1. «EU-Russia cooperation: Energy and Climate Changes»
Energy Strategy of Russia for the Year 2030: Approaches, Priorities and Reference Points
Alexey Gromov
PhD in Economic Geography
Deputy General Director
Institute for Energy Strategy
«EU-Russia cooperation: Energy and Climate Changes»
October, 23, 2009
Moscow

2. Energy Strategy 2030 in the System of Documents of the Strategic Development
Long-term forecast of the development of Russian economy for the years
Conception of the long-term development of the Russian Federation for the year 2020
ES-2030
General scheme of development of the gas industry for the year 2030
General scheme of allocation of power generating facilities for the year 2020
General scheme of development of the oil industry for the year 2030
State program of energy saving
Eastern
Gas
Program
Conception of the state program for exploration and exploitation of the continental shelf of the Russian Federation
Program of long-term development of the fuel and energy complex of the Russian Far East
Strategy of development of the power generation in the Russian Far East
Investment programs of energy companies 2

3. Innovative and efficient energy development
Aim and Goals of the ES-2030
Innovative and efficient energy development
Aim
Stable institutional environment in the energy sector
Modernization and construction of new energy infrastructure
Goals
Energy and ecological efficiency of the national economy
and energy sector
Efficiency of reproduction, extraction and processing
of energy resources
Further integration of the Russian energy sector into the
global energy system
Aim of the ES-2030 remains stable despite consequences of the global economic crisis 3

4. Forecasted Change of the Fuel and Energy Complex’s Role in the Russian economy
2030
2005
Energy sector in GDP
Energy sector’s export in GDP
Energy resources in export
Investment in energy sector in total investment 4

5. Expected Dynamics of Specific Energy Intensity of GDP and Domestic Demand for Primary Energy Resources 5

6. Key priorities in the Russian energy sector
Energy Efficiency
Economic Efficiency
Energy Security
Ecological Security 6

7. Energy security Strategic indicators 7 First stage Second stage
Third stage
Growth of energy consumption per capita, % by the level of 2005
no less than 10%
no less than 20%
no less than 40%
Growth of electricity consumption per capita, % by the level of 2005
no less than 13%
no less than 43%
no less than 85%
Growth of petrol consumption per capita, % by the level of 2005
no less than 23%
no less than 41%
no less than 70%
Decrease of the current level of equipment’s run-out (in 2005 – 60%):
by 10%
by 5%
Elimination of deficit and maintenance of the sufficient reserve of the power and heat generating capacities
Maintenance of power generating reserves at the level of 17% of the total installed capacity of the United Energy Systems (UES) of Russia. Maintenance of normative heat generating reserves of heat stations and boiler-houses. 7

8. Energy efficiency of the economy
Strategic indicators
First stage
Second stage
Third stage
Specific energy intensity of GDP, % of the 2005 level
no more than 80%
no more than 62%
no more than 46%
Formation of additional energy potential for economic development:
100 mln. t c.e./y
200 mln. t c.e./y
300 mln. t c.e./y
Development of high-technological energy services with volume of:
200 bln. RUR/y
300 bln. RUR/y
400 bln. RUR/y
Mean decrease in specific losses and auxiliaries in FEC’s enterprises,
% by the level of previous year
no less than 1%
no less than 0,5%
Decrease in specific fuel rate for heat generation of heat stations and boiler houses,
% by the level of 2005
no less than 2%
no less than 6%
no less than 10% 8

9. Economic efficiency of the energy sector
Strategic aim:
Efficient relationship between government and energy business
Principles and mechanisms of realization
Creation of favorable economic environment
Support of strategic initiatives
Optimization of tax burden
Development of the insurance system of long-term investments’ risks
Rationalization of amortization policy
Formation of united leasing companies
Perfection of state price (tariff) regulations in the sphere of natural monopolies
Support of small and medium-scale business in FEC
Completion of liberalization processes in power generation
Stimulation of modernization and innovative development of FEC
System of prospective regulations, standards and norms
Perfection of license policy, elimination of inadequate administrative barriers
Organization and stimulation of raising the level of stuff’s skills in FEC
Strategic indicators of economic (budget) efficiency of FEC
First stage
Second stage
Third stage
Formation of stable institutional and legal environment in FEC
Financial stability of FEC and national economy 9

10. Ecological security of the energy sector
Strategic indicators
First stage
Second stage
Third stage
Decrease in emission of pollutants into atmosphere and hydrosphere by the FEC, % by the level of 2005:
no less than 15%
no less than 30%
no less than 50%
Volume of greenhouse gases emission, % of 1990 level:
no more than 83%
no more than 92%
no more than 105%
Rate of APG utilization (in 2005 – 75%):
95%
Forecasted dynamics of СО2-emissions 10

11. Key initiatives in the Russian energy sector
Energy infrastructure: deevelopment and diversification
Development of oil and gas complexes
in Eastern regions of Russia
Exploitation of the oil and gas potential of the Northern regions of Russia and Arctic off-shore
Non-fuel energy
Energy saving 11

12. Energy infrastructure: development and diversification
OIL
NATURAL GAS
Baltic Pipeline System - 2 – 50 mln. т/y
North Stream – 55 bln. cub. m/y
Eastern Siberia-Pacific Ocean – 80 mln. т/y
South Stream – 30 bln. cub. m/y 12

13. Development of oil and gas complexes in Eastern regions of Russia
Exploration and exploitation of oil and gas resources in Eastern regions of Russia will help to satisfy the domestic demand for energy resources and diversify directions of export 13

14. Exploitation of Oil and Gas Resources of New Regions (including Arctic offshore)
Shift in natural gas extraction in Russia
Shift in oil extraction in Russia
new regions
new regions 14

15. Non-fuel energy
Forecasted development of renewable power generation
Priority development:
Nuclear
POWER GENERATION
Hydro
Renewable
Putting into operation installed capacity of GWt will increase the share of renewable energy in power generation from 0,5 to 4,5% 15

16. Energy Saving
Expected results of energy saving and increase in energy efficiency in Russia
Potential of energy saving in Russia is estimated at level of 45% of the current consumption of energy resources
Saving of 240 bln. cub. m of natural gas, 340 bln. kilowatt-hour of electric power, 90 mln t of coal and 45 mln t of oil and oil products 1
Improvement in competitiveness of national economy under conditions of growing tariffs for energy resources 2
Consumption of energy resources can be reduced by:
Increase in revenues from extra export of oil and natural gas: bln. USD 3
20% in heat supply
30% in power generation
40% in industry and transportation
50% in living apartments
Decrease in governmental expanses:
3-5 bln. USD 4
Reduction in CO2 –emissions: 790 mln t/y
Improvement in ecological situation in the country 5 16

17. State Energy Policy in Russia
MECHANISMS
Key
priorities' realization
Rational market environment
Advanced standards and regulations
Prospective
state of
Russian
FEC
Strategic initiatives
Energy security
Management of state property
Energy efficiency of economy
Subsoil resources management
Development of home energy markets
Formation of rational energy balance
Economic efficiency of FEC
Social policy in the energy sector
Regional energy
policy
External energy
policy
1 STAGE 2 STAGE 3 STAGE
Ecological security of FEC
Scientific, technical and innovative policy
KEY
PRIORITIES
POLITICS 17

18. Export of primary energy resources up to 203018

19. Forecasted dynamics and structure of oil and oil products export
Forecast of oil and oil products export
Strategic directions of external energy policy
Diversification of the commodity composition of export
Diversification of the directions of export
Support of Russian energy companies (from upstream to downstream) abroad
Stimulation of transit flows of oil through the Russian territory
Formation of new Russian marker oil brand REBCO and promotion of its international trade 19

20. Forecasted dynamics and structure of Russian gas export
Forecast of gas export
Strategic directions of external energy policy
Diversification of export directions
Support of Russian energy companies (from upstream to downstream) abroad
Import of natural gas from Central Asia and its re-export to the CIS mainly
Production and transportation of LNG. Expansion into the new markets: the USA and Asia-Pacific 20

21. Forecast of investment in energy sector and energy supply of the national economy for the year of 2030
24-32% of investment in FEC will be directed in power generation, % - in oil industry, 21-24% - in gas industry and 3% - in coal industry. The sphere of energy supply will receive 22-23% of investment, forecasted in ES-2030 21

22. Expected results of ES-20301)
Guaranteed energy security of Russia and its regions 2)
Competent participation of Russia in ensuring global energy security, partly by means of diversification of export 3)
Gradual decrease in dependency of national economy from oil and gas sector and respective decline of FEC’s share in the structure of GDP from 30 to 18% 4)
Decrease in specific energy intensity of GDP by 2,1-2,3 times 5)
Optimization of fuel and energy balance, decline in the share of natural gas in energy consumption from 52 to 46-47% and increase in the share of non-fuel energetics from 11 to 13-14% 6)
Exploration and exploitation of new oil and gas producing regions 7)
Development of the social partnership between energy companies and society 8)
Improvement in financial stability, budget efficiency and investment prosperity of energy companies 9)
Innovative renovation of production assets and energy infrastructure, development of new energy technologies
10)
Ecological security and efficiency of FEC, limitation of greenhouse gases emissions (up to % by the level of 1990) owing to realization of the potential for energy saving 24

23. Thank you for your attention!25