is responsible for setting tariffs (tariff limits) and settling disputes concerning regulated services. The FTS is also empowered to impose penalties for violation of law on natural monopolies concerning tariff and price regulation.
In 2006 a wholesale market (power exchange) was established. The share of electricity that is sold at non-regulated prices is increasing gradually, from 5% of the forecast balance prepared by the FTS for 1 January 2007 to full liberalisation of the wholesale electricity (capacity) market in 2011. By that date, all market participants, excluding the household sector, will be eligible and 100% volumes of electricity will be traded at free prices. As of 1 January 2010, 60% of the non-household market has been liberalised.In the interim phase, the rest of traded electricity is exchanged and paid for at regulated prices pursuant to regulated bilateral contracts (on a take-or-pay principle).With the changing governance from a vertically integrated structure to a competitive horizontal structure, the Russian electricity sector is on the path to a liberalized model, even if full realization of this model will take time.
The Russian Federation could save up to 45% of its total primary energy consumption as calculated for 2005. The Russian Federation’s current energy inefficiency is equal to the annual primary energy consumption of France. The World Bank’s study points out that achieving the Russian Federation’s full energy efficiency potential would cost a total of USD 320 billion to the economy and result in annual costs savings to investors and end users of about USD 80 billion (if considering 2007 internal prices), paying back in just four years.IndustryEnergy surveys, audits and passports.Fiscal incentives for EE investments.UtilitiesPromotion of ESCOs.TransportTransport Strategy of the Russian Federation: EE regulations.ResidentialMandatory EE requirements for buildings and EE classification. “Federal and Regional Building and Heat Efficiency (thermal performance) codes”.Mandatory EE labelling for equipment and appliances (from 2011-12) based on European EE standards.Phase-out of inefficient light bulbs by 2012 (gradually from 2011).Individual energy meters for every household (from 2011-12).PublicFederal Code of Practice: a technical manual to guide architects, builders and contractors in terms of EE. The Code aims to improve EE (design and construction) of existing building codes, as well as thermal efficiency. Residential buildings are also covered by the Code.EE requirements in public procurement.Obligation for budgetary institutions to reduce energy consumption by 15% within 5 years based on 2009 figures.State information system on EE.
The increasingly poor condition of the infrastructure has been reflected in increasing losses. Transmission and distribution losses were 8% of electricity generation in 1990 and 12% in 2002 (IEA, 2005), whereas in 2008 the share had further increased to 13%. These levels correspond to the average levels in most CIS countries, but they are still much lower than in some other large developing countries like Brazil, Mexico and India. The losses in lower-level distribution networks are typically much higher than average. In some regions, notably in North Caucasus, losses due to poor infrastructure, neglect or outright theft have amounted to over 30%.
There are several energy efficiency centres operating under different external supporting programmes in the Russian Federation. Some of the largest are: Centre for Energy Efficiency (CENEF), Centre for Energy Policy, AcademEnergoServis, Institute for Energy Policy, RusDem, ESCO Negawatt, Rus Esco, 3E, Energo Servis and regional centres for energy efficiency, such as the ones located in Kaliningrad, Murmansk, Kola, Karelia, and Ekaterinburg.Russian Energy Agency The Federal Law No. 261 of the Russian Federation defined the power and the competences of a state agency dedicated to Energy Efficiency and Energy Savings. Subsequently, the Russian Energy Agency was established in 2009. The priority task of the agency is to promote energy efficiency and conservation, monitor the energy savings policy at the federal and regional level and provide information on Russian Fuel-and-Energy-Complex developments. Also, the Agency establishes EE criteria and indicators.
ElectricityThe monopoly RAO Unified Energy System (UES) (established in 1992 pursuant to Decrees of the President) was restructured and unbundled, with 20 of the resulting companies being privatised in 2008. The reforms created six wholesale thermal power-generating companies (OGKs – which remain separate from hydro and nuclear assets) and 14 territorial generating companies (TGKs – which provide district heating as well as power). Foreign investors include E.ON and RWE of Germany (in OGK 4 and TGK 2, respectively), ENEL of Italy (in OGK 5) and Fortum of Finland (in TGK 10, plus a minority share in TGK 1). The (60%) state-owned RusHydro JSC manages the vast majority of the Russian hydro power plants.The operation of the country's transmission grid Unified National System (UNS), remains under state control through the Federal Grid Company, which is the transmission system operator (TSO).Petroleum and GasIn Russia, one state-controlled company, OAO Gazprom, dominates the gas sector, accounting for over 60% of Russian reserves (almost 30 tcm according to IEA 2008) and almost 85% of Russian production, amounting in 2007 to about 548.6 billion cubic meters. This means that Gazprom is by far the largest gas producing company in the world. Oil companies and independent gas producers each account for another 20% of the Russian gas reserves and produce the balance of the total production. Gazprom owns the Russian gas transit and transmission system. Gazprom is also the largely dominant end-user supplier, controlling the vast majority of the regional distribution companies.The year 2006 marked a change in the legal status of Gazprom Export – the company’s export subsidiary – in relation to exports. Before 2006, Gazprom enjoyed a de facto monopoly position over gas exports, but not a legal one. Starting from mid 1990s, the monopoly of Gazprom was challenged: first, independent companies such as Itera began to export gas to CIS countries; then, about a decade later, Eural Trans Gas started exports to Europe. Partly in response to these developments, and mainly as a consequence of the January 2006 Ukrainian gas transit/supply crisis, the 2006 Law “On Gas Exports” gave Gazprom a legal monopoly.
Degree of independence
The Head of the FTS, who may have up to 5 deputies, is appointed (and may be dismissed) by the government. Appointment is for an undefined term of service. The FTS is financed from a special chapter of the federal budget.Resolution of the RF Government No. 995 of 26 July 2004, “On tariff setting decisions and powers the FTS”, provides the FTS with a Management Board, comprised of 12 members and drawn from FTS executives and officials from various ministries, with the FTS Head serving as the chairman of the board.
Economic Commission for Europe. 2010. Policy Reforms for Energy Efficiency Investments. http://www.thegef.org/gef/sites/thegef.org/files/documents/document/10-18-2010%20Council%20document.pdfBoute, Anatole. 2011. A comparative analysis of the European and Russian support schemes for renewable energy: return on European experience for Russia
Energy Strategy of the Russian Federation for the period up to 2030The main policy document in the energy sector is the Energy Strategy of the Russian Federation for the period up to 2030, which was approved in November 2009 by the Government and replaced the previous Energy Strategy of the Russian Federation for the period up to 2020.The Energy Strategy up to 2020 outlined several main priorities: an increase in energy efficiency, reducing impact on the environment, sustainable development, energy development, and technological development, as well as improved effectiveness and competitiveness. The main targets set by the Energy Strategy up to 2020 can be summarized as follows:Reduction of the specific energy intensity of GDP with the correspondent growth of energy effectiveness of economy;Moderate growth of expenses for fuel and energy supply of the population in 2001-2020;Increase of the annual income from the fuel and energy complex activity;Expected growth of energy exports of 45-64 per cent by 2020.The strategy outlines three phases for the process of the national Fuel Energy Complex (FEC) transformation. In order to make the FEC an additional engine for the recovery of the domestic economy, it is foreseen to reorganize it during the first stage (2013 to 2015). In the second phase (2016 to 2020/2022), several cutting-edge, highly efficient innovations and technologies are to be introduced; greenfields are to become operational and significantly expand the sector’s production and export capacity. In the period of 2021/2023 to 2030, considerably improved energy efficiency coupled with enhanced use of non-fuel energy sources (nuclear, solar, wind, etc.) are expected to boost the economy.The overall goals of the strategy can be summarized as follows: energy security, energy efficiency of the domestic economy, economic efficiency of the national Fuel Energy Complex and ecological security of the national fuel energy complex.The legal framework for energy efficiency is based on the Law on Energy Saving and on Increasing Energy Efficiency and on Introduction of Changes in Selected Legislative Acts of the Russian Federation (Federal Law No. 261, signed by the President on 23 November 2009) and on various Codes and Federal Laws, such as the Civil Code, the Tax Code, the Forestry Code, the Customs Code, the Urban Development Code and the Laws on Electricity Sector and on Municipal Housing Sector.The new law replaces the previous Law on Energy Efficiency (Federal Law No. 28), which was in force since 1996 and which was distinguished by its declarative nature and absence of real measures allowing real development of energy saving technologies in the Russian Federation. Furthermore, it provides the regulatory framework for implementation of the decree of the President of the Russian Federation “On Measures to Increase the Energy and Environmental Efficiency of the Russian Economy”, which was adopted in 2008, thus marking the first step in a comprehensive revision of the regulation on EE of the Russian Federation The presidential decree envisages energy intensity target reduction of 40% by 2020.There is no specific law on RES. However, the Federal Law No. 35 “On the Electric Power Industry” as amended by Federal Law No. 250 “On Amendments of Legislative Acts of the Russian Federation”, related to reformation of the United Energy System of Russia (ratified on November 2007), contains a number of measures to support generation of electricity from RES. First of all, it constitutes the set of energy sources considered as renewables.Furthermore, the law obliges the government to adopt long-term state policies in the area of RES by fixing the share of RES in production and consumption by periods and years. The law envisages federal budget subsidies, including coverage for grid connection costs for RES producers with a capacity below 25 MW. It obliges grid companies to purchase preferentially renewable energy for the compensation of their transmission losses. Also, the law introduced a premium to the wholesale market price for RE.In 2009, a Government Decree set a new target for RE, to reach 4.5% by 2020 from its current 0.5%. A modest but positively oriented target demonstrates growing attention towards renewable energy.White Sea EnergySome of the Russian Federation regions have established or are establishing regional EE programmes. One example of such a regional initiative is the territorial project of the region of Archangelsk, called White Sea Energy. Jointly with the Russian energy company Roskommunenergo, the administration of the Archangelsk region established a public-private partnership programme. The participating financing institutions are the Russian banks Mosuralbank and Sberbank, as well as the Czech Export Bank and the Foreign Trade Bank of the Russian Federation. The aim of the project is the comprehensive optimization and development of the power supply of the regional enterprises and the housing sector. Furthermore, it is envisaged to implement efficient, high-tech and ecological projects in the electricity, industry, and municipal services sector in the Archangelsk region. The third project task comprises the improved competitiveness of the enterprises in Archangelsk through the optimization of the energy costs. The programme envisages investments of USD 1 billion.Russia Renewable Energy Program (RREP)Supported by the Global Environment Facility (GEF) and the International Finance Corporation (IFC), RREP was launched in December 2010 to create a platform that can support at least the beginnings of a significant share for renewables in Russia. Its work will see the programme team co-operating with the Russian Energy Agency, RusHydro and other key players to develop favourable policies and instruments. It will work with the private sector to encourage project development and generally raise the profile of renewables, especially in regions where it could have a significant early impact. RREP hopes to be the catalyst for the addition 205 MW of RE over the five years of the programme. The IFC says it will have around USD 150 million to invest when the time is right.Premium and certificates schemeRussian authorities have realized that the national renewable energy objectives cannot be achieved without additional financial support. To enable the financial viability of RE installations, they have created a support scheme. The central element of this scheme consists of a system of ‘certificates’ and ‘premiums’ that provide additional revenues to the operators of renewable energy installations. Moreover, the authorities have established a scheme for the compensation of the network connection costs of renewable energy installations with an installed capacity not exceeding 25MW. In addition, the Federal Grid Company is obliged to cover the electricity losses on the transmission grid in priority with purchases at regulated prices of electricity produced from renewable energy sources. Furthermore, renewable energy installations in Russia could, at least until 2012, benefit from support under the Joint Implementation (JI) mechanism of the Kyoto Protocol. The national authorities have developed the required domestic legal framework for the approval of such projects and the issuance of Emission Reduction Units (ERUs).Renewable energy installations that are connected to and inject electricity in the network of EU Member States (ie the network supervised by the European Network of Transmission System Operators for Electricity (ENTSO-E)) could also benefit from support under the so-called ‘joint projects’ mechanism created by the new Directive of the European Parliament and of the Council on the Promotion of the Use of Energy from RES.
Russian energy imports consist of fossil fuels and represent only 3.3% of the total energy supply.
Role of the government
The Federal Council and the Duma (respectively their appointed energy committees for these matters).The Government of Russia has appointed two energy commissions, i.e. the Commission on Fuel and Energy Complex is located at the Prime Minister’s Office and is engaged in legal aspects, institutional structures and approves and monitors the National Programme, while the Commission on Modernization and Technological Development of the Russian Economy, which is located at the President’s Office, is engaged in choosing and funding the most innovative projects in energy efficiency and renewable energy that can be implemented within the Russian Federation.Ministry of Energy (ME) The ME is responsible for the development of a modern legal and regulatory framework and the creation of adequate institutional structures. It prepares the annual Progress Report to the Government of the Russian Federation on energy saving and energy efficiency improvement, and provides informational and educational support of activities at international, federal, regional, and municipal levels. It also provides support regarding the creation of a favourable investment climate for attracting business and interacts with the business community and financial institutions on the basis of public-private partnerships.Ministry of Economic Development (MED) deals with general energy regulation issues in the framework of economic planning and development.Ministry of Natural Resources of the Russian Federation performs the functions related to state policy in the sphere of study, renewal, and conservation of natural resources, including the state subsoil stock and forestry, water resources, forests, as well as in the sphere of environmental conservation.
Federal Law No. 35 on Electrical Energy (2003)Federal Law No 36 on Functioning of Electrical Energy (2003)Governmental regulation No 861 on Regulation Access (2004)Governmental regulation No 307 on provision of Communal Services (2006)Federal Law No. 250 on the Introduction of Amendments to Certain Legislative Acts of the Russian Federation in connection to the Accomplishment of Measures for the Reforming of the Unified Energy System of Russia (2007) Classification of renewable energy sources Basic measures of state support of renewable energy sources development Powers of state authorities related to mechanisms of renewable energy sources state supportRF Government Decree No 426 on Qualifying a RES-E Generating Facility (2008)Federal Law No. 261 on Energy Saving and on Increasing Energy Efficiency and on Introduction of Changes in Selected Legislative Acts of the Russian Federation (approved on November 2009). The Law introduces the following provisions: Energy Efficiency rules for the circulation of goods, Energy Efficiency regulation in the construction industry and the housing and utilities sector, Energy Audits, Significant tax incentives to support energy-saving technologies, Energy Saving Programmes, Energy Efficiency and Government Procurement orders, Support of Energy-Saving Technologies, Information support for the Energy-Saving System, Administrative Liability. Decree of the Government of the Russian Federation No 843 on Measures for the Implementation of art 6 of the Kyoto Protocol to the UNFCCC (October 2009)Art 21, Federal Law on the Electric Power Industry. The rules for the compensation of connection costs have been established in Decree of the Government of the Russian Federation No 850 on the Approval of Criteria for the Provision of Subsidies from the Federal Budget to Compensate for the Costs of Technical Connection of Generating Installations with an Installed Capacity not Exceeding 25MW and that have been Qualified as Installations that Function on the Basis of Renewable Energy Sources (October 2010)
So far in Russia, there was a lack of a clear policy framework for the support of EE and RES as well as a lack of clear responsibilities for policy implementation and monitoring of progress and this clearly constituted a significant legal and institutional barrier. However, the new Law on Energy Saving and on Increasing Energy Efficiency, approved at the end of 2009, sets ambitious goals to reverse this situation, by the set up of federal, regional and local EE authorities and by the definition of clear deadlines for implementation of the comprehensive mandatory provisions. However, the effective implementation of the new Law is highly dependent of the relative bylaws and implementation decrees which still need to be approved. But even if the legal framework set by the new Law is implemented in the ambitious timeframes mentioned in the Law, it will take long time before the beneficial effects at the institutional and administrative level can become tangible – this relates especially to the setup of new authorities and to the development of consumption databases and particularly in those regions of the Federations which so far had not developed any programmes or initiatives in the area of energy efficiency.
The Federal Tariff Service (FTS) is a federal executive body which regulates tariffs of natural monopolies, and in particular tariffs in the electricity, oil and gas sectors. The FTS reports directly to the government. It was established in its current form in 2004, replacing the former Federal Energy Commission.The FTS does not have regional offices, however there are regulatory governmental agencies (Regional Energy Commissions or RECs) that operate on a regional level and apply rules and methodology guidelines issued by FTS.http://www.fstrf.ru/eng
The size of the territory of the Russian Federation holds a strong potential for the development of renewable energy sources, although it should be noted that the utilization of intermittent resources like wind energy, which requires long transmission lines if the plants are located in remote locations, might pose some economical and technical challenges.HydroThe potential for hydropower is also quite large, as 9% of the world’s hydro resources are concentrated on the territory of the Russian Federation. Hydropower currently provides 21% of total electricity generation capacity and there is still a large potential for small to medium hydro power projects.WindThe Russian Federation has excellent potential for wind power generation. An attempt to utilize just 25% of its total potential would yield some 175,000 MW of power. The highest wind energy potential is concentrated along seacoasts, in the vast territories of the steppes, and in the mountains.BiomassThe overall technical potential of biomass is estimated at 35 million toe, which, if converted to electrical power, could generate nearly 15,000 MWe. This includes sewage sludge, cattle manure and forestry and wood waste.GeothermalGeothermal potential is also high, with theoretical resource estimates of high temperature (>90 C) steam, water, and brine at about 3,000 MWth. The most promising geothermal locations have been identified in the North Caucasus, Western Siberia, Lake Baikal, and in Kamchatka and the Kuril Islands.SolarSolar potential is reasonable despite the country’s location in the northern latitudes. The highest solar potentials are located in the North Caucasus, the Black Sea and the Caspian Sea areas, and southern parts of Siberia and the Far East. It has been estimated that the technical potential and the economic potential for solar energy are 2.3 trillion tce, 2 300 million tce and 12.5 million tce, respectively.An estimate of the economic potential of primary RES from the PEEREA Report on Russian Federation in 2007 gives an overall figure of 181 Mtoe/year. This would represent around 20 per cent of the domestic energy consumption, much higher than the current 1%.
- Russian-UNEP Green Economy Advisory Services
- Russia-Making Energy Efficiency Real (MEER)
- Russia-Joint Programme on Resource Efficient and Cleaner Production (RECP) in Developing and Transition Countries
- Development of the Electricity Carbon Emission Factors for Russia
- Survey of Biomass Resource Assessments and Assessment Capabilities in APEC Economies
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- Ecofys-Country Fact Sheets
- UNFCCC-Global Map-Annex 1
- OECD Input-Output Tables
- Carbon Dioxide Information Analysis Center (CDIAC)-Fossil Fuel CO2 Emissions
- Energy Indicators for Sustainable Development: Guidelines and Methodologies
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