Detailed Description of Best Practices - Russian Federation No.2

There is a number of Governmental Acts and decisions regulating the related activities at the federal basis. Among these acts it is possible to mention:

Scenarios of GHG emissions in the Russian Federation will depend on various political and economic circumstances (see Figure 2).

Energy provides dominant contribution in the total GHG emission in the Russian Federation, therefore potential and perspectives of our participation in international cooperation and projects will be mostly determined by potential of CO2 and methane emission reduction in energy sector. We mean, first of all, increase in natural gas use in total energy balance and increase in consumption efficiency of fuel and energy resources.

Federal Program "Energy Saving in Russia" (1998-2005)

Total value of energy saving potential in Russia as a whole (determined as possible reduction of energy use obtained by economically reasonable energy saving measures) was estimated as 460-540 Mt.c.e. (i.e. annual fuel use may be reduced to 2010 by about 500 Mt.c.e; estimation on the basis of "Energy Strategy of the Russian Federation"). In general these values are currently valid. The lower value means use only domestic technologies, the higher estimate reflects additional and wide use of better foreign technologies. About one third of this potential (150-180 Mt.c.e.) is allocated in Fuel Energy Complex, one third in industry, including: 7-8% contribution of metallurgy and 4-5% contribution of construction materials industry. Utilities can give about 100 Mt.c.e. (20%), agriculture 30 Mt.c.e., and transport 45-50 Mt.c.e.

It is planned that practical implementation of the potential will be made through, first of all, Federal Program "Energy saving in Russia" (1998-2005). Evidently that it will be one of the main framework of activity in near future. The Program was developed by Ministry of Fuel and Energy (with participation of Ministry of Economy and some other agencies), according to the Decision of the Government adopted in January, 1998.

Climate effects are not of course the main goal of the Program. Main goals are energy saving - transformation and modernization of energy in accordance with new technologies, creation of market mechanisms, including economic, financial and regulation. Additional and very important social and economic goal is solution of subsidiary problem and related regulation of tariffs.

The Program has two stages: 1998-2000 and 2001-2005. The first stage deals mainly with control and acounting systems and energy saving equipment. Investments for implementation of energy saving technologies and equipment are planned for this stage. Financial mechanisms and regulation basis also should be established at the stage on federal and regional levels. The second stage will cover wide energy saving, establishing of energy market and wide implementation of R&D results obtained at the first stage. The main parameters of the Program are presented in Table 4.

Table 4. Parameters of the Federal Program "Energy Saving in Russia" (1998-2005).

1998-2005 I stage
1998-2000 II stage
2001-2005 At the year
2005

Energy saving, M t.c.e. 365-435* 53-69 312-366 88-102

Reduce in energy intensity in comparison with 1995 13.4%

Total investments, billion $ 9.22** 2.5 6.72

Cost of saved fuel (prices of 1995), billion $ 24.3-28.0

Economic efficiency of the Program 2.6-3.0***

Estimated CO2 emission reduction, Mt CO2 **** 700-900 100-150 600-750 150-200

* Here and below ranges reflect different versions of Program implementation

** Exchange course of the beginning of 1998 (6 Russian Rubles = 1 US$).

*** Ratio: cost of saved fuel divided by total investments.

**** Detail emission reduction estimates are absent in the Program.Our estimations are based on fuel consumption structure and the following values: saving of 1 t.c.e of natural gas = 1.6 t of CO2 emission reduction, 1 t.c.e mazut = 2.25 tCO2, 1 t.c.e. coal = 2.8 tCO2.

The program covers all types of energy saving. Total budget as large as about 9 billion $, including 7.8 billion $ for capital investments and more that 1 billion $ for R&D. However only 3% from the Federal budget, 20% from regional budgets and regional funds of energy saving. The main sources are commercial credits (30%), means of energy enterprises and market instruments.

Total energy saving is fuel saving of up to 430 Mt.c.e. in 8 years (1998-2005). Payback period is usually very short - 1.5-2 years. Additional benefits are solution of subsidiary problems and reduce of some gas and power tariffs by 8-13%.

1. Saving in fuel-energy complex (power stations, gas and energy distribution systems, etc.) - 2.8 billion $.
2. Utilities (district heating, heat and energy supply of end consumers) - 2.8 billion $.
3. Measures in industry - 1.5 billion $
4. Development and promotion of energy saving equipment - 1.1 billion $.
5 Special activity for implementation of energy, gas and heat meters - 1 billion $.

On the first stage (1998-2000) just 5th subprogram - wide implementation of meters and accounting systems is anticipated as very beneficial. There are additional large ecological effect (reduce of atmospheric pollution and water use), potential prevented damage is estimated as 6 billion $.

It is necessary to notice that adopted Energy Saving Program has not dogmatic character. The Program will be changed gradually, in relation with changes in economic and political situation.

There is also a number of other Federal Programs related to Addressing Climate Change activities and among them:

"Prevention of Dangerous Climate Changes and Their Negative Consequences"
"National Technological Base"
"Safety of Population Related to Risks of Natural and Technogenic Catastrophic Events"
"Ecologically Clean Technologies and Transport"
"Ecologically Clean Processes in Chemical Industry"
"Waste Management"
"Russian Forests" and others.

There is a practice in the Russian Federation to implement municipal programs on energy efficiency improvements in district heating systems and water supply systems. For example, the Moscow Center for Energy Efficiency (independent non-profitable organization) developed such programs for 8 Russian towns: Dzerzhinsk, Zheleznogorsk, Zhukovsky, Zelenodolsk, Kostroma, Lytkarino, Murmansk, Chelyabinsk, Orel. Each of the programs includes four sections: boilers, heating networks, enterprises and office buildings, dwelling buildings. In the frame of the Federal Program "National Technological Base" there are under development new types of technologies for energy efficient buildings.

OAO "Gazprom" (Russian huge gas company) implements a number of programs related to improvements in gas transportation systems, loses of natural gas and methane leakages.

The Russian Methane Center (Kemerovo) provides support for coalbed methane projects in Russia.

A number of projects have been implemented and are planned to be implemented regarding the waste management, including:

The Russian National Pollution Abatement Facility (State Committee for Environmental Protection) developed a portfolio of projects in addressing climate change for a number of economic sectors, including oil and gas industry, metallurgy, coal mining industry, etc.

The Ministry of Sciences and Technologies of the Russian Federation provides an information base on results of scientific and technological research works in the Russian Federation, which includes descriptions of hundreds new technological projects practically in all economic sectors.

I. Title of the Best Practice

Law Regulations, Federal Programs and Project Avtivities

II. Overview of the Best Practice