Energy efficiency – a new energy resource for Russia?

Investing in energy efficiency is an economically rational choice for Russia. By investing in energy efficiency Russia will be able to meet supply needs at approximately one third of the cost of building new production capacity. Moreover, if all of the oil, gas and oil products that could be saved by realising Russia’s energy efficiency potential were exported, Russia would obtain additional revenues of 80–90 billion USD every year. For example, Russia has a potential to reduce its natural gas consumption by 240 billion cubic meters, which would largely exceed the volume of Russian gas exports in 2005–2008.

Reducing the energy intensity of Russian economy will create positive environmental effects by reducing greenhouse gas emissions. Realising its full energy efficiency potential would help Russia to achieve the goals of Kyoto Protocol because its greenhouse gas emission would stay well below the 1990 threshold level until 2050, even in the case of strong economic growth.

Improving Russia’s energy efficiency will be beneficial for the EU as well. First of all, if Russia invests in energy efficiency, it will increase the likelihood that Russia will be able to satisfy the EU’s natural gas demand in the future. Second, energy efficiency and energy saving can open opportunities for the EU-Russia energy cooperation. Third, global sustainable development, that the EU also greatly emphasises, requires actions from all countries, including Russia. Investing in energy efficiency is an important step towards it.

Russia’s need to improve its energy efficiency can create business opportunities for Finnish companies. In Russia there is demand for expertise, technologies, and equipment in the field of energy efficiency, which Finnish companies have, and collaborating and networking can benefit both sides.

Although the first steps towards realising Russia’s energy efficiency potential were taken when the Russian leadership acknowledged the importance of energy saving and incorporated it into the country’s energy strategy, the real challenge is still ahead – to implement energy-saving measures effectively. Furthermore, the majority of Russians still remain unaware of the benefits of energy saving, and a real transition to energy efficient economy will require embedding the energy-saving attitudes in the whole Russian society.

Read the full report here.