Russia Energy Production Trends

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How The Energy System Is Structured

Since the early 1990s, the power sector in Russia has undergone significant changes to its structure, priorities, and generation capacities. In 1992, the power industry was reorganized into the 50% state-owned company RAO UES, the largest electric power holding company. Privatization and further restructuring of the power sector took place between 2006 and 2008. At present, there are several large and many small companies on the market with different types of ownership, including state-owned and private companies.

Almost all grids in Russia are connected to one Unified Energy System (UES) consisting of seven regional systems based on their geographical location. They are interconnected with high-voltage grids and synchronized with each other. There are around 700 power stations with an installed capacity of over 5 MW in Russia. By the beginning of 2016, the overall installed capacity of the Russian UES was equal to 235.30 GW.

The majority of the energy market is shared between the large holding companies described below in the section Profiles of Leading Energy Companies. Many large companies with thermal generation capacities have strategic goals for GHG emission reduction that are supposed to be reached by the following approaches:

  • Coal to gas conversion,
  • Use of co-generation (heat and electricity, allowing for about 90% efficiency of fuel use),
  • Increase of generation efficiency via equipment modernization and BAT application,
  • Cuts of losses in grids,
  • Introduction of renewable energy: small-scale hydro, solar, wind, geothermal, biomass energy generation, and
  • Increase in energy efficiency by producers (own needs) and consumers (through awareness).

Development of renewable energy is promoted by the state and by interested international companies. The use of renewable energy is also a necessity in the distant regions of Russia where the UES grids are not accessible.

In terms of international support, there are several renewable projects throughout Russia. For example, the construction of the largest wind energy park in the Far East was supported by the Japanese company NEDO, which donated the generation equipment for the park. As another example, on the 2nd of September, 2016, Mitsui, JBIC, and RusHydro signed a memorandum of understanding to support  energy generation capacity development in the Russian Far East, emphasizing the development of renewable energy, including geothermal sources.

Projects for renewable energy also are being supported supported by the state. Federal Law #35-FZ of 26.03.2003 and a number of other normative acts establish a special procedure for the sale and pricing for renewable energy. The RF Government Decree #1-p of 08.01.2009 established the gradual targets and indicators for renewable energy development by 2024. The final targets for 2024 are the following:

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Sources of Energy

The structure of the different energy sources used for power generation in Russia (for 2013—the latest full data available) is presented in the table below.

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In 2015, the total electricity generated within the UES of Russia was produced from the following sources:

  • Thermal power generation—160,233.28 MW (68.1%)
  • Hydropower generation—47,855.18 MW (20.34%)
  • Nuclear power generation—27,146 MW (11.53%)
  • Solar energy—60.2 MW (0.03%)
  • Wind energy—10.9 MW (0.005%)

Profiles of Leading Energy Companies

The largest energy producers are:

  • Rosenergoatom Concern JSC (state-run company; all nuclear power)
  • RusHydro PJSC (state-run company; hydro, small hydro, thermal, geothermal, solar, and wind power)
  • Gazprom Energoholding LLC (subsidiary of state-run company; thermal power)
  • Unipro PJSC (E.ON Russia JSC until June 2016, private; thermal power)
  • PJSC Enel Russia (private; thermal power)

The renewable projects in Russia are managed either by large energy companies or small-scale private companies. There are several examples of successful implementation in the framework of the state support mechanism. The first solar energy project constructed in the framework of the state support mechanism, with the installed capacity of 5MW, was commissioned in the Orenburg regions in May 2015. In October 2015, the first units of solar project with the overall capacity of 10MW were commissioned in the Republic of Bashkortostan. Seventy percent of its equipment was produced in Russia. One of the largest solar power stations in Russia, located in Orsk, has a current capacity of 25 MW with a potential increase of up to 40 MW. It is constructed on a brownfield site previously used as a coal power station landfill.

In September 2015, the wind power complex, consisting of 3 wind power units, was opened in the Russian Far East. Its current capacity is 900 kW and it is expected to produce 2 GWh annually. This complex will be expanded with seven more units by the total capacity of 3 MW.

During 2014 and 2015, planned growth slowed because the overall economic situation prevented faster development of renewable projects. Other reasons were the overall excess of generation capacities in the power sector, easy access to and relatively low price of fossil fuels, and a lack of reliable medium-term and long-term forecasts for energy demand and price. However, there are many opportunities for further development of renewable energy projects in Russia.

Submitted by Climate Scorecard Country Manager Dr. Elena Zaika

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