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Economic 360 for Russia: Growth Prospects and Emerging Opportunities in the Energy Industry
Frost & Sullivan, Feb 2011, Pages: 111
Russia shows immense promise in the development of the energy industry. The Russian economy is on a rebound from the latest global crisis. The various reforms launched by the Government aim at improving business climate, regulations and strengthening cooperation with developed countries to diversify and modernize petroleum based production. Russia is an energy superpower with large untapped potential of oil, gas, coal and, renewable energy resources and is one of the largest producers and exporters of oil, gas and coal. Renewable energy and nuclear energy are also dominant in the energy mix. Oil refining, clean technologies and services related to energy infrastructure are noteworthy opportunities.
Research Overview
Russia is one of the most promising markets in the world and has grown dynamically mostly due to its rich natural resources. It possesses vast resources of minerals, ferrous and non-ferrous metals and the world’s largest deposits of oil and gas. In 2009, it had oil reserves of 74.20 billion barrels and gas reserves of 44.4 trillion cubic meters. The country exports approximately 70.0 per cent of its oil production and 30.0 per cent of its gas production, making it the largest gas exporter and the second-largest oil exporter in the world. The energy industry is gradually reviving after the economic downturn of 2009 but is not expected to grow rapidly due to its maturity. Most of the growth prospects reside in the emerging and untapped renewable market. Russia’s vast land mass presents exciting opportunities for the installation of various types of renewable energy power plants including wind farms, hydro, biomass and geothermal. In 2009, the Government announced a planned increase in the share of renewable energy generation from less than 1.0 per cent to 4.5 per cent by 2020. Russia possesses installed capacities of 9.8 megawatt of solar power, 19.5 megawatt of wind power, 90.1 megawatt of geothermal, 683.3 megawatt of small hydro power and 1,316.5 megawatt of biomass power. The country accounted for 0.7 per cent of the global renewable energy production in 2008. The renewable energy market can create many growth opportunities in fields such as research (clean technologies, solar materials, solar cell properties, cell efficiency), raw materials (polysilicon for solar modules) and components as well as complete systems manufacturing, hybrid systems, solar panels, wind turbines and biomass-fired steam boilers. Russia has already built ten nuclear power plants and intends to double its nuclear energy production by 2020.
The Russian energy policy is completely independent as the country is not a member of the Organization of Petroleum Exporting Countries (OPEC) and therefore, instead of limiting its domestic oil and gas production, the country’s Federal Target Programmes are looking to increase it. At the same time, the Russian Government is underling the necessity of modernising the petroleum-based economy and implementing reforms such as the liberalisation of the electricity market (from 2008, energy can be purchased at the wholesale market). Overall, the country aims to increase its energy production and share in the global exports, because it is Russia’s primary source of revenues. These funds can be later used to modernise the economy, which, in turn, will compel the development of advanced, energy-saving technologies and nuclear as well as renewable energy power plants. The other areas of opportunity are the modernisation of obsolete equipment and infrastructure (pipes, grids and power plants). The growing popularity of liquefied natural gas (LNG) is also spawning a need for special transmission lines and adjusted equipment.
Frost & Sullivan’s Energy Country Industry Forecast service provides vital inputs for evaluating the attractiveness of a country and its energy industry. Apart from enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.
Benefits
The following benefits are offered by this research:
Identifying New Market Opportunities
The future trends and developments in the Russian energy industry have been identified by taking into consideration the economic environment of the country. The analysis will prove greatly informative to industry participants and those with stakes in the energy industry in Russia.
Comprehend Future Industry Trends
This research service gives an insight into economic developments and the trends in the energy industry of Russia. The industry and infrastructure developments will offer greater awareness of the dynamics of the market in the forecast period.
Understand the Policy and Economic Environment
An analysis of the dynamics of the economic growth in Russia provides considerable data into the economic parameters that will influence the energy industry in the country. The industry performance is closely related to the level of economic growth. The structural dynamics of the economy are revealed to provide invaluable insights to industry participants.
Evaluate Industry Segment Potential
This research service focuses on providing an analysis of country and industry trends and informs companies seeking to enter new geographic markets. The market and economic insights will also prove invaluable to corporate planners in the development of accurate business plans or while allocating resources.
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