Russian energy sector Russian energy sector Russian energy sector Russian energy sector and carbon emissions scenarios: and carbon emissions scenarios: and carbon emissions scenarios: and carbon emissions scenarios: coming to 2050 coming to 2050 coming to 2050 coming to 2050 AIM Training Workshop AIM Training Workshop October 16- October 16 -20, 2006 20, 2006 Tsukuba, Japan Tsukuba, Japan
Oil production Oil production Oil resources are 44 billion t Oil resources are 44 billion t Proven reserves are estimated at 19 Proven reserves are estimated at 19- -25 25 billion t. billion t. Exploratory drilling isn’ ’t sufficient t sufficient Exploratory drilling isn 600000 Only reserves developed 30 Only reserves developed 30- -40 years 40 years 500000 ago are being exploited ago are being exploited At least US$ 3 billion annual At least US$ 3 billion annual 400000 investments in exploration are needed, investments in exploration are needed, 10^3 t 300000 otherwise oil production may start otherwise oil production may start declining sharply after 2010 - declining sharply after 2010 -2015 2015 200000 The legislation does not guarantee to The legislation does not guarantee to 100000 the explorer a right to develop the explorer a right to develop recovered field 0 recovered field 1990 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 The government is back to the oil The government is back to the oil industry, partly through expropriating industry, partly through expropriating and by purchasing the assets and by purchasing the assets O il p ro d u ctio n O il and petroleum products consum ption Private business does not have clear Private business does not have clear investment perspectives investment perspectives The current tax system doesn’ ’t t The current tax system doesn stimulate oil production stimulate oil production
Natural gas: production stagnates, domestic Natural gas: production stagnates, domestic consumption grow s, export may decline consumption grow s, export may decline Proven reserves of Russian natural gas are 29.1*10^ 12 12 Proven reserves of Russian natural gas are 29.1*10^ 800 m 3 3 m Investments reduction to gas industry¥try 110- 700 150 billion US$ Gas production in 2004 amounted to 509.2 toe Gas production in 2004 amounted to 509.2 toe 600 In 2005 for the first time after 1993 reserves additions In 2005 for the first time after 1993 reserves additions 500 billion m3 exceeded the production exceeded the production Serious difficulties in fulfilling export 400 contracts Gasprom blocks potential production growth from blocks potential production growth from Gasprom 300 independent private producers independent private producers 200 Expanding gas production is not Expanding gas production is not Gasprom Gasprom’ ’s s Needed investments to fill the gap are 210-230 billion US$ 100 investment priority investment priority 0 Transport capacity is limited, and transportation Transport capacity is limited, and transportation 1990 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 system is obsolete system is obsolete Inefficiency of gas use brings demand up and export Inefficiency of gas use brings demand up and export down Expected gas production down Domestic prices are growing. After they are around Domestic prices are growing. After they are around Gas production in major gas provinces US$ 100 per 1000 m 3, 3, local consumers will be as US$ 100 per 1000 m local consumers will be as Gas consumption with an active energy efficiency policy and natural gas export with attractive as foreign ones attractive as foreign ones only minimal contractural volumes after 2010 Gas price growth not necessarily will stop the growth Gas price growth not necessarily will stop the growth Gas consumption and natural gas export with only minimal contractural volumes after 2010 of domestic demand of domestic demand Gas production will be increasing till 2020 Gas production will be increasing till 2020 Source: Center for energy efficiency (approximately 775- (approximately 775 -805 billion m3) and then slowly 805 billion m3) and then slowly down to 650 down to 650- -620 billion m3 in 2050 620 billion m3 in 2050
Coal: lack of clean technologies limits the scale Coal: lack of clean technologies limits the scale of application of application Proven reserves of Russian coal is more than 200 Proven reserves of Russian coal is more than 200 billion tones billion tones 200000 The share of coal in TPES declined from 21% in The share of coal in TPES declined from 21% in 180000 1990 to 17% in 2005 1990 to 17% in 2005 160000 140000 The share of coal in electricity generation went The share of coal in electricity generation went thosand toe 120000 down from 66% in 1955 to 25% in 2005 down from 66% in 1955 to 25% in 2005 100000 80000 Lack of coal enrichment facilities Lack of coal enrichment facilities 60000 Small number of dual fuel (coal and gas) power Small number of dual fuel (coal and gas) power 40000 stations stations 20000 0 The costs of coal transportation for long distances The costs of coal transportation for long distances 1990 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 are high are high Coal consumption There are efficient breakthrough technologies, but There are efficient breakthrough technologies, but their application experience is very limited their application experience is very limited Possibility to switch back from gas to coal is very Possibility to switch back from gas to coal is very limited: maximum of 7 billion m3 may be replaced limited: maximum of 7 billion m3 may be replaced with coal with coal Coal production growth will be going on till 2050 Coal production growth will be going on till 2050
Pow er sector: Russian economy faces shortage Pow er sector: Russian economy faces shortage of pow er capacities of pow er capacities Power generation amounts to 930 TWh in Power generation amounts to 930 TWh in 2004 2004 Power capacities built in the Soviet Era are Power capacities built in the Soviet Era are fully loaded in some regions fully loaded in some regions 3 5 0 In 2004, only 32% of industrial applications In 2004, only 32% of industrial applications D em and for pow er capacity for power connections were met; in 2005 for power connections were met; in 2005 - - 3 0 0 for the "efficiency" 21%, in 2006 - - 16%, in 2007 16%, in 2007 – – 10% 10% 21%, in 2006 scenario 2 5 0 Before 2010, US$ 87 billion are to be raised, Before 2010, US$ 87 billion are to be raised, D em and for pow er capacity 2 0 0 and US$ 250 and US$ 250- -330 billion before 2020 330 billion before 2020 GW for the "inertia" scenario Only a small part of the market is liberated. Only a small part of the market is liberated. 1 5 0 With the “ “inertia inertia” ” strategy, efficiency will strategy, efficiency will With the 150 -200 billion US$. 1 0 0 P ow er capacities w ith an keep declining every year keep declining every year account of 5 0 Blind tariff policy squeezes the CHP market Blind tariff policy squeezes the CHP market 250 - 330 billion US$ decom m issioning niche with a “ “competitive vice competitive vice” ” niche with a 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Power machinery industry is not ready for Power machinery industry is not ready for large large- -scale investments scale investments S ource: C enter for E nergy E fficiency “Efficiency Efficiency” ” scenario is able to save US$ scenario is able to save US$ “ 150- 150 -200 billion in the power sector 200 billion in the power sector Power generation in 2050 is expected to be Power generation in 2050 is expected to be 1700- -2100 TWh 2100 TWh 1700
Projections of Russian energy supply Projections of Russian energy supply in 2000 - -2050 according to different estimations 2050 according to different estimations in 2000 Oil production (mt) N atural gas production (billion m 3) 600 900 500 800 700 400 600 300 500 200 400 100 300 0 2005 2010 2015 2020 2025 2030 2000 2005 2010 2015 2020 N u c le a r p o w e r g e n e ra tio n (k W h ) Power generation (billion kWh) 700 2500 600 2000 500 1500 400 300 1000 200 500 100 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Tw o Projections of GHG emissions for Russia Tw o Projections of GHG emissions for Russia Tw o Projections of GHG emissions for Russia Tw o Projections of GHG emissions for Russia Russian GHG emissions in 1990 amounted Russian GHG emissions in 1990 amounted First projection First projection First projection First projection to 3039 MtCO 2 including: to 3039 MtCO 2 including: CO 2 – 2372; 2372; CO 2 – CH 4 – 557; 557; CH 4 – Scenarios of GHG emisions N N 2 2 O O – – 70; 70; others others – – 40. 40. 3500 GHG emissions in 2000 aggregates 1678 GHG emissions in 2000 aggregates 1678 3000 MtCO MtCO 2 2 (78%) (78%) 2500 1% growth in GDP entails 0.2 1% growth in GDP entails 0.2- -0.3% growth in 0.3% growth in M tC O 2 2000 GHG emissions GHG emissions 1500 No one scenario for Russia won’ No one scenario for Russia won ’t exceed t exceed 1000 GHG emissions quote of 1990 GHG emissions quote of 1990 500 0 2000 2010 2020 2030 2040 2050 Optimistic scenario Moderate scenario GHG emissions in 1990
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