Russia, by far, is the largest producer of gas in the world. The country has commonly relied on coal and natural gas for its growing energy demand. However, because of this, Russia is labeled as the third largest greenhouse gas emitter in the world as one-fourth of the emissions come from energy generation. Not only that, but in 2010 the EBRD stated that Russia uses over seven times as much energy per GDP unit than any other Western European economy, and that if the country does not take up energy efficiency measures, in less than 22 years, it could find itself exhausting its oil reserves. In 2009, plans were put into action to create 22,000 MW of renewable energy generation projects by the year 2020 in an effort to reduce the reliance on natural coal and gas. Although not typically looked at as a leader in the cleantech industry, Russia is making large strides to put itself on the cleantech map.
1) High Potential to Create Sources of Renewable Energy. Although Russia is technically seen as being ahead in the thrust toward renewable energy sources use, the outlook is starting to reform into a new one that has Russia promoting solar energy, water power, wind energy, biofuels, and geothermal power. Russia’s natural environment provides a great location for making potential sources of renewable energy. There are many acres of vegetation to be used for the creation of biofuel, geothermal energy potential in the east, and even solar capabilities. “Russia is a big country with various climatic conditions…A lot of Russia’s regions has favorable conditions for efficient use of biomass energy gained from waste timber conversion and agricultural waste conversion, etc. The energy of small rivers also has good prospects. In summer we could use the energy of sun while during colder months wind could provide for the necessary energy.”
2) In April 2008, Bellona Murmansk and the Bellona Foundation established the Northwest Russia Renewable Energy Forum as a permanent arena for dialog, cooperation and problem-solving in developing and implementing renewable energy in Northwest Russia. Bellona conducts regular seminars and meetings for diverse stakeholders to discuss the possibilities, obstacles and mechanisms related to development of the region’s clean, sustainable energy sources and to work towards implementation of renewable energy. The purpose of the forum is to stimulate information exchange, research, development, investment, implementation and commercialization of renewable energy resources in the region. Bellona is convinced that by pooling the resources from research, business and industry, government and NGOs it is possible to achieve environmentally sustainable development of the renewable energy resources in the region and attract investors.
3) Russian Renewable Energy Program. At the end of 2010, the World Ban announced the beginning of a $165 million Greenfield program of investment and consulting within the renewable energy sector of Russia. Set up by the World Bank’s International Finance Corporation, the Russian Energy Agency, and the Global Environment Facility, the Russian Renewable Energy Program works alongside the government in an effort to assist current projects in the field of renewable energy and increase access to financing for the projects. A majority of the investment will be used on biomass and wind projects. It is a five year program that is estimated to install 205 MW of renewable generation capacity and reduce CO2 emissions by 5 million tons annually.
4) Federal Support to Regional Cleantech Programs. The current Russian President, Dmitry Medvedev made clear the high priority of energy efficiency throughout Russia. At the end of 2010, Medvedev elected to invest a minimum of $300 billion to decrease the quantity of energy spent by 40 percent by the year 2020. These efforts are estimated to save the population and companies $35 billion on energy annually.
5) EU – Russia Energy Technology Center. The EU – Russia Energy Technology Center, headed in Moscow, and serves as a location of contact between European and Russian companies active in various energy fields, including coal, electricity, hydrocarbons, energy efficiency and renewable energy. It center also assists in the facilitation of cooperation as well as technology transfer between the EU and Russia.
6) Russia – United States Collaboration on Energy Efficiency and Technology Programs. At the beginning of 2011, a Protocol of Intent was signed between the Russian Energy Agency and the United States International Development Agency to increase collaboration on clean energy, “smart grid” technology” and energy efficiency. The agreement requires a promotion of partnerships between American and Russian utilities and regulators for the purpose of information dissemination. A partnership with the United States could be extremely beneficial, as the World Bank Group reports that a realization by Russia of the total potential for energy efficiency could save the country more than $80 billion annually.
7) GEF Investment to Increase Urban Housing Energy Efficiency. At the end of end of 2010, the Global Environment Facility CEO endorsed a $9.6 million dollar plan to develop the energy efficiency of Russian residences. This is part of a larger $722 million five year project implemented by the International Finance Corporation and the European Bank for Reconstruction and Development. The goal of the project is to enhance energy efficiency within homes and address legislative, technical, and financial issues (which are barriers to the development of energy efficiency in Russia). According to Peter Hobson, senior banker with ERBD, the grant provided by GEF will play a vital role in technical assistance support for improving the living conditions of millions of Russian citizens.
8 ) Opening of General Electric’s Kaluga Energy Technology Center. Nearing the end of 2010, General Electric (GE) celebrated the opting of the Energy Technology Center in Russia. The center will service and manufacture power generation equipment throughout the country, assisting customers in keeping their plants energy efficient. “The opening of GE’s Energy Technology Center in Kaluga is a significant example of a successful partnership between Russia and foreign business in the high-tech arena and will create additional employment opportunities in the region,” said Governor Anatoly Dmitrievich Artamonov. “We are glad to support GE Energy in its contribution to one of Russia’s most important priorities—to increase energy efficiency in the power generation sector. The center will provide innovative services and products designed to meet the needs of the customers.
9) Norwegian – Russian Chamber of Congress Works on Energy Efficiency Project. Russia has realized that cross-border cooperation is required to exchange information on energy efficiency. Therefore, the Norwegian – Russian Chamber of Commerce created an initiative to create a new project that would bring energy efficiency technologies from Norway to Russia. Also brought by Norway is competence in modern energy efficient technologies, something Russia requires to remove the technological gap.
10) Energy Efficiency in Northwest Russia. In April 1996, a Collaboration Arrangement on Energy Efficiency was signed between Norway and the Russian Federation. NEEG – The Norwegian Energy Efficiency Group, was commissioned to prepare and implement various activities under this arrangement, through the bilateral project “Energy Efficiency in Northwest Russia”. Currently there are 5 energy efficiency centers located in Northwest Russia they include: Kola, Murmansk, Arkhangelsk, Karella, and Komi Republic.
Article by Shawn Lesser, president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at email@example.com