Energy and the economy in Russia

Abstract

This chapter provides an overview of the Russian energy sector and its role in the Russian economy, also in the context of energy transition. Russia, ranking fourth in the world in primary energy consumption and in carbon dioxide emissions, adheres to the strategy of "business as usual" and relies on fossil fuels. Decarbonization of the energy sector is not yet on the agenda; a skeptical attitude to the problem of global climate change prevails among stakeholders. GDP energy intensity remains high, supported by relatively low energy prices and high cost of capital. The share of solar and wind energy in the energy balance is insignificant and is not expected to exceed 1% by 2035. The challenge for Russia in the coming years is to develop a new strategy for the development of its energy sector, which enters the zone of high turbulence-even in the absence of the influence of the climate change agenda-due to COVID-19, increasing global competition, growing technological isolation and financial constraints.