Updates on the RFE Energy Sector and the RFE LEAP model, and Implications of a Regional
Alternative Path for the Russian Far East
Victor KalashnikovEconomic Research Institute FEB RAS
Alexander OgnevVostokenergo-RAO EES Rossii, Khabarovsk, Russia
Ruslan GulidovEconomic Research Institute FEB RAS
Asian Energy Security Workshop11-14 May, 2004, Beijing, China
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 %
Investments into the RFE Energy Sector,
million USD
1999 2002 2003(estimated)
Electric Power 123 421 435
Oil & Gas 81 732 1940
TOTAL 214 1296 2445
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
Basic Characteristics of the RFE Energy Balance, 2002
• Primary Energy Production - 30 million tce
Coal 64%
Natural Gas 13.3%
Crude Oil 17%
Nuclear 0.24%
Renewables 5.4%
Basic Characteristics of the RFE Energy Balance, 2002
• Total Energy Consumption - 36.4 million tce
Coal 48%
Nuclear 0.19%
Renewables 5.5%
Natural Gas 11%
Oil & Oil Products
36%
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 )
Basic Characteristics of the RFE Energy Balance, 2002
• Final Energy Consumption - 20.8 million tce
Industry 28.9%
Agriculture 2.2%Residential 26%
Commercial 8.3%
Non-specified 5.2%
Construction 1%Transport 27.5%
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
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
Southern Region
Sakhalin
CHINA
THE RUSSIAN FAR EAST
JAPAN
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
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.
Basic Implications of the Assumptions Accepted in BAU Scenario (1)
• The final electricity demand will amount to: 2.5% (2002-
2010), in 2.8% (2011–2020) 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
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
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
Basic Implications of the Assumptions Accepted in Regional Scenario (1)
• The final electricity demand will amount to 2.5 % (2002-2010), 2.8 % (2011–2020) 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.
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
Major Projects for International Cooperation for the Regional Scenario
• Oil Extraction from Sakhalin-1 and Sakhalin-2, million tones per year
Sakhalin-1 Sakhalin-2 Total
2002 0 1.9 1.9
2006 12.6 4.7 17.3
2010 12.8 6.6 19.4
2015 12.6 4.73 17.3
2020 11.2 3.5 14.7
Major Projects for International Cooperation for the Regional Scenario
• Oil Pipeline Angarsk – Nakhodka
Route Length, km
Capacity, mln t
annually
Costs, bln
USD
Date of Commission
Angarsk – Taishet – Kazachinskoe – Tynda – Skovorodino – Nakhodka (incl. section of Tynda – Datsin)
4370 80
(incl. 30
to Datsin)
8 2012
Major Projects for International Cooperation for the Regional Scenario
• NG Extraction from Sakhalin-1 and Sakhalin-2, BCM annually
Sakhalin-1 Sakhalin-2 Total
2002 0 0 0
2006 1.5 2.5 4.0
2010 1.5 15.4 16.9
2015 10.2 16.4 26.6
2020 10.2 16.4 26.6
Major Projects for International Cooperation for the Regional Scenario
• International Gas Infrastructure Projects
Project Capacity, BCM Costs, USD
billion Date of
Commission
North Sakhalin – Khabarovsk – Vladivostok – DPRK - ROK
20 4 2016
Irkutsk – Mongolia - Beijing
30 6 2013
North Sakhalin - Japan 8
1.2 (subsea section)
2015
Major Projects for International Cooperation for the Regional Scenario
• Possible New Power Plants in the RFE
Plant Capacity, MW Output, bln kWh Date of
Commission Nizhnyay Bureya HPP 321 1.6 2012
Cascade Zeya HPPs 349 2.1 2014
Urgal-1 HPP 600 1.8 2015
Dalnerechensk HPP 595 1.4 2015
Uchur HPP 3700 17.2 2017
Sakhalin TPP (gas) 4000 20.0 2012
Major Projects for International Cooperation for the Regional Scenario
• Electricity Infrastructure Projects
Project Capacity, GW Costs, USD
billion Date of
Commission RFE – DPRK - ROK
0.5 GW (AC) 2-3 GW (DC)
0.2 1.0
2009 2012
RFE (Uchur HPP) - Shenyang 3 GW (DC) 1.5 2017
RFE (Irkutsk) – Mongolia - Beijing
3 GW (DC) 1.5 2017
Sakhalin – Hokkaido - Honshu
4 GW (DC) 2 2012
RFE (Cascade Bureya HPPs) - Kharbin
1 GW (AC) 0.3 2014
Thank you for Attention !