INVESTMENT PORTAL
OF RUSSIAN REGIONS
0%
LOADING DATA
The Development of Natural Gas Demand in the Russian Electricity and Heat Sectors

Research

OPEN PDF

The Development of Natural Gas Demand in the Russian Electricity and Heat Sectors

Release date: 10 September 2018

Topics:

Oil and Gas

Power generation

Natural gas supplies to Russia’s domestic market are about twice the size of supplies to its export markets. Most of the gas supplied to the domestic market is used for electricity and heat production, which account for about 50 per cent of domestic natural gas consumption — more than 200 bcm annually. Natural gas demand in this sector is highly influenced by the economic situation in the country, fuel pricing policy, and energy policy and regulation. While the economic situation shapes electricity demand (as most of this demand comes from industrial consumers), natural gas demand for electricity production is subject to inter-fuel competition between coal and natural gas, and inter-technology competition between nuclear and gas power plants. The latter is affected by capacity support mechanisms.

Heat demand in Russia is declining due to the implementation of the Law on Energy Efficiency, which obliged consumers to assess energy efficiency and install heat metering systems. The implementation of the Heat Reform, which came into force in July 2017, included heat tariffs which should incentivize consumers to use heat more efficiently. The reform also aims to increase heat production efficiency and gradually renovate obsolete heat supply systems.

Inter-fuel competition between natural gas and coal will remain at its current level, meaning a prevalence of natural gas in the western and central parts of Russia, and a dominance of coal in Southern Siberia. Although coal prices are low and unregulated, power and heat produced using coal becomes high-cost due to delivery costs from coal production areas, operational costs related to coal storage, and the capital costs of coal power plant technology.


Based on an overall analysis of the sectors, the Oxford Institute experts suggest that natural gas demand for the power and heat sectors is not likely to change considerably from its current level. In the most probable scenarios, power demand for gas should increase by 24 bcm, while the decrease in gas demand for heating purposes in the conservative scenario will be a little above 20 bcm. Therefore, the increase in gas demand from the electricity sector will be compensated by a decrease in demand from the heat sector.


All analytics

Analytics on the topic

All analytical materials
Digital management of commercial property

11 September 2020

Digital management of commercial property

In this publication, Redmadrobot studies the current state of the commercial property market, analyzes main trends, and reviews technologies in the sector. The work can help adjust property management models and adapt business...
READ
“We need trust between industry leaders for the successful development of the energy industry”

17 June 2020

“We need trust between industry leaders for the successful development of the energy industry”

Shortly before the conference ‘COVID-19: Accelerating a better energy future for all’, which is set to take place on 17 June as part of a series of online events under the brand of the 25th World Energy Congress, Rossetti CEO...
READ
COVID-19 Dichotomies. In what direction will the virus change the economy and society?

2 April 2020

COVID-19 Dichotomies. In what direction will the virus change the economy and society?

The coronavirus changes our lives in many ways. But what will happen when the pandemic is over? Will everything go back to how it was before? It is not very likely. Below, we collect 7+1 topics where lasting...
READ
 Digital energy. How smart meters will contribute to changing the energy landscape?

30 October 2020

Digital energy. How smart meters will contribute to changing the energy landscape?

Consulting firm Arthur D. Little has prepared a study on the implementation of smart metering in the electricity market in the EU.
READ