In recent years, the Russian state and businesses have been supportive for the national renewable energy development, however, the future of the industry is not yet clear as indicated in Proskuryakova and Ermolenko’s paper.
The goal was to foresee the future for the renewable energy sector in Russia, and to provide a scientific ground for government and decision-makers. To make predictions, they interviewed experts, analysed national policies and took more steps to draw a picture of the future trends. They projected four major scenarios that may happen until 2035:
- New technology paradigm (3D)
- Centralized diversification
- Relying on hydrocarbon exports
- The worst scenario comes true
Among them, the ‘New technology paradigm (3D)‘ scenario seems to be the most promising one for Russia. It moves towards green growth and implies actively developing the renewable energy sector with a significant reduction of power and heat generation costs. Projected decentralisation and de-monopolisation of renewable energy sources will become economically viable for Russian private companies. This path promises energy security through the diversification of energy resources, fossil fuel savings, and the creation of a new, high-tech green energy sector.
The ‘Centralized diversification‘ scenario is also promising for the sector development. Although, unlike the ‘New energy paradigm (3D)‘ option, the industry would remain highly monopolized, with the state playing a lead role in the renewable energy sector’s development. This scenario does not imply advanced management models for the industry and increased competitiveness, so, in the long term, it is unlikely to yield sustainable outcomes.
‘Relying on hydrocarbon exports‘ scenario features increased competition on global energy markets, and geopolitical rivalry over the production and transportation of energy resources. The main source of national income (that provides close to half of federal budget) will be the export of raw materials, predominantly oil and gas. This exaggerates risks like terrorism, local conflicts, the risks of the Russian energy industry lagging behind others. This scenario implies Russian producers to find ways to integrate themselves into the international value chains in the energy sector.
The least favourable scenario ‘The worst scenario comes true’ features a long-term decline of oil price, weakened oil production and increased competition on the global markets. According to this scenario, if the current oil and gas industry remains unchanged, in 20 years’ time oil production in Russia may drop by 46%. This scenario will prevent the industry from advancing to a new technological level, and Russian energy market will lag far behind global ones. It would also deteriorate sustainability to anthropogenic disasters, retaining the technological and financial stability of energy companies, and improving their quality. Following this development path could lead to a further downturn of the national economy. It would significantly limit the scope for the Russian energy industry’s development until 2030, making its modernization or securing new niches on the global market impossible.
Fig. 1. Forecasted total primary energy demand: 2030 (%). Note: BP: data for 2035; Greenpeace: prospective energy revolution scenario (Advanced energy [r]evolution scenario); IHS: Vertigo scenario.
Original source: Proskuryakova, L. N., & Ermolenko, G. V. (2019). The future of Russia’s renewable energy sector: Trends, scenarios and policies. Renewable Energy, 143, 1670-1686.
Front photo: Shemetov/Reuters