Energy security from east to west
Oleg Budargin, Vice Chairman of the World Energy Council and former CEO of Rosseti, the biggest energy networks operator in Russia, tells World Energy Focus why it is important for countries to work together in the field of energy integration
Why, in your opinion, is regional integration of energy networks important?
Today, global technological changes are happening rapidly. Twenty years ago, it was difficult to imagine how soon the financial sector, communication technologies, transport and logistic services would be integrated, and today, thanks to the development of the internet, it is not just a reality, but in some ways yesterday already. We are moving into a new technological cycle: the digital economy.
A reliable, effective and accessible electrical power supply is a strategic priority for any modern economy.
Electrification has become the basis of industrial growth for most countries, including Russia. And today, I see a lot of economic advantages in the implementation of international projects to integrate electrical grids, based on intelligent networks. Teamwork on the technologies of electric power transmission is important. This is the logical step for the next round of development of our civilisation. It is necessary, and it is important to take into account that each technological cycle erases old boundaries and creates new opportunities for integration.
What does Russia hope to get from working with other states in this direction?
One of Russia's priorities is to actively create modern infrastructure. Not just by upgrading the last century's infrastructure but also by using innovative, new approaches. It is difficult to talk about widespread adoption of innovations in the absence of available infrastructure. Transport networks and the electrical energy industry should work at a great pace with minimal losses and be available at a good price. This is already a given, perceived as an integral feature of the quality of modern life.
It is extremely important to establish effective and mutually beneficial exchanges of experience and scientific competencies collected throughout years of investigation into technological electric energy transmission. This is exactly the kind of project which is difficult to develop alone. The maximum effect can only be achieved when several partner countries are involved in the project.
We need to work together on the formation of a strategy for the future of the electric energy industry. At the heart of its first stage should be the maximum use of existing national energy systems to their full potential.
When we take into account the considerable volume of power plants, hydro and even solar and wind stations already existing in the world, many countries could significantly save on construction of their own capacities.
Can you give examples?
Take our country. Today, Russia has a generating capacity in excess of 30 gigawatts. In many ways, this has been the result of greater efficiency, the emergence of new energy consumers, and technology modernisation. We have an opportunity to direct this unclaimed capacity to other neighbor states, at least on the Eurasian continent. As you know, electric power remains one the most perishable of all goods, which has to be consumed at the time of its generation. The advantage for our partners is being able to save money. Electric energy comes at a very low price in Russia.
On average, it is about 6-7 cents per kilowatt hour. Creating integrated energy systems is much cheaper than the construction of your own generation, not to speak of additional environmental costs.
Integration, therefore, makes electric energy more accessible for consumers. Additionally, creating integrated electric network grids should allow the transfer not only of electricity, but also of information.
There is a lot of potential in this.
What other advantages are there in integration?
The country which imports electric energy receives a clean product which does not pollute the environment. Today, in many regions of the world, production of clean electric energy is developed from renewable sources - from wind and sun. There are significant volumes of generation from water resources and massive solar and wind energy projects in Russia.
A single electric network grid will allow the transfer of this clean electric energy to those regions where its production is impossible, for various reasons.
The Russian energy system is already an accumulator of large capacity because it covers several different time zones. In general, Russia's single energy system is a successful example of interregional integration, which has long proved its effectiveness. Decades of successful work have confirmed that this approach provides reliability and availability, allowing the transfer of large volumes of electric energy at long ranges.
Today, our experience in creating a single energy system, in my view, can be used to help joint efforts of national energy systems at least in the Eurasian space and potentially globally, and we are already in discussion with colleagues in China, Japan, and Europe.
The new technological cycle requires joining forces, knowledge, and resources to submit energy safely from each individual system. Joining forces to effectively use new atom energy, solar emission, biomass, and tidal power, creating effective multi-dimensional storage of electric energy. And this is all alongside joint practice in questions of energy conservation and efficiency.
Are there barriers for teamwork in different countries?
The modern energy system of any country is a rather complex and well protected mechanism which works in accordance with national standards, regulations and protocols. Its development, depending on how it was historically created, can be based on various elements such as hydropower, renewable energy sources or thermal electric power stations. At the same time, the problem of balancing consumption and production, are solved by automated control systems which are the basis of the electricity system of each country. Each of them usually has its own specific aspects.
Of course, energy bridges connecting nation networks shall comply with state standards, taking part in the relevant integrated process. They need to be consistent with existing equipment and software and ensure the required quality of electric energy (for example, within an acceptable range of deviations of voltage and frequency).
What is the best way to meet these challenges?
One solution could be the largescale integration of electric energy infrastructure, national systems, and continents' energy systems, under similar standards and rules. We have successful examples in Russia. The first DC link was built in 1980 for the export of electric energy from USSR to Finland.
What steps is Russia taking in this direction?
Today, Russia is carrying out ongoing consultations and negotiations on projects for both bilateral and multicountry energy interconnections. For example, the Large Asian Energy Ring of Russia, China, South Korea and Japan. The "North-South" project on the integration of energy systems of Russia, Georgia, Armenia, Azerbaijan and Iran with a transit to 1.5 GW of capacity is another.
Another project is with Mongolia where there are five isolated energy systems and the country needs 1GW of installed generating capacity.
There are several solutions proposed including: an electricity transmission line using Siberia's generating capacity and a hydropower plant. Russia has also suggested creating an energy bridge to minimise the environmental risks for the Baikal region.
Strategic partnerships are also actively being developed with the state electricity supply network corporation of China (SGC).
It should be noted that Russian energy policy has always focused on energy security both for its own territory and for its neighbours. We have already become a reliable supplier of hydrocarbons, and a responsible and predictable trading partner. We need to move on. Russia can extend its presence in global electric energy markets but these should be done as joint projects with our partners.
As I said, we stand on the verge of big technological changes. By 2025, global energy consumption is expected to increase by almost 30%, of which two-thirds will be accounted for the Asia-Pacific Region countries. At the same time, according to evaluations, the increase of electricity consumption will exceed the increase of primary energy resources consumption so the need for electric energy will be higher.
Russia's energy system has great potential: there is a reliable power grid which serves as a natural energy bridge between Europe and Asia. Therefore, it is extremely important to continue an active dialogue with other countries on energy integration.
Integration is more important than the national interests of any specific country. Not least because many global issues such as ecology, energy efficiency, safety, fighting poverty (one in seven people on the planet live without electricity) can be solved by integrating energy systems. Many developed countries already have the experience and knowledge to support developing countries and will see a significant increase in their electrical energy consumption. Their task is to produce more. Our task is to provide affordable, clean electric energy.
This article appears in the latest issue of World Energy Focus, the magazine of the World Energy Council, with content produced by Petroleum Economist. For more information, visit the site worldenergyfocus.org.