efficiency need to be include in investment andproduction programmes of energy suppliersand of government-regulated organizations.Minimum fuel efficiency requirements for newpower stations should be included ininvestment contracts: the minimum level forgas-fired stations should be raised to 60% by2015–2020, and the minimum for new coalfiredstations should be 48%. The share of<strong>Russia</strong>n heat output supplied by fuel-firedpower stations should rise to 44% in 2006–2010and 51% in 2020, while losses in electricity gridsshould be reduced to 7-8%.Government tariff policy in the past fewyears has helped to promote energy efficiency,but there is still room for improvement ofpricing processes to stimulate energy saving,and introduction of a carbon tax or a tax onharmful emissions is worth considering.Anticipated tariffs in 2010 will raise the ‘market’share in energy efficiency potential to 70%, andfuture introduction of heavy penalties foremissions or of a carbon tax could raise theshare to 92%. Energy tariffs should increasetogether with the ability of consumers to pay,and this ratio should be set in a way thatencourages energy efficiency. There needs tobe improvement of forecasting procedures forestimating future energy balances, takingaccount of expected outcomes of energysaving activities, as well as improvement ofmodeling of energy markets and relationshipsbetween market players. Tariff plans shouldoffer economic motivation for raising of energyefficiency.Long-term tariff regulation parametersshould enable inclusion of mandatory energysaving activities and actions for increasingenergy efficiency of consumers in investmentbudgets, as well as allowing governmentregulatedconsumers to use the savings achievedby their energy saving activities over a period ofat least five years.It is important to assess possibility andadvisability of introducing increased emissiontaxes and a carbon tax. Funds raised from suchtaxes and from sales of GHG emission quotas,including those received as ‘green investments’could be used to finance government actionsfor increasing energy and environmentalefficiency.A part of energy suppliers’ investmentprogrammes should be supported throughbuying out of inefficient energy capacity andextra energy from consumers. The situation wherethe main task of the energy supplier is to sell asmuch energy as possible needs to be replaced bya situation where the main goal is to provideessential energy services (comfort, lighting,transport, etc.). Such a system could use so-called‘white certificates’, proving certain energy savingachievements and based on existing practicessuch as the emissions market or the ‘greencertificate’ system, which are used in an increasingnumber of countries. Buying of electric capacityfrom inefficient consumers (which use it duringpeak periods for lighting or electrical heating)would cost only USD 20-60 per KW, whileconstruction of new generating capacity wouldtheoretically cost USD 700-1,500 per KW, but, inactual <strong>Russia</strong>n conditions, would cost USD 2,000-4,500 per KW, i.e. a hundred times more.It is important to improve the energysupply system to remote regions. Althoughdiesel power stations in remote areas producerelatively small quantities of electricity, this isthe most expensive energy in the world andsignificant budget subsidies have to be spenton it. A programme of modernization andintegration of diesel power stations withrenewable energy sources is highly importantfor minimizing budget expenditures at all levelsand ensuring a sustainable, effective andreliable energy supply.5.10. Energy efficiencyin <strong>Russia</strong>n transport networksTransport was in second place afterindustry by increase of energy consumption in2000–2007. The share of privately ownedautomobiles in total passenger transport hassharply increased, which has greatly reduced100 National Human Development <strong>Report</strong> in the <strong>Russia</strong>n Federation 2009
energy efficiency of the transport system. Sometransport companies, including JSC <strong>Russia</strong>nRailways, are implementing energy savingtechnologies. But unit energy costs in manytransport sectors grew in 2000–2007. This wastrue for pipeline transport of oil & oil products,electric traction on railroads, subway trains,streetcars, trolley buses, as well as dieseltraction. Achievement of national energytargets will require significant reduction ofenergy intensity in the transport segment.<strong>Russia</strong> could reduce energyconsumption in the transportation segment by55 million tonnes of fuel equivalent,representing 28% of all energy consumed bytransport in 2005, through the following steps:improvement of the database and datacollection methods for energy consumption bytransport; integrated planning of transportoperations; improving the quality of publictransport services and providing betteropportunities for multimodal public transport(i.e. combining private and public transportwithin a single trip); introduction of a tax onpurchase of private cars with large engines;providing incentives to drivers who buyenergy-efficient vehicles; further strengtheningof efficiency standards for fuel and emissions;introduction of fuel efficiency markings forautomobiles; encouraging changes in behavior;introduction of utilization schemes for oldvehicles; more rapid renewal of the vehicles on<strong>Russia</strong>n roads through financial stimulation forutilization of old automobiles; anddevelopment of energy saving technologies.5.11. Summaryand recommendations<strong>Russia</strong> is a world leader in reducingenergy intensity of GDP, but still remains one ofthe most energy-inefficient countries.Reduction of energy intensity was mostlycaused by structural factors and thetechnological gap with developed countriesremains. This gap cannot be allowed to remainFigure 5.10Comparison of specific fuel consumptionby new gasoline-fired passenger automobilessold in 2006-2007<strong>Russia</strong>CroatiaSwedenHungaryFinlandEstoniaGermanySlovakiaNetherlandsGreat BritainGreeceIrelandSpainDenmarkNorwayCzech RepublicFranceItalyPortugal0.0 5.0 10.0 15.0Liters/100 kmHybrid or SMART car Consumption up to 7 liters/100 km Consumption above 7 liters/100 kmSource: ODYSSEE database for all countries, except <strong>Russia</strong>. <strong>Russia</strong>n dataprovided by CENEfindefinitely if <strong>Russia</strong> means to approach thelevels of prosperity of developed countries in acontext of increasing global competition anddepletion of resources, which could maintainthe country’s orientation to resource exports.The only way forward, therefore, is via adramatic increase in productivity, includingenergy efficiency.Potential for energy efficiencyimprovements in <strong>Russia</strong> is greater than in almostany other country in the world, amounting to45% of all energy consumption. This potential isthe main energy resource for future economicgrowth. However, until now the federalgovernment has been sluggish in promotingenergy saving activity, failing to encourage bestuse of this resource.<strong>Russia</strong>’s goals for increasing energyefficiency of the national economy are: toreduce GDP energy intensity by 40% in 2020compared with the level in 2007; and to achieveenergy savings of around 1000 million tonnesof conditional fuel. These are realistic goals, butthey require development and implementationof a wide range of energy saving measures,including:101
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National Human Development Reportin
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National Human Development Reportin
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ACKNOWLEDGEMENTSThe authors express
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Dear Reader,You have before you the
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PREFACEThis is the 13 th National H
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country’s fuel & energy regions r
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environmental degradation and enhan
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Chapter 1The Energy Sector,the Econ
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By 2008 Russia had increased its sh
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the share of energy in the national
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exported, increased. However, this
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elimination of structural and terri
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• Establishment of competitive me
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number of developed countries, incl
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Although the United Nations Climate
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industrial region of the Urals - Sv
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2.2. Budget capacityand structure o
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(the Federal State Statistics Servi
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Immigration by young and highly ski
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energy regions exacerbate the incom
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Khanty-Mansi and Yamal-Nenets Auton
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the Ministry for Regional Developme
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various other long-term problems in
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is also associated with the fuel an
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Republic of Mordovia 8051 0.732 68.
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Canada, the USA and Great Britain h
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Box 8.2. Energy efficiencyindicator
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Box 8.4. Energy efficiency rating o
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41 Penza Region 116.0 -35.2 -4.542
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Appendix to Chapter 1Table 1.1. GDP
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Attachment to Chapter 4Table 4.1Rus
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Attachment to Chapter 4Volga Federa
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Attachment to Chapter 4Belovo Belov
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The previous National Human Develop