PROMITHEAS – 4
Knowledge transfer and research needs for preparing mitigation/adaptation policy portfolios
(Contract No. 265182)
This document is part of the relevant report prepared for the FP7 funded project “PROMITHEAS-4: Knowledge transfer and research needs for preparing mitigation/adaptation policy portfolios”, coordinated by Prof. Dimitrios MAVRAKIS, Energy Policy and Development Centre (Greece). The whole report contains twelve (12) documents for each one of the emerging economies that participate in the project: Albania, Armenia, Azerbaijan, Bulgaria, Estonia, Kazakhstan, Moldova, Romania, Russia, Serbia, Turkey and Ukraine.
Contents
Contents
List of Tables
List of Figures
Abbreviations
Abbreviations
Introduction
Objectives of the Russian climate change policy
Spectrum of climate change mitigation options for Russia
Spectrum of adaptation needs in Russia
References
Business – As – Usual Scenario (2000 – 2050)
BAU scenario description
References
Key assumptions
References
Energy Demand
Transformation
Global warming potential (GHG emissions)
Optimistic Scenario (2000 – 2050)
Optimistic scenario description
References
Key assumptions
References
Energy Demand
Transformation
Global warming potential (GHG emissions)
Pessimistic Scenario (2000 – 2050)
Pessimistic scenario description
Key assumptions
References
Energy Demand
Transformation
Global warming potential (GHG emissions)
Results of Long – Range Energy Alternatives Planning System (LEAP)
Demand
Transformation
List of Tables
Table 1: Expected energy savings (Source: GPEE-2020).
Table 2: List of potential projects under the Russian GIS (Source: Sberbank, 2010).
Table 3: United Nations projections for the Serbian population (UN, 2010).
Table 4: Projections for the Russian GDP (IMF, 2011).
Table 5: Projections for the GDP of Russia from different sources.
Table 6: Premium on market prices for RES-E (UNECE, 2010).
List of Figures
Figure 1: Population.
Figure 2: GDP.
Figure 3: Energy demand for households.
Figure 4: Energy demand for agriculture.
Figure 5: Energy demand for the industrial sector.
Figure 6: Energy demand for the services sector.
Figure 7: Energy demand for the transport sector.
Figure 8: Transmission and Distribution losses of electricity and heat.
Figure 9: Electricity generation.
Figure 10: Fuel shares in heat production.
Figure 11: GHG emissions per sector.
Figure 12: Energy demand for households.
Figure 13: Energy demand for agriculture.
Figure 14: Energy demand for the industrial sector.
Figure 15: Energy demand for the services sector.
Figure 16: Energy demand for the transport sector.
Figure 17: Transmission and Distribution losses of electricity and heat.
Figure 18: Electricity generation.
Figure 19: Fuel shares in heat production.
Figure 20: GHG emissions per sector.
Figure 21: Energy demand for households.
Figure 22: Energy demand for agriculture.
Figure 23: Energy demand for the industrial sector.
Figure 24: Energy demand for the services sector.
Figure 25: Energy demand for the transport sector.
Figure 26: Transmission and Distribution losses of electricity and heat.
Figure 27: Electricity generation.
Figure 28: Fuel shares in heat production.
Figure 29: GHG emissions per sector.
Figure 30: Final Energy Demand for Russia for the period 2000-2050.
Figure 31: Electricity generation for Russia for the period 2000-2050.
Figure 32: Total GHG emissions for Russia the period 2000-2050.
Abbreviations
AAU / Assigned Amount UnitBAU / Business As Usual
CHP / Combined Heat and Power
CERs / Certified emission reductions
CIS / Commonwealth of Independent States
DHE / Dangerous Hydrometeorological Events
EBRD / European Bank on Reconstruction and Development
EPC / Energy Performance Certificates
ERUs / Emission Reduction Units
ESCO / Energy Services COmpany
FAO / Food and Agriculture Organization of the UN
FDI / Foreign Direct Investment
GCM / Global Circulation Models
GDP / Gross Domestic Product
GFM / German Marshall Fund
GIS / Green Investment Scheme
GHG / Greenhouse Gas
IEA / International Energy Agency
IFC / International Finance Corporation
IPCC / Intergovernmental Panel on Climate Change
JI / Joint Implementation
LULUCF / Land Use, Land Use Change, Forestry
M/A / Mitigation/Adaptation
NC / National Communication
NEFCO / Nordic Environment Finance Corporation
OECD / Organisation of Economic Cooperation and Development
OPT / Optimistic
OSCE / Organization for Security and Co-operation in Europe
PCA / Agreement on Partnership and Cooperation
PDD / Project Design Documents
PES / Pessimistic
RAO UES / Unified Energy System of Russia (RAO-UES
REA / Russian [Federal] Energy Agency
RES / Renewable Energy Sources
RES-e / Electricity produced from Renewable Energy Sources
RF / Russian Federation
RMUs / Removal Units
RSEFP / Russia Sustainable Energy Finance Programme
RUR / Rublies
TPP / Thermal Power Plant
UN / United Nations
UNCTAD / United Nations Conference on Trade and Development
UNDP / United Nations Development Programme
UNECE / United Nations Economic Committee for Europe
UNEP / United Nations Environmental Programme
UNFCCC / United Nations Framework Convention on Climate Change
WMO / World Meteorological Organization
WTO / World Trade Organization
WWF / World Wildlife Fund
Introduction
Objectives of the Russian climate change policy
The Russian Federation (RF) signed on June 13th, 1992[1] and ratified on December 28th, 1994 the United Nations Framework Convention on Climate Change (UNFCCC) as Annex I country (Interagency Commission of the Russian Federation on Climate Change Problems, 1995).
The Federal Law 128-FZ “On ratification of the Kyoto Protocol to the UNFCCC”[2] was adopted by the State Duma of RF on October 22nd, 2004 and approved by the Council of the Federation on October 27th, 2004. Russian former President Vladimir Putin signed it on November 4th, 2004. The Protocol entered into force on February 16th, 2005, 90 days after the formal transfer of the instrument of ratification by Russia to the UNFCCC Secretariat on November 18th, 2004. Under the Kyoto protocol the Russian Federation has a 0% reduction in GHG emissions[3].
Under the Copenhagen Accord the country announced its economy-wide emission reduction target by 2020, which is to reduce its total GHG emissions by 2020 within a range of 15% and 25% compared to the 1990 level of emissions (UNFCCC, 2012). The range of this new target depends on the following conditions: (a) appropriate accounting of the potential of national forestry sector in the context of its contribution to meeting the obligations of anthropogenic emission reductions; and (b) the undertaking by all major emitters of legally binding obligations to reduce anthropogenic GHG emissions (UNFCCC, 2012).
The quantitative objectives of the Russian climate change policy are presented in the majority of the following documents:
- “Energy Strategy of Russia up to 2020” (Government Decree №1234-r issued on 28.08.03)” [4]
It was the first strategic program for energy in RF. It was updated with the Decree of the Ministry of industry and Energy (No. 413, dated on 21.12.2006) “On a refinement of the Energy Strategy of Russia for the period up to 2020 and its prolongation up to 2030” (Ministry of Energy of the Russian Federation, 2010) and finally replaced in 2009 by the “Energy Strategy of Russia up to 2030” which is described in a subsequent paragraph.
This document emphasised on the increased use of energy efficiency and the implementation of proper energy pricing policy due to the heavy dependence of the country on natural gas whose share in the energy balance during the 1990s was about 50%. The “Energy Strategy up to 2020” proposed a wider use of coal and nuclear energy with an anticipated share in year 2020 of 21-23% and 6% respectively (Helio International, 2006).
- National Action Plan on the Implementation of Kyoto Protocol in RF[5] (approved on July 15th, 2005 by the Interdepartmental Commission on the Implementation of the Kyoto Protocol in the country (Dena, 2008)).
It was a detailed, comprehensive action plan for the period up to 2010 and referred to requirements about prerequisites of compliance, suitable domestic policies and measures, the national greenhouse gas accounting system and historical GHG inventories since 1990, the national registry and reporting procedures, sectoral tasks and responsibilities for future negotiations, as well as to the Kyoto mechanisms (Dena, 2008). It contained quantifiable goals – referred also to already implemented strategies and programs - as follows:
- Energy consumption for the transport sector was expected to be restricted from 9,3 Mtce in 2004 to 10.3 Mtce in 2008 (goal initially set in Federal Program "Modernization of transport system of Russia (2002-2010) - Decree of the Russian Federation, № 232-p - February 16, 2001);
- Reduction of specific fuel consumption for electricity generation in power plants of RAO "UES of Russia" was set to 8% for the period 2004-2008 (Energy Strategy of RF until 2020 - Decree of the Russian Federation, № 1234-r - August 28, 2003)[6];
- Gas transmission and distribution losses from upsream to distribution were expected to be reduced by 47 Bln m3 for the time interval 2006-2010 (initially set by Federal Program "Energy Efficient Economy" for 2002-2005 and up to 2010 and in Draft Program of socio-economic development of the RF in the medium term (2005-2008));
- The share of renewable energy in total primary energy production was expected to be increased from 0,1% to 0,22%-0,3% in 2010 (initially set by Federal Program "Energy Efficient Economy" for 2002-2005 and up to 2010 - Decree of the Russian Federation N 83-p - January 22, 2001 and in Draft Program of socio-economic development of the RF in the medium term (2005-2008)).
- Order of Ministry of Economic Development of Russia from 30.11.2007 № 422 "On approval of the limits of reduction in magnitude of greenhouse gas emissions[7]” (reg.№ 10790 in the Ministry of Justice of Russia of 21.12.2007).
Although it is not a strategy, plan or program it sets the objectives for the main sectors so that Russia limits its GHG emissions at 300 mln. tonnes CO2 equivalent according to its Kyoto obligation. This target corresponds to the following limits per sector: energy – 205 mln. tonnes CO2eq, industry – 25 mln. tonnes CO2eq, solvents and other use – 5 mln. tonnes CO2eq, agriculture – 30 mln. tonnes CO2eq, wastes – 15 mln. tonnes CO2eq. The limit of absorption from land use and forestry is 20 mln. tonnes CO2eq.
- Presidential Decree No 889 «On some measures to improve the energy and environmental efficiency of RF economy» (approved on June, 4, 2008[8]).
It is a brief document, containing only one important quantifiable goal for energy efficiency: decrease by year 2020 of the energy intensity of GDP[9] by 40% compared to the 2007 level. Simultaneously, this target will contribute by year 2020 to a 30% reduction of the carbon emissions (Piskulova N., 2012). It also contains several important orders of President to Government, with deadlines, aimed at rendering the mentioned goal.
- The Main Directions of the State Policy in the Energy Efficiency of RES electricity for the period up to 2020[10] (No 1-r; issued on January 8, 2009).
It declares purposes and principles for the RES use in RF, sets quantifiable targets for the share of RES electricity production/consumption in the total energy balance and defines measures to achieve these targets. The document deals explicitly with the supply-side of electricity balance; expands and refines goals for the Action Plan about RES by setting for RES-generated electricity (except for electricity, generated by hydro power plants with power exceeding 25 MW) the following targets: by 2010 – 1,5%, by 2015 – 2,5%, by 2020 – 4,5% share in total electricity generation (Boute A., 2012).
- “Energy Strategy for the period up to 2030” (approved by Decree Νο 1715-r of the Government, dated 13 November 2009).
It is an updated version of the previously described “Energy Strategy up to 2020” (Ministry of Energy of the Russian Federation, 2010). It analyses the accomplishments of the previous Strategy and contains further details and expanded goals. The “Energy Strategy up to 2030” sets a 56% energy intensity reduction target for 2030 (compared with year 2005). To reach this goal Russia plans to create a favourable economic environment, including progressive liberalization of energy prices on the domestic market; to promote more rational energy use, and to establish a market for energy services. New standards, tax incentives and penalties, as well as energy audits need to be adopted. It defines the following targets:
- Reduction of the share of gas in the primary energy consumption from 52% in 2005 to 46-47% by 2030 (Ministry of Energy of the RF, 2010);
- increase of the share of non-fuel energy in the primary energy consumption from 11% up to 13–14% by 2030 (Ministry of Energy of the Russian Federation, 2010);
- non-realised potential of energy saving to up to 40% of domestic energy consumption (Ministry of Energy of the Russian Federation, 2010). This potential is broke down into the following components:
- residential buildings by 18 – 19%;
- power generation, industry, transport by 13-15% each;
- heating, services, construction by 9-10% each;
- fuel production by – 3-4%.
- large-scale reduction in the specific energy intensity of the economy and the energy sector (by 2,1–2,3 times) along with insignificant growth of domestic consumption (by 1,4–1,6 times), export (by 1,1–1,2 times) and production (1,3–1,4 times) of energy.
- Climate doctrine of RF (CD RF) (approved by Presidential Decree of RF No 864p on December, 17, 2009)[11]
It is a short framework paper, describing briefly and in general terms main notions of climate policy in RF, declaring risks and positive outcomes of global climate change for the country, wide categories of M/A instruments, etc. It contains no quantifiable goals or particular actionable plans, only declarations. It does not present concrete goals, but sets the framework of actions that the country will undertake in addressing climate change.
- State Program of the Russian Federation “GPEE-2020” (“Energy saving and improving energy efficiency for a period up to 2020”[12]) (Governmental Order No. 2446-p, issued on December 27, 2010[13]).
This program aims to decrease energy intensity of GDP by 13,5%, and save up to 100 millions of standard fuel per year by 2016 and 195 millions of standard fuel per year by 2020. This goal breaks down to the following targets (in terms of energy savings):
Table 1: Expected energy savings (Source: GPEE-2020).
Goal for 2011-2015 / Goal for 2011-2020Primary energy / 334 millions of tons of standard fuel / 1124 millions of tons of standard fuel
Natural Gas / 108 billions of m3 / 330 billions of m3
Electricity / 218 billions of kWt/h / 630 billions of kWt/h
Heat / 500 millions of Gcal / 1550 millions of Gcal
Oil and products / 5 millions of tons / 17 millions of tons
GHG emission reductions / 673,5 million tons CO2 eq. / 2436 million tons CO2 eq
The implementation of this Program is linked with other programs such as: i) the “Concept of Socio-Economic Development of the Russian Federation for the period up to 2020” (Government Decree № 1662-r, issued on November 17, 2008) since the significant increase of the energy efficiency level is required for achieving economic growth (GPEE-2020, 2010); ii) the federal target program "comprehensive program of modernization and reform of housing and communal services for the 2010 - 2020 years" (approved by the Government of the Russian Federation of February 2, 2010, № 102-p). It refers to the achievement of energy conservation and energy efficiency in municipal infrastructure.
- “Comprehensive Implementation Plan of the Climate Doctrine by 2020,” (Decision of the Government No 730-p, 25 April, 2011[14])
It concerns adaptation and mitigation measures, efforts on education and long-term GHG scenarios (Piskulova N., 2012). It does not include details on the amount of money allocated either to the program as a whole or to each individual item (Chepurina Maria, 2012). The Plan includes 31 items for presenting a detailed guide on what, when and by what state agency should be done (Chepurina Maria, 2012). More specifically:
- the Russian Federal Service for Hydrometeorology and Environmental Monitoring will conduct from 2012 comprehensive research and assessment of the Russian climate, climate change and its impact on national security, precipitation and ocean level forecasts.
- the Ministry of Economic Development will introduce changes into Russia’s long-term macroeconomic forecasts “taking into account climate risks, mitigation of anthropogenic impacts on the climate, and adaptation to climate change” (2011-2020). The same Ministry will specify actions in different sectors of the economy, time periods and agencies responsible for their realisation.
- the Ministry of Natural Resources will prepare “guidelines for the development of sector-specific methodologies of estimation and assessment” of particular consequences of climate change, in order to prepare regional and territorial adaptation plans for different industries and ministries
- The Ministry of Agriculture, regarding harvest forecasts; The Ministry of Health with regard to infectious and parasitic diseases; The Federal Forestry Agency with respect to Russia’s forests and peat bogs; The Ministry of Regional Development, regarding infrastructure endangered by permafrost melting;
Part III of the Plan focuses on actions for the transport, housing and industry sectors, implying measures for increasing energy efficiency, the production of hybrid cars and usage of alternative and hydrogen-based fuels, the building of “passive houses” (with zero energy consumption), and the introduction of a domestic greenhouse gas emissions trading system (Piskulova N., 2012; Chepurina Maria, 2012). Finally, the necessity of greater international climate-change cooperation is acknowledged.
Spectrum of climate change mitigation options for Russia
Total Russian GHG emissions (excluding LULUCF) amounted to 3323419,06 Gg CO2 eq. in 1990 (the base year) and decreased by 36% from the base year to 2004, due to the steep economic decline in the 1990s (European Parliament, 2008). In 2004, Russia was the third largest energy consumer and simultaneously the world’s third largest emitter of GHG – behind United States of America and China - in absolute terms, with a share of approximately 6,2% of the global GHG emissions (Charap S. and Saforov G., 2010; Anker M. et al., 2009; European Parliament, 2008).
In 1999 one-third of Russia’s total CO2 emissions were attributed to the power sector (Kornilova Alexandra, 2007). In 2010 the energy sector was one of the major sources of environmental pollution in the country with over 50% of air pollutants emissions, over 20% of dirty polluted discharges into the surface waters, and over 70% of total GHG emissions (Ministry of Energy of the Russian Federation, 2010). The last percentage is higher according to the Fifth National Communication of the Russian Federation to the UNFCCC in 2010. The energy sector finally accounted for nearly 82% of the national anthropogenic GHG emissions referring to the same time period (IFC, 2011b). This fact justifies why the Russian energy sector has a key role to play in reducing the country’s impact on climate change (IFC, 2011b).
On the other hand, the Russian energy sector contributes significantly to the national economy since it is heavily dependent on oil and natural gas exports. The oil and gas sector generate more than 60% of the country’s export revenues (64% in 2007), and accounts for 30% of all foreign direct investment (FDI) in the country (European Parliament, 2008).
Russia is the world leading country regarding reserves (23% of the world reserves) and annual production of natural gas. It provides 25% of the world trade in natural gas, having a dominate position in the European gas market and in the gas market of the Commonwealth of Independent States (Ministry of Energy of the Russian Federation, 2010). It is ranking second regarding coal reserves (19% of the world reserves) and eighth regarding oil reserves (Ministry of Energy of the Russian Federation, 2010; European Parliament, 2008). Respectively the country is world's largest exporter of natural gas, and the second largest oil exporter (European Parliament, 2008). All these resources constitute a major portion of Russia’s exports. Around 80% of Russia’s exports constitute oil, natural gas, metals and timber[15]. The country is ranking fifth in terms of annual production of coal (5% of the world production) and accounts for approximately 12% of the world thermal coal trade (Ministry of Energy of the Russian Federation, 2010). Russia possesses the seventh largest oil proven reserves (6,3% of the world reserves) and ranks second among the world’s producers (12,4%) (Shadrina E., 2010). By 2008 Russia had increased its share in world oil production from 9% to 12,4% (UNDP, 2009). Based on production levels of 2010, Russian oil reserves are sufficient for another 21 years, while gas reserves for another 80 years (Shadrina E., 2010).