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Four Losing Situations

Как Россия может остаться без углеводородных козырей

Стрессовые сценарии развития экономики
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Director of the Center for industrial markets and business strategies ISRE Alexey Berezna presented stress scenarios for the Russian energy on 23 November at the round table at HSE (National Research University Higher School of Economics).

“The collapse in oil prices”

This scenario is being realized in the present moment. The reasons for more than triple collapse in oil prices are the development of shale oil production in the United States and the widespread implementation of energy saving technologies in developed and developing countries. How will these events affect the Russian economy? They will cause increase in the budget deficit, accelerate inflation and will lead to the freezing of large projects and reduce the stability of the leading Russian oil companies.

“Gas abundance”

The scenario presupposes a sharp increase in the supply of gas to the world market. It can be caused by the spread of the shale technologies of gas production, increase gas recovery and development of the inexhaustible resources of methane from gas hydrate deposits. (Gas hydrates are fossil crystalline compounds of water and gas located mainly in the permafrost zone). For Russia such a scenario would mean a loss of its position in the European natural gas market, the drop in its exports and in this regard the loss of a significant part of budget revenues.

“Total decarbonisation”

Cost reduction in technologies of wind and solar power production and transition to mass use of vehicles running on alternative fuels may lead to the implementation of this scenario. “Total decarbonisation” will hit Russian oil and gas exports, and will also lead to dependence on imports of equipment for alternative energy production.

“The hydrogen economy”

The development of this scenario is due to the large-scale implementation of technologies for the production of hydrogen from water or biomass on an industrial scale and at a low cost. In this case, Russia also faces a loss of its position in the global oil and gas markets and will be forced to import equipment to produce hydrogen.

These scenarios are not a sentence. What should be done to resist their development and prevent the possible consequences?

Valentin Parmon, scientific Director of the Institute of catalysis SB RAS

All energy crises were caused by political reasons. Unforeseen political factors have also changed the situation in the energy sector. In the next 20 years the dominant role in the energy sector will belong to fossil fuels. At the same time it is necessary to develop renewable energy sources, plant raw material should be one of the main resources.

Igor Lobovsky, President of the nonprofit partnership “global energy”

The fuel sources will lead position till 40-50ies. Today the agiotage around alternative energy sources is caused not by a real mass transition on their use but by the growth from virtually zero level. The share of clean energy at the moment is approximately 6.2%. We need technological breakthroughs to challenge traditional sources of energy.

The round table at HSE was called Revolutionary Technologies of Clean Energy, yet, it was not so much about the energy technologies of the future but about the obstacles to their development and how to overcome these obstacles.

What is «clean» energy?

Clean energy is produced with renewable sources and it does not pollute the environment. Clean, alternative or green energy can be produced using wind, solar, water (hydropower), the forces of tides, waves, evaporation of water (geothermal energy) and biofuels. Today green energy is rapidly gaining popularity. It shows especially a rapid growth in USA, EU, China and Japan. The governments of these countries are against traditional energy sources, because emissions of carbon dioxide and other greenhouse gases could lead to climate warming. The main method of dealing with global warming at the moment is the development of nuclear and renewable energy.

What hinders the advance of clean energy?

Researchers from HSE point out three main problems. The first and the key one is the high cost of equipment for energy storage. Solar and wind farms will not be able to receive a big share in the electric power balance if the energy output is unsteady and unpredictable. The second problem is the need to create from scratch an extensive network of fueling and charging stations. Also an obstacle is the resistance from traditional energy companies to smart energy technology, when users throughout one day can not only buy energy, but also to sell it to the network using their own mini-power plants. The managing Director of “ASIA RENEWABLES” William Il Yang Byun identified another problem at the roundtable: according to his words, the investment in green energy is small despite its apparent attractiveness. Advisor of the Secretary-General of the United Nations on climate change Rae Kwon Chung noted that the problem of investments in the alternative energy sector must be addressed by attracting both private and by public investment.
Government policy should be carried out consistently, according to experts, it is very important to steer energy sector by methods of tax regulation.

Russian energy sector has a chance to stay afloat with the help of the active implementation of alternative energy sources. Possible options include hot spring geothermal energy and hot dry rock geothermal energy.

Hot spring geothermal energy

This kind of energy is widely used in Iceland: the hot springs produce 25% of all energy in the country. The share of traditional fuels accounts for only 0.5%. The Icelandic winner of the Global Energy award Thorsteinn Ingi Sigfusson said that his country’s experience can be applied also in Russia. For example, on the Kamchatka Peninsula, energy from hot springs can provide all the needs of the region. According to experts, the development of hot spring geothermal energy in Russia will allow in 15-20 years to reduce the consumption of fossil fuels such as petroleum and its derivatives by almost one third.

Hot dry rock geothermal energy

The temperature rises by about 3 degrees every 100 meters down in the Earth’s interior. To get energy from this source it is possible to drill two deep wells, then to pour cold water in one of them and to get steam on the other. This method of obtaining energy is still in the testing stage but there is evidence of positive results.

Roundtable participants:

LEONID GOKHBERG, First Vice-Rector at National Research University Higher School of Economics
IGOR LOBOVSKY, President of the “Global Energy” Non-Profit Partnership
ILYA KUZMINOV, Leading Expert of the HSE ISSEK Foresight Centre
ALEXEY BEREZNOY, Director of the HSE ISSEK Centre for Industrial Market Studies and
WILLIAM IL YOUNG BYUN, Managing Director ASIA RENEWABLES, member of the International “Global Energy” Award Committee (Singapore)
VALENTIN PARMON, Director and Research Advisor at the Institute of Catalysis under the Siberian Branch of the Russian Academy of Sciences, “Global Energy” 2016 Laureate
KLAUS RIEDLE, Board member of the Association of German Engineers (VDI-GEU), “Global Energy” Laureate 2005 (Germany)
THORSTEINN INGI SIGFUSSON, General Director of the Iceland Innovation Center, “Global Energy” 2007 Laureate (Iceland)
RAE KWON CHUNG, Principal Advisor on Climate Change, Executive Office of the Secretary-General of the United Nations, member of the International “Global Energy” Award Committee, contributor to the award of IPCC Nobel Peace Prize 2007 (South Korea)

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