Russian Coal: Europe's New Energy Challenge

8/9/2019 Russian Coal: Europe's New Energy Challenge

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CLIMATE & ENERGY PAPER SERIES 2010

Russian Coal: EuRopEs nEw EnERgy ChallEngE

KEvin RosnER, p.D.

Senior Fellow, Institute for the Analysis of Global Security


2/34

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3/34

Russian Coal: Europes New Energy Challenge

Climate & Energy Paper Series

February 2010

Kv R, P.D.*

Av. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Excv S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Ic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

L Q R R N G . . . . . . . . . . . . . . . . . . . . 8

Sv Lc I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

W H C F Mz R? . . . . . . . . . . . . . . . . . . . . . .

Bck: R C G I . . . . . . . . . . . . . . . . . . . .

Sz G Pc D C D. . . . . . . . . . . . . . . . . . . . . . .

3 R E S : U C . . . . . . . . . . . . . . . . . 4

E S U L-G A . . . . . . . . . . . . . . 4

C C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 C Ic R C-F P . . . . . . . . . . . . . . . . . . . . 8

c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

H R Acc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

5 Rc F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Fc GHG E M: I E Ecc -O? . . . 5

C H P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

C G G Ic E G Dc . . . . 7

B P-COP5 F-U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

U.S. E L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

E S E E L . . . . . . . . . . . . . . . . . . . . . . . . 8

6 Cc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

*Kv R I A G Sc --c Journal of Energy

Security. H P.D. c cc Cc Uv, Lv-L-Nv, B, cz

R . H k z c c B

P, T I S, OECD, UNESCO.


4/34

Abbreviationsbcm cc

CCGT c cc

CHP c

CO2 c x

EIA E I A (U S)

GDP c c

GHG

GW

IEA I E Ac

IGCC I Gc C Cc

KWh K

Mt

Mtoe qv

MW

NGO v z

RES R E S

TWh

UNFCCC U N Fk Cv C C

VIR L F S c


5/34

Russian Coal: Europes New Energy Challenge3

The fundamenta

reality is that

Russia has the

leeway to increas

its CO2 emission

under the banne

of environmenta

action while

simultaneously

undermining the

global push to

limit greenhouse

gas emissions.

Executive Summary

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(GHG) c

CO R c-

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I 7, 34 c

99 v. , R c

increase 9 c

jcv. F , R

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c

.

R

ccv E cc,

c c c v, c U S. E c

cc -c

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J K, R C C S B W C, The New York Times, Dc 7, 9.

c R F, R c

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8 cc c

c c c.

N, E U

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R c

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c, x, ck, -

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E

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c c.

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A cc

c, c c

c , c x

. W

-v c

c x, R

c v. Sc 6, P

vc k

cc xz x

c c


6/34

he German Marshall Fund of the United States4

Russia could cost-

effectively meet its

increased power

demands through

large-scale energy

efficiency.

c ccc . c 7 MW

cc c cc c

q c c 3

3

cc

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c-. c

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cc , c. U.S.

EU v v

c k

R c

c c v cc

cc cc .A c x c, R

cc c. c

k ck R

x. R ck c c

c R v cc

c c

. I c c c

c c

c c cc

v c R

c v

c cc.

-, cc . vc

c c

c c .

c ,

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q

jcv j

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U.S. C c c

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c

R

x . c

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8.

cz v R c

c c c

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k. O R cc

v cc c,

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cv R .


7/34


It is highly likely

that at some

point in the futur

Russia will choos

to use more of

its coal for powe

generation.

EU xc k . Dk, x, c cc (

GDP) 75 c v 5

c CO ; v

cc

v c Dk q

cc c. E

q c k. F x,

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95 96,

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cc. I R v v

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8 c ) v

cc, c c,

v.

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c

v c

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cc R, c- c

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F -c

c k c c

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-c , c z

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c c.

F, R

xc : c

cc

cx, c v ,

F EU Ojcv C C C E-: B P Mj Dv Ec,I I S Dv, Dk,8: .

c cc c .

c

U.S. E ck

R jc

cc cc

R GHG :

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GHG c c-

cc

3 R E S.

. E U U S

R c c GHG

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c c

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3. R M N Rc,

cc, R k U.S. EU

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cc v

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cc z

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:


8/34


Therearecleareconomicgainstoimproving cc R

v c cc,

c c

R

c c c

z. Sc cc

k R ck

z

c c c.

TheUnitedStatesandtheEuropeanUnion

R c cv c

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cc .

q c-

cc c v

R c .

CombinedHeatandPower(CHP)isa

v c c

R

c CHP

v cv

R. U S E

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x CHP

c R GHG .

TheEuropeanUnionshouldworkwithRussia cc cv

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c c

c E

.

c c c z

c GHG

c- R

-cc E. c

c c c E P, EU

Dc-G E

(DG REN), k

EU-R C A.

U.S.policymakersshoulduseemerging

c k

c c v

R v cc

.

IfRussiacontinuestoliberalizeitsdomestic

k, z

, E U

U S c v

R

U.S. E S EU E L

,

R.


9/34


Introduction1

Russia is the

worlds fifth

largest producer

and the worlds

third largest

exporter of coal.Half of its export

are consumed

in European

markets. R F c

U S v c v.

I v v v .

qv c xc

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R c

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S (RES) , 3.

(9-) c

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cx

c [] x

k.5 I c

cc R-c

x k, c

c c

4 EIA, R C R, U M 8.

5 S E S R F P U , M E, R F: 3.

Key pints n the Russian energy sectr

TheRussianFederationissecondonlytotheUnitedStatesinprovencoalreserves.

Growthratesincoalproductionhaveexceededthoseinbothoilandgasforthepastseveralyears,

driveninlargepartbydemandforcokingcoalinsteelproductionandsteamcoalforexport.

TheglobaleconomicrecessionhascausedinvestmentacrossallenergysectorsinRussiatolag.

Mostimportantly,growthinRussiangasproductionisflat.

Therecessionandassociateddownturninpower-sectorinvestmentsprovidesawindowof

opportunitytoexaminetheriskthatRussiawillreachitsgoaltoexpanditsuseofcoalfor

domesticpowertoincreasetheavailabilityofnaturalgasforexports.

Thedropinpower-sectorinvestmentsalsoprovidesRussiaanopportunitytoidentifyoptionsto

dramaticallyimprovetheefficiencyofitspowersupplyanddemand.


10/34


Russias aging

supergiant gas

fields, lack of

infrastructure

investment, and

steadily increasing

domestic demand

lead to real

concerns about its

ability to deliver

contracted gas to

its downstream

customers.

c c k. c (-) c

x c

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cc.

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cx, c v

, c cc c

.

Lming Questins Regarding Russian

Natural Gas

Cc R

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x

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11/34


v 5 c.8

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c, R c

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A c, R c c . c- jc R c -cc x c. C c c, jc k c R ,k v - cc c c k c v z x c c c .

W . W ,R c cc c 86 GW

v cc.

cc c

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c v 3.5 GW )

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cc

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IEA C C: 34.

R, W, O Pc S-Ec, Der Spiegel, A9, 9.

3 R P F A C C S,R, J 7, 8.

With the onset

of the global

economic

recession,

Russias plans

for expandingpower production

to meet domestic

demand,

irrespective of

fuel choice, are i

jeopardy.


12/34


W c k, . C

c CO

(4 c) xc c

5. Der Spiegel

c: v c-

75 CO k

cc c, c c -

5 c

- . CO

- c ,

v c.4

Ov, R c c c, c 9 c

R c .

c v

R ck

c cc c

GHG x cqc

c c R.

c c c x

R c ,

-c

v v R x

4 I.

The global

recession may

provide a window

of opportunity

for Russian

policymakers

and those in the

global community

concerned about

capping GHG

emissions to

examine the

consequences

of fuel switching

from gas to coal

inside Russia.

c c c-c c,c c-cc , c c

cc c, -

c c c, c v

cc v c.

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k v c

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GHG v

c.

5 GHG UNFCC c c -c . c CO (c x), CH4 (),NO ( x), PFC (c), HFC (-c), SF6 ( x).

c c SO, NOx, CO NMVOC.S UNFCC c ://ccc./_/__ccc//446..

6 x c v cc R cc cv c k v c cv v c- c. c, v. F, GDP cc c. c , v cc c c, c c . Sc, R v c c . x c . W , ,

c c vc .


13/34


Sviet Legacy Issues

R c c c c

c c 93. B

95, c cc 59 c R

c. cv

v 96 c v

c c c

c. , 4 c c c

R .

N c c c

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c .7

Acc R c x Iv C.,

cv

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()

x c ()

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v R c

c c .

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R k . G-

R

v, c-

7 S M Mk ://.k./c/c/c/vv_c6., c c IEA (7).

c

v k c c c.8 z, ..

c R k,

c cc.

Why Has Cal Failed T Materialize in Russia?

U Sv c

R cc , c, ,

c de facto k

c R cx.

c c

c R v , ,

v.9

8 Iv C, C M R, .c.c.

9 D 98, R c j - v cv Vk C, v Gz c 989, M O G v. H v c -. C c jcv, c Sv U, k Gz c c K . RP Mvv v c GzB Dc. c xc - . C v c cv Rk, R Dc, c ccv c R - c.B V P R , R v ck v vz R, cv c,c I Sc cc v R F.

Key pints

Russiasdomesticpowerindustryisgas-based.

Gaspricesarestate-controlledwhilecoalpricesaresetbythemarket.Thisdampensthe

expansionofcoal-firedpowergenerationinRussia.

UnlessRussiamovestowardamarket-determinedpricefornaturalgas,itisveryunlikelythatit

willmeetitsgoaltoexpanddomesticcoaluse.

Background: The Russian Coal

and Gas Industries2


14/34


Subsidized Gas Prices Dampen Cal Demand

c v

c c

c (c)

Sv R . U Sv

cc , k c

c

c c

z. L cc c

( )

c c

c

c, c cc ck c cv c z

cc. R --

99 , c

c R c c

c v. F x,

c q 8

c c J, R

Ecc M c c

c c R

. ( c c

R A 8 $74

c v v $4 c

E k.) M c

c c c

-x q c

R v

v, [] c k

. Bckck

c z R c k

c v

c c.

R M D G Pc LP, R,A , 8.

c - R F, v ,

c k

, c . I , v,

c c c.

Acc IEA C C C, R

v [

] c x

v . F x,

J 99 c

c R xc

P F .

I , R , x

, c c c

R v c

. I c, c

cv z. I , -R

P M Mk Kv

C C R M I

E, k

v cc. C

c R v

c v c c

v c c : c v

, v c ( c)

, c

v c c.

G Cck Ax Kvck, Pc C C C c R, IEA C C C P-c, Oc 8:.

R C I 99-, Kommersant, Mc ,4.

Russian gas and

oil remain under

the close control

and scrutiny

of the Russian

government and

the composite

of interests that

it represents.

In contrast,

coal has been

comparatively

liberalized.


15/34


Conclusion: Relative to other industrializedcountries, coal-fired power is a much smaller

part of the energy mix in Russia than elsewhere.

Russias 2020 and 2030 Energy trategies reveal

that it is poised to dramatically expand its reliance

on coal to meet growing domestic power needs

and Europes demand for natural gas. A number

of Soviet legacy issues continue to plague the

coal industry, but if Russia lowers natural gas

price subsidies, coal would likely emerge as a

competitive fuel option, laying the groundwork

for the coal industry to meet a future increased

domestic demand for electric power.


16/34


Energy Strategy Undermined by Lw-Grwth

Assumptins

I 7 R F

A, -P P R

v c c cc

66 c c

. c

GDP x 4.9 c .

P c 4-5 GW

cc cc . I c,

R cc c c

c c cc

x.3 W R c

xc k x c

9, x c,

, v c.

Acc Nv 8

IEA C I Av B (CIAB)

SUEK, S c c

R c c, v

c c-

3 cv, c RAO UESc , 7:3 (: c) c c: 65.6c c 3.c . c c c c z v v.

ck xc4 6

c SUEK c c c

U S. Acc

R cc ,

RAO U E S, SUEK

, c- cc - (

GW cc cc) xc

c 47. GW, P

c cc c

both c andc .

v c, cc SUEK, 3 M 6 89 M .5

4 C Sc R: C SUEK R,CIAB P M, IEA, P, Nv 67, 8.

5 Acc R E S 3, c c R . R GDP ( cc c ) .3 , 3. EU c. c c c, c c, , c cc ck -c c c vc, cv ( , v ), c v. x k 39-47 c c c. A - cc (c-q ), 3537 c 57 c cvc.

Key pints

Russiahasnotmetits2020EnergyStrategygoaltoadd40-50GWofnewelectricitycapacity

tothegrid.Thisfailurewastiedtofasterthananticipatedeconomicgrowthandhigherthan

anticipatedenergyexports.WhileRussianPresident,VladimirPutinchosenottoinvestinkeynew

powerinfrastructure,asrequiredunderthe2020EnergyPlan.

Inapost-recessionaryperiodeconomicgrowthwillaccelerateinRussiaandanewgrowthin

demandwillneedtobemet.

The2030EnergyStrategylaysoutascenarioforevengreaterrelianceoncoalinitsdomesticfuel

mixtoallowmorenaturalgasforexport.

The Russian Energy Strategy 2020:

Unmet Challenges3


17/34


cc v

vc c-

RES. I, v, P v

c

v c. I c

, c

v , ck cc

v, z

(OSF). A j Gz

R, R F c

c ,

z c c v . D , c c

c k 8. c c v

78 ( ).

F-q 9 c c

R . R ,

c RIA-Nv,

R c c 7

c Q 9. I c

, 7 c v

8 . R

v v. A J 9, R 34 c --.8 A

Q3 9 R c k

c c

c

c 8 c c

( ).

IEA v

vc /c

c , c 5-6 :

.6:,

c.9

kc R c

8 Gz G O F R, J , 9.


W RES c cc,

c cc ,

R

. x

cc c

6:

RealGDPgrowthassumeda33.9percentgrowth

v

43.9 c.

Productionoffuelandenergywasprojectedto

c 5.

c.

Domesticconsumptionofprimaryenergy

c jc 9.8 c

c .3 c.

Exportoffuelandenergywasprojectedtogrow

3.9 c c 43 c.6

I 7, R GDP x

8. c, G8 c k c v

ccv cc x. R

cc v -7

v x,

c R c

c .7 A ,

c c

x x k. S

c

c.

O c c

v R F


7 I.:.

The Russian

Energy Strategy

identified clear

targets for

adding new

power generating

capacity, and wh

the role of coal

in adding to this

capacity is well

defined, Russia

has struggled to

implement its ow

strategy.


18/34


R z x

c c

c .

, ck cv

cc c

c c- c.3

c c c c, c c c, c. I ck R RkZz D (RZD), c c R Gz, v v c-k x c v R c . c x : () c c- c c-c cc ( c c x); () c c c -, c c v v cv

.3 C, c v v c z ck c c . c c v. c c v c vc k c c x -. I , RZD v v .

cc cv v

c , c

v v. Y Oc 9

Gz D H, Ax Mvv,

R c c c

k .S cc, c R c

c, c ,

c GHG

c.

Challenges f Transprting Cal

R c

v

k E S

cc c c c

R - c.3 Bc

3 R c c c c x. Sc, k C E. F, c / k c c cv c . A J 9, R 4-6 c, R c

Table1.Russiancoalandgasproduction,20012008

2001 2002 2003 2004 2005 2006 2007 2008Change 2008

over 2007

Russian Coal Production

20012008 (Million

Tons Oil Equivalent)

102.4 103.0 104.0 99.5 94.2 96.7 93.5 101.3 8.1%

Russian Gas Production

20012008 (Million

Tons Oil Equivalent)

473.6 484.9 505.2 516.0 522.1 543.4 532.8 541.5 1.4%

Data: BP Statistical Review 2009

Table2.RussianOilProduction20012008

2001 2002 2003 2004 2005 2006 2007 2008 Change 2008over 2007

Million Tons Oil 348.1 379.6 421.4 458.8 470.0 480.5 491.3 488.5 -0.8 percent

Data: BP Statistical Review 2009

The lack of

comprehensive

national transport

capacity for coal

has inhibited the

introduction of

new coal-fired

power generation

in some areas of

Russia.


19/34


B 8, c R E S

c. I , k

v v

3

v c. c

v R c. Acc

E S I Mc,

c c c

jc 4 M

3 c c 54 M

vv c.3 Acc

E I A (EIA), Mc 8, R v v

- c cc

c . I ,

cc

c. I cc ,

k jcv c

x.33

c EIA k ,

cv jc R

c- R - .

W , c v v, RZD c v cc- c c z c x.

3 G Cck Ax Kvck, Pc C C C c R, IEA C C C P-c, Oc 8.

33 E I A, Long Term EnergyOutlook, M 9.

Conclusion: Although Russia will not meetits goal to expand its use of coal by 28 percent

relative to todays levels by 2015, Russias updated

energy strategy reveals continued commitment

to dramatically increase coal for domestic power

production. The planned adjustment in the price

ratio of gas to coal after 2011 should accelerate

this trend.


20/34


v c.36 Acc

I Fc C W

Bk, R c v 45 c c37 cc,

qv c

Fc.38 I 6, c

c R GHG . W c

36 I.

37 P c c jc cv c.

38 G Cck Ax Kvck, Pc C C C c R, IEA C C CPc, Oc 8:36: I 4, R c .6 kW $GDP c x . kW/$GDP UK c GDP $, c U.K.$3, c GDP. R U.K. c 6 kW c cc R c c GDP/ccv U K. W 96 c c c, 3. c SO , c CO , .4 c NOx c.

The Carbon Impact of Russian

Coal-Fired Power4

R c c

. R -

c x C U S. R c

6.4 c

c x (CO) .34

M , R -c

jc c

U.S. -c 3.35

R - c

-

34

E Ecc R: U Rv, IFC R,8:8, ://.k./WBSIE/EXERNAL/COUNRIES/ECAEX/RUSSIANFEDERAIONEXN/,,cMDK:97538~PK:3565~PK:647988~PK:647986~SPK:356,..

35 A L, J W, S C, RC E Ecc C: A Nc C-, C Ac P, J 9, .-c.//9/6/Nc_C..

Key pints

Russiaisoneoftheworldsmostenergy-intensiveeconomies.Theenergylossesitincursdueto

supplyanddemandinefficienciesareequaltotheannualprimaryenergyconsumptionofFrance.

RussiaspercapitaGHGemissionswillberoughlythesameasthoseoftheUnitedStatesby2030.

TohelpRussiareduceitsGHGemissions,theUnitedStatesandtheEuropeanUnionshouldoffer

Russiaassistancetodesignandimplementastrongnationalcap.Suchassistancecouldinclude

supporttostrengthenitsinstitutionalcapacityandGHGinventory,andeventuallylinktoother

nationalandregionalemissionstradingprograms.

TheRussianMinistryofIndustryandEnergyandtheRussianMinistryofNaturalResources,along

withRussianindustry,shouldworkwithU.S.andEUgovernmentsandrepresentativesofprivateindustrytodevelopabaselineassessmentofthepotentialefficiencyimprovementsofbothenergy

supplyanddemandbeforeRussiaconsidersexpandingitscoal-firedpowercapacity.

Russiashouldbeencouragedtoworkwithforeignindustrialproduct,technology,andservice

providersontheidentificationofenergy-efficiencyandclean-coaltechnologies.Aninternational

conferenceshouldbeorganizedwithdonoragenciesfromtheUnitedStatesandEuropealongwith

internationalfinanceinstitutionstohighlightpotentialsourcesofsupportingfortheseefforts.


21/34


cc 8 c R ccc, c

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c c.

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67 c . ,

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.

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39 S C Ac P, A R:A S N A R Pc, ://.c.//9/7/_..

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(UNFCCC) 5

5 c c 99 v.

v v R

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k R

cc , c cv

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99 v.4

c cc c

c c

c R F without

adding new capacity c

cc energy efficient

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v v,

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c cc v v.

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c c-c c, v

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xv.4

4 I.

4 R Ac Wk E , S B- N.C, J , 9 ://..c/x.c//.//84.

4 K B, C F Oc C C FP, The New York Times, M , 9 ://..c/9/5////c..


22/34


O c R c

c k.

c c--,

c-cc (CCG), c-

c,

c. M cv

c v c. Ev k

c IEA

C C C

c

c c c v

c v.43

W is k R

cc v cc R

c v -

5 v x 3 c.44 Ov

, Dk cv cc

43 IEA C C: 44.

44 E Ecc Ic Pc Ecc Pc-

F F F, IEA I P G8 P Ac, OECD 8 :.

43 c U S 36 c. I-OECD c R c c

-OECD . I,

cc, c-

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48 c.45 x c cc

z R F

c c-

k. cx k

v, c v

.46

45 I.46 A cv c . S :c c c, A-R E- I c - Rc- 5:

Name

Capacity,

MW

Possible shipments (qnty) Cost

prediction

$/kW Notes

until

2005

until

2010

until

2015

Coal-fired units of

increased economic

efficiency

300500 1 2 5 850

Supercritical coal-fired

units

300500 1 5 900

Coal-fired units with

circulating fluidized-

bed boilers

50100

150200

2

10

4

40

10

950

900

Purchase of

licenses, joint

manufacture

with foreign

firms

Combined-cycle

plant with pressurized

circulating fluidized-

bed boilers

100200 1 4 1000 Purchase of

licenses, joint

manufacture

Integrated coal

gasification combined

cycle plants

150200

500600

1

1

1100

950

Pilot

operation

Sc: Cck, G Kvck, Ax: Pc C C C c R, IEA C C CPc, Oc 8.

O v c v c c c :

R cc xc R F

Lv cc cv R cc cv c v v / c v R c

c c v c c


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Technlgy

CCG v c-

c c v

R. c c cc

vz c , -c

c c c

c cc c (IGCC), IGCC

z- c, -

c (VIR), cc z-

c, c- .

R v CCG c c . F, R

c v

x. Sc, cc

c-

R (3 c v cc)

Dk (43 c cc)

cc . I R, v

cc v cc c

c cc C H

P (CHP) 33 c.47 W

CCG c , 556 c

cc v cv z.

O cc , R c

cc 37 c c

c 5 ( 8 c )

q cc c

v R c.48

c 7 MW

q c c c

3 3

. 49 c c

k GE, S, A v v c R

v. I , R

c c c

.

c c

R c . Acc Y

Lck, c NPO S,

R k, c

c k c

v . 5 q

47 IEA Ecc Ic, I. 46:3.

48 I, C .

49 C Rc C F P Ex, R,M 5, 8.

5 I.

Box 1. Calculating GHGEmissins: Eamples

The following emissions calculations are simply

an indicative expression of what may be expected

for GHG emissions based on standard coal

technology and the types of coal available to

Russian generating companies. At present

using the most current (2008) estimate of

what Russias newly privatized power producers

are willing to install for new coal-fired power

generation is 20 GW by 2015. It is estimated

that this new capacity will lead to a minimum of

15 thousand metric tons additional (CO-specific)emissions per annum using current coal-fired

technologies presently installed in Russia. An

increase of 15,000 Mt of additional CO is

equivalent to approximately 3.5 percent of its

coal emissions from 2003.*

If the above calculations are based on lignite

coal the emissions are even greater. In this

case, an increase of 22,000 Mt of additional

CO would be expected, equivalent to

approximately 5.2 percent of its coal emissions

in 2003. In short, data on what type of coal

is burned and that coals characteristicsare required in order to more precisely to

calculate expected GHG emissions from a given

technology holding all else equal.

* E S R R: 8, ://9.85.9.3/,E Sv C Bc S R.


24/34


() ability x k, k-, c c

R F, () willingness

j v c

cc c R R

c. v

W cc R

c-

xz cc c

GHG . , ,

c

cc c c R

c c k c v ,

R v, R c

. c ck

c c

.

Conclusion: There is a tremendous potential

that Russian emissions from coal-fired power

will increase dramatically over the next several

decades, as Russia is poised to expand its

reliance on coal to meet a growing domestic

demand for power needs. Plans to expand coal-fired capacity in Russia are on hold due to the

scarcity of financing tied to the global economic

recession. This creates an important opportunity

for Russia to engage in a detailed assessment of

potential to improve the efficiency of its power

sector. It also allows Russia the opportunity to

develop a plan to acquire the most efficient and

lowest-emitting coal technologies, including

technologies from abroad, in the case that it

eventually implements its plan to expand its

coal-fired capacity in the future. Russias GHG

emissions in 2007 were 34 percent lower than theiremissions were in 1990. This decline is due to the

drop in industrial output from decommissioned

Soviet facilities. In the absence of a cap on GHG

emissions or other mitigating measures, there

exist few barriers to prevent acceleration in

emissions from coal-fired power generation.


25/34


Hlding Russia Accuntable

I v c R c, v

R c-

, R cc

c

G8 99 UN Fk Cv

C C c

c. G8 6 S.P S v c

R F

c

quid pro quo k

ccc G8

Key pints

TherearecleareconomicgainstoimprovingtheefficiencyofRussiasenergysupplyanddemand

throughimprovedcostefficiencies,manufacturingoutputanddemandreductionsforbothRussian

industryandresidentialconsumersafter2011whendomesticgaspriceswillbeliberalized.Such

economicbenefitsarelikelytoresonatewithRussianpolicymakersmorethanthebenefitsof

minimizingtheimpactsofclimatechange.

TheUnitedStatesandtheEuropeanUnionshouldofferRussiaassistancewithacomprehensive

analysisofthepotentialcostsavingsandGHGemissionreductionstiedtoenergyefficiency

measures.Thestudyshouldquantifytheamountofnewcoal-firedpowergeneratingcapacitythat

couldbeavoidedifRussiaimplementssuchmeasures.

Combinedheatandpower(CHP)isarelativelylowcostandefficientoptiontomeetingRussias

energyneedsemissionsareroughly21percentlowerwhenCHPisusedrelativetoconventional

powergenerationinRussia.TheUnitedStatesandtheEuropeanUnionshouldofferRussia

assistancewithastudyofthepotentialforexpandedCHPtoreduceRussiasGHGemissions.

TheEuropeanUnionshouldworkwithRussiatoconductacomparativeanalysisoftheoverall

GHGemissionsitavoidsbyimportingnaturalgasfromRussia(ratherthanrelyingoncoal)and

thepotentialincreaseinRussiasemissionstiedtogreaterrelianceoncoalfordomesticenergyto

meetEuropesgrowingdemandfornaturalgas.Thestudyshouldincludepolicyrecommendations

tominimizethepotentialincreaseinGHGemissionsfromcoal-firedpowerinRussiabasedon

bestpractices.ThesediscussionsshouldbecarriedoutbyselectcommitteeswithintheEuropean

Parliament,theEuropeanUnionsDirectorate-GeneralforEnergyandTransport,andwithinthe

frameworkoftheEU-RussiaCooperationAgreement.

U.S.policymakersshoulduseemergingclimateandenergylegislationasaframeworktolaunch

bilateraldiscussionsandinitiativeswithRussiatoimprovetheefficiencyofpowersupplyand

demand.

IfRussiacontinuestoliberalizeitsdomesticenergymarket,withfullliberalizationby2011,the

EuropeanUnionandtheUnitedStatesshouldlaunchaninitiativewithRussiatoshareinsights

fromtheU.S.EnergyStarandEUEnergyLabelingprograms,withtheaimofsupportingthedesign

ofasimilarprograminRussia.

Recommendations for the Future5


26/34


v c c. c c :5

introductionofcleancoaltechnology,including

c c

widerintroductionoftechnologiesasa priority

measure c

cc c

thecaptureanduseofcoal-bedmethane

expansionofthemarketforsyntheticfuels,

c c c

A R v 6 G8 S

c c :5

promotionofenergy-savingandenergy-

cc v

v

theuseofmethaneotherwisereleasedinthe

c , ,

c

R

vc: NGO--NGO ,

ck--ck ,

c--c , x

k . W

c , cc

c c c

c P-Mvv

c cc , j c,

cc vc. F R,

c GHG

jcv. cc

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5 F Oc G8 Pc, ://.8./c/..

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R K Pc:

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K Pc, c c

c GHG v

, , cc J I c. v

c, c

c cc cc

GHG

Definitionofaclear,economically-basedbut

cc-

- GHG c c

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R ck

c c GHG

99 v realGHG c 9 .

F ck

53 R: E Pc C Mk, WWF, Mc7:3, ://..//3869____c_6_v___..


27/34


c c . v

c cc

c.

A cv cc

c c v

k c v

vc

cc c. Sc

vv R -R

v x, c NGO,

ck c-cv c v c

c,

GHG .

Sc cq c c

COP5, UN c

cc, c C,

Dk, Dc 9. Bck

c c v

(c ) v

I Fc C W

Bk. W

c c -cc .

Fcus n GHG Emissins Mitigatin:

Is There an Energy Efficiency Trade-off?

A j c v R

v c-

cc cvc R

v cc.

Acc Mc 7 IFC-WB , R

c v 45 c

c v 34 kW

cc c cv -

cc .54 c v

54 E Ecc R: U Rv, IFC R,

GHG . A

c R GHG (84

c R c c

c)

c cc c

c . Hv, c

c c c q

c. IFC k

c c:

Thepotentialenergysavingsintheenergy

3 c, qv 44.4 /

90percentofthesestepsareconsidered

cc v

Theincrementalinvestmentrequiredis$106

Theannualenergycostsavingsforinvestors/end-

7 c: $8 55

Returnoninvestmentis13.6years

c c

c v 89

c . I 7, R

c 4 c.

Sc v qv

37 c 7 c c

, c c .

Nv, IFC-WB c

v c :

8: ://.k./WBSIE/EXERNAL/COUN-

RIES/ECAEX/RUSSIANFEDERAIONEXN/,,cMDK:97538~PK:3565~PK:647988~PK:647986~SPK:356,..

55 .


28/34


Moreeasilyimplementable

Increasingbyone-thirdthecostoftheenergy-

cc c ( $ v)

Offeringanannualreturnoninvestmentoffour

v 3.6 -cc c

I c x cc

GHG c c. B

x, cc

v c

49 c, 53.4 :


cc v


c v

Focusofthesestepsinspaceheatingandwater

Incrementalinvestmentrequiredis$25-50billion

Annualenergycostsavingsforinvestors/end-

7 c: $4

Returnoninvestmentis2.8yearsat$50billion

v.

A, c

c , c

c

c- cc c

. Hv, c cv

v c -

c c, c

c c, k j

x.

Cmbined Heat and Pwer

Ov 4 c cc c

R c c(CHP). CHP -

xc c

. R c

: c 485 CHP , v

9, , , c ,

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CHP

c. M

cc

c. I c

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cc). Dcz CHP

c v c

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CHP c

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MW. I cc v c

x

56 E C Bc S R, ://./FI/kk/k//Dc/9/3%-9..

57 C H P: Ev Ov B G G Iv, IEA, 8:3.


29/34


cc, . c c

c c ,

c . CHP c

x z cc

c c R

- 7 GW cc .

A IEA c

() 5 3

c v c c

(c c c cc

c c c v) cc CHP c. I

cc CHP c

c c

v c c. Hv,

c-cc CHP

( c ) c

R. c R

v , , x.

R CHP

GHG . I c, IEA

cc c

cc CHP .

Cnfrnting the Greenhuse Gas

Implicatins f Eurpean Gas Dependency

W E c

c cc

v

c cc R k

x c cc

c. R c

x q

, c

E c c

v E

c c cc.

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-cv jc

R c cc

(

x), q v.

W R c c

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vc ck

c c ? U

ccc E c

c cv c GHG R c? I

c E

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cc c c

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c cc?

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c E

R c-

k GHG E c-

, , q

R v

cc c

c . v

c c,

c R ck,

cv c R GHG

c-

-cc E .

Bilateral Pst-CoP15 Fllw-Up

I NGO c

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c c c

GHG c

cc - COP5


30/34


C S. I c, A9, R C v

c c R. c c

c c

cc v R. I J 9,

M N Rc,

Y v, c

C, c

cc v

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c. Acc v, c

cck c c R

c c -5 c c GDP.B 5, c x

v c 6 ( .4

). D C , P c

cc c v.

c

R ck, , v

c c

c cc c

c c R cc

cv. I R v

z

c. , x-COP5 R c c c

c cc

cc cx.

U.S. Energy Legislatin

J- U.S.-R cv

c c cc

c c k

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, U.S.

C. C E J Ac P Ac, c, c

c c R. Sc 3

I C C P

c -c

cc U.S. c c

c c v.

c c U.S.-R v c

j U.S.-R c c

cc v. Sc 753

E Rc Rc D,

v c, c

R F.

-c cv c

, cc, c-

v GHG

c c R

cx, v c v

k .

Energy Star and Eurpean Energy Labeling

U S c cc

c cc c

E S, c j

Ev Pc Ac

D E. E S

c-v cc

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v cc cc

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c cv c v

6 c c, c c,

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c 5,

v- c-c z

v

$9 8 . 58 U.S. EPA

DE R

c c c

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c c

- v. EU v c

c c

58 I, 37.


31/34


xc EU - . cc ,

v, c c z

R c k

v k c

v c .


32/34


c cc R v cc

v

c cc c

c R

c. I c R

F v c z

jcv cc,

c c,

jcv RES 3 c

c R z. c

c c R

z c R c. Sc c cv

c c . I v

cv x

c c-

c c GHG

c c v

c c .

F, R , v,

ck c

c k c c

c c cc c c

cc R cc

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O c, c cc

cc c

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cc v , cc

c v

cc cc v.

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c c c .

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vc cc

cc.

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GHG . N IEA, UN

Iv P C C,

z xc

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- , R

GHG.

R

F v c

c NGO v,

z

c vv U S,

E U, R F,

x. jcv c

x c

R c

x c

. F E, EU-R

E D . F

U S c,

c k , c, v, xc

v cc, xc R

x.

I cc, v, R

c

, cc. B

jc c c

cv c . R

GHG .

R c E c.

Conclusion6


33/34


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