No-momentum energy saving

At the current pace of state program implementation, the energy intensity of the gross domestic product will decrease by no more than 21% by 2035, the Ministry of Economic Development presented the State Report on the state of energy conservation in the RF. Representatives of the Russian Social and Ecological Union believe that practical actions and financing are crucial for the improvement of energy efficiency.

This StateReport on the state of energy conservation and energy efficiency in the RF contains data analysis regarding the dynamics of energy consumption in leading sectors of the economy and the impact of state policy on existent indicators of energy efficiency.

The report was prepared in accordance with the Decree of the RF Government “On the Preparation and Distribution of the Annual State Report on the State of Energy Saving and Improving Energy Efficiency” No.1412 of December 18, 2014; this is the fifth annual official issue of the document.

The new report shows that the “energy landscape” in Russia is gradually changing; consumption of coal and oil products is declining: over the past 4 years, their total share in the balance of the RF went down from 33% to 29%. At the same time, “the absolute leader in terms of growth is the segment solar and wind power plants, which adds up at about 13% per year,” the report says.

Experts indicate that more than 80% of the total consumption of fuel and energy resources (FERs) falls onto four sectors of the economy: electricity and heat (28%), manufacturing (22%), population (17%), and transport (16%).

As it comes out from the report, the energy services market had been “steadily developing” in 2016-2018. furthermore, experts stated that objects of the social sphere are the driving force of this process. The majority of contracts (about 60%)are concluded by pre-school, general education and health care institutions.

The experts cite data: metering devices are being installed slower than planned. 7 years since the beginning of the federal program, the implementation level of only 61% has been achieved.

The pace of implementation of modern energy-saving technologies is also insufficient. For example, only 5% of all residential buildings commissioned in recent years have an increased energy efficiency class. Today, more than half (54%) of all apartment buildings in Russia consume twice as much energy as their modern counterparts.

Experts from the Ministry of Economic Development highlight the active work on attracting investment in the energy efficiency sphere carried out in some Russian regions. In 2018, the leaders in attracting investments were the Kaluga, Magadan, Omsk, Moscow and Murmansk regions. The Belgorod, Novgorod, Yaroslavl regions and the Republics of Udmurtia and Tatarstan are in the lead by the number of concluded energy service contracts.

However, experts of the Ministry of Economic Development consider insufficient the overall amount of investments in energy saving and energy efficiency. They note that attracting extrabudgetary sources has slowed down by 50%; the dispersion of specific indicators of investments in energy conservation among entities is up to 300%, and the total investment in this area in 2018 amounted to only 0.2% of the total gross regional product (GRP).

As a result of insufficient funding, in 2007 – 2018, the energy intensity of gross domestic product (GDP) in Russia had only decreased by 12%, whereas in accordance with the Decree of the RF President, this figure should have been at least 40%.

Analyzing the dynamics of energy consumption in the country since the beginning of this century, experts claim that “almost all progress in reducing the energy intensity of GDP was made in the period of 2000-2008, when there were noticeable shifts in favor of less energy-intensive types of economic activities.”

Further changes in energy consumption cannot be attributed as sustainable: after 2008, there was an increase in energy intensity followed by a slight decrease in 2013-2015; later, the energy intensity indicators remained practically unchanged. And in the last 4 years, an increase in energy consumption was registered in all economic sectors considered in the Ministry of Economic Development report “due to a structural shift towards more energy-intensive goods and the share of energy-intensive products”.

In 2015–2018, energy consumption in the power production sector grew up by 2.5%; in the mining industry by 10.4%; in agriculture by 3.4%; in the transport sector by 9.1%; and in the housing sector by 13.9%. In general, this led to an increase in energy consumption by a total of 83 million tons of standard fuel.

Analysts note that all periods of growth in energy intensity “were characterized by a slowdown in economic growth and were accompanied by an increase in the share of energy-intensive activities in the structure of the economy.”

Summing up the results of the “energy realities” of Russia, the Ministry of Economic Development is considering four scenarios for changing the dynamics of energy consumption depending on the degree of ambitiousness of government policy measures in the field of energy conservation and energy efficiency enhancement.

According to the authors of the report, the key point in reducing energy intensity belongs to the so-called “technological factor.” “Energy efficiency can be improved through the introduction of advanced technologies, for example, combined-cycle gas turbines, combined heat and power generation plants, electrification and gasification of vehicles, the use of state-of-the-art energy-efficient building structures and heat-insulating materials, variable-speed drive units, energy-efficient lighting and lighting control systems, individual heating units with weather regulation, and modern energy consumption meters,” they believe.

According to experts of the Ministry of Economic Development, the level of technology implementation influences the course of events in the four energy scenarios. According to the first scenario (at the current rate of decline in energy consumption at the level of 2016–2018), the forecast for the reduction in energy intensity of GDP will be 21%. In the second scenario with the 2050reference point and “moderate” implementation of engineering modernization through the adoption of the best available world technologies, it is planned to reduce energy consumption by 36% by 2035. And only the fourth scenario with accelerated modernization and the use of the best technologies at a speeded-up pace will provide for reaching 46% by 2035.

Even if, with the most glowing prospects of the progress of the events, Russia manages to reach the global average energy intensity by 2035, the lag of the energy intensity of the country’s GDP from the global average will be about 28%. At present, the specific heat and electricity consumption in the housing sector in regions with similar climatic conditions is up to 3 times higher; the energy intensity of the Russian Federation GDP in 2018 exceeded the world level by 46%; it was 44% higher than the US level and 17%higher than in Canada.

Sticking to the 1.1% per year rate of decline in energy intensity set for 2007–2018, to achieve the target value of 40% would be possible only by 2043, analysts say.

Specialists of the Ministry of Economic Development, who have conducted an analysis of energy conservation and energy efficiency policies, provided best practice advice on how to improve the situation.

CONTROL SYSTEM

According to experts, the results are negatively affected by the fact that the state programs of federal executive bodies and RF constituent entities include no assessment indicators on energy saving and energy efficiency improvements. Those, according to experts, would allow to establish objective measurable goals, and therefore make them strive for the goal. “In the long term, it is desirable to consider the possibility of developing and adopting the concept of increasing energy efficiency (by consumer groups) of the Russian economy, with the account of which strategic planning documents and lower-level road maps can be developed.”

ENGINEERING REGULATION

Analysts consider it necessary to include energy efficiency requirements in industry standards and technical requirements for the construction of new buildings. It is proposed to develop standard integrated projects and recommendations to improve energy efficiency in the housing sector.

FINANCIAL INCENTIVES

According to the Ministry of Economic Development, “it is necessary to expand the number of tools to be used for attracting investment in energy efficiency measures, especially in those areas that are recognized as priority according to the criteria of economic efficiency and social effects.”

INDUSTRY INITIATIVES

Experts propose a complete transition to LED lighting at all country’s street and road facilities. “It is necessary to create an intelligent information environment for transmitting data on the amount of energy resources consumed by end users. For individual heating units with automatic weather regulation, standard mechanisms for economic support for the implementation of this measure in the residential sector should be developed and fixed at the legislative level. An effective incentive for the development of the real estate market may be the introduction of a system for establishing energy efficiency classes for residential and non-residential premises and their subsequent accounting for economic and commercial activities,”the Ministry of Economic Development believes.

The authors of the State Report once again acknowledge: “The Russian economy has significant potential for energy conservation, which could free up considerable additional amounts of fossil fuels for export, make ‘greener’ the balance of energy consumption, reduce emissions into the atmosphere, and improve the quality of life.”

Civil society representatives consider the role of government programs crucial for the national energy conservation process. Not only is the adoption of a framework in the form of laws important but also the creation of adequate conditions for financing and stimulation of the process in the budget-funded sector, industry, business and the population.

According to the estimates of the Russian Social and Ecological Union (RSEU), the expected annual energy savings under the state energy efficiency program amount to 63 billion kWh. That equals the total planned production of one of the largest nuclear power plants in Russia (Leningrad or Kursk ones, 28 billion kWh each) and the largest HHP in Surgut, Siberia (up to 39 billion kWh) for the same period. However, reduced funding for energy-saving initiatives casts doubt on these numbers.

“The momentum, i.e., support and financing of energy efficiency programs, the availability of incentives should be coming from the government. Interest and willingness to act in the regions and in the localities have long been formed among both specialists and consumers, but the support tools are lacking,” says Olga Senova, RSEU Climate Secretariat. “Initiatives in this area can become a driving force for economic growth. Energy conservation is the largest power plant, the cleanest source of energy!”