Basic Characteristics of the RFE Energy Balance, 2002

1
Updates on the RFE Energy Sector and the RFE
LEAP model, and Implications of a Regional
Alternative Path for the Russian Far
East Victor Kalashnikov Economic Research
Institute FEB RAS Alexander Ognev Vostokenergo-RAO
EES Rossii, Khabarovsk, Russia Ruslan
Gulidov Economic Research Institute FEB
RAS Asian Energy Security Workshop 11-14 May,
2004, Beijing, China
2
Some Economic Indicators of the Russian Far East
(as of 2003)

• GDP Growth 11.1
• Industrial Product Growth 4.7
• Investments Growth 37.3
• Incomes Growth 12
• Export Growth 12.7

3
Investments into the RFE Energy Sector, million
USD
4
Bureiskaya HPP Related Network Project

• Construction of a hydropower plant of 2 GW with
  an output of 7.1 bln kWh per year
• First Unit of 185 MW commissioned in June 2003
• Second Unit of 185 MW commissioned in December
  2003

5
Basic Characteristics of the RFE Energy Balance,
2002

• Primary Energy Production - 30 million tce

6
Basic Characteristics of the RFE Energy Balance,
2002

• Total Energy Consumption - 36.4 million tce

7
Basic Characteristics of the RFE Energy Balance,
2002

• Total Energy Import - 22.8 million tce
• (62.5 of Total Energy Consumption )
• Net Energy Import 6.3 million tce
• (17.3 of Total Energy Consumption )

8
Basic Characteristics of the RFE Energy Balance,
2002

• Final Energy Consumption - 20.8 million tce

9
Energy Security Attributes Applied for Modeling
the RFE Energy Sector

• secure of energy supply for reasonable prices
• rational use of energy resources
• ecologically sustainable energy production and
  consumption

10
Methods to Model the Impact of Various Decisions
on the RFE Energy Security

• Demand for primary energy
• Sufficient energy supply with minimal costs
• Reasonable energy self-sufficiency, or energy
  independence
• Diversification of energy resources
• Energy efficiency policy
• Development of renewable sources
• Minimization of environmental impact (by the
  structural and technological factors)
• International cooperation with NEA countries

11
THE RUSSIAN FAR EAST
Southern Region
Sakhalin
CHINA
JAPAN
12
Key Assumptions for the Both Scenarios

• Growth of GDP in 2002-2010 5.5 annually, in
  2011-2020 5 annually
• Growth of industrial product in 2002-2010 4
  annually, in 2011-2020 3.5 annually
• Population growth in 2002-2010 0, in 2011-2020
  0.8 annually

13
Key Assumptions for the BAU Scenario

• There is no development of international energy
  cooperation
• There is no intensification of the use of
  renewable energy resources (the federal law On
  Renewable Energy Resources has been frozen)
• Russia does not ratify the Kyoto Protocol and the
  Energy Charter Treaty.
• There is no enhancement of ecological standards
  in the transformation sector
• The energy saving policy is absent
• Municipal reform is frozen.

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Basic Implications of the Assumptions Accepted in
BAU Scenario (1)

• The final electricity demand will amount to 2.5
  (2002-2010), in 2.8 (20112020) annually
• The final commercial heat demand 0.5
  (2002-2010), 0.8 (2011-2020) annually
• The increase in production of primary energy will
  be associated to the projects of Sakhalin-1
  (oil), Sakhalin-2 (oil, LNG). The projects total
  output will be exported
• The domestic primary energy demand will be mainly
  covered by a slight growth of coal production and
  expansion of coal import from Siberia

15
Basic Implications of the Assumptions Accepted in
BAU Scenario (2)

• The growth of electricity generation will be
  connected with the completion of Bureiskaya HPP
  and the construction of conventional coal units
• The lack of financial resources will restrict
  installation of small HPPs, wind power and other
  renewables power
• Weak growth of heat generation will be connected
  mainly with conventional coal boilers and coal CP
  Units in the cities
• Emissions of greenhouse gases and oxides will
  increase
• The energy consumption diversification index
  will rise (Herfindal index)
• Energy dependence of region will grow
• Demand for primary energy will grow

16
Key assumptions for the Regional Scenario

• There is an expansion of cooperation in the
  sphere of oil, gas, and electricity
  infrastructure
• There is an intensification of the use of
  renewable energy (the federal law On Renewable
  Energy Resources is adopted and activated)
• Russia ratifies the Kyoto Protocol and probably
  the Energy Charter Treaty
• There is an enhancement of ecological standards
  in the transformation sector
• The energy saving policy is activated
• Municipal reform is promoted

17
Basic Implications of the Assumptions Accepted in
Regional Scenario (1)

• The final electricity demand will amount to 2.5
  (2002-2010), 2.8 (20112020) annually.
• The increase in production of primary energy
  resources will be associated with the projects of
  Sakhalin-1 (oil, gas), Sakhalin-2 (oil, LNG),
  Sakhalin-3 (gas), the Siberian Kovykta project
  (gas)
• The growth in electricity generation will be
  connected with the completion of Bureiskaya HPP,
  steam-and-gas units, new hydro-power plants
  (oriented towards NEA countries)
• The promotion of the energy saving policy and the
  municipal reform will optimize the final use of
  commercial heat. The final demand for commercial
  heat will decrease as compared to the BAU
  scenario and annual growth rate will amount to 0
  (2002-2010), 0.5 (2011- 2020) annually.

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Basic Implications of the Assumptions Accepted in
Regional Scenario (2)

• The demand for heat generation will be covered
  with gas and low-sulfur oil-fired boilers
• The efficiency of energy transformation and
  distribution will significantly grow
• The non-traditional renewable energy will be
  applied in isolated and remote districts
• No increase in coal production is expected.
  Import of coal from Siberia will decline.
• Emissions of greenhouse gases and oxides will
  comparatively decrease
• The energy consumption diversification index will
  decline (Herfindahl index)
• The share of renewable energy resources will grow
• Energy dependence will decrease
• Demand for primary energy will comparatively
  decline

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Major Projects for International Cooperation for
the Regional Scenario

• Oil Extraction from Sakhalin-1 and Sakhalin-2,
• million tones per year

20
Major Projects for International Cooperation for
the Regional Scenario

• Oil Pipeline Angarsk Nakhodka

21
Major Projects for International Cooperation for
the Regional Scenario

• NG Extraction from Sakhalin-1 and Sakhalin-2,
• BCM annually

22
Major Projects for International Cooperation for
the Regional Scenario

• International Gas Infrastructure Projects

23
Major Projects for International Cooperation for
the Regional Scenario

• Possible New Power Plants in the RFE

24
Major Projects for International Cooperation for
the Regional Scenario

• Electricity Infrastructure Projects

25

• Thank you for Attention !