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Low energy efficiency hinders economic growth in Russia

November 22, 2013, 13:24 UTC+3 Low energy efficiency hinders economic growth in Russia ¶ ¶ The Russian government's long-term plans to reduce energy consumption have appeared to be unrealizable
Experts note that the worst situation is in the industrial sector
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November 22. /ITAR-TASS/.The Russian government's long-term plans to reduce energy consumption have appeared to be non-realizable, the Nezavisimaya Gazeta states.

Russian Energy Minister Alexander Novak said at the second international forum on energy efficiency on Thursday that with the present economic situation remaining in Russia, GDP energy consumption by 2020 may be reduced by 22%, but not 40% as was planned by the state energy saving and energy efficiency program for the period to 2020, the daily cites the minister as saying.

Experts note the failure to implement the plan will have a negative effect on budget revenues and economic growth in Russia in the future.

According to Novak, the worst situation is in the industrial and particularly utilities sectors.

The objective to improve energy efficiency is a priority of Russia's authorities in economy. In June 2008, Dmitry Medvedev, who was Russian president at the time, signed a decree on measures to improve energy and ecology efficiency of Russian economy, setting down that energy consumption of the Russian GDP should be reduced at least 40% by 2020 as compared to 2007.

In the view of analysts cited by the Nezavisimaya Gazeta, it is advantageous for Russia's authorities to improve energy efficiency with the aim to maintain the growth of raw material exports. An analyst at the Investcafe agency, Timur Nigmatullin, notes production of hydrocarbons in Russia has reached its peak and is unlikely to increase more than one-two percent in the near future.

At the same time, oil and gas revenues at present form about 50% of the revenues of the federal budget, which still is deficit-ridden. With the low energy efficiency, domestic goods and services become less competitive, since their cost rises."It is not a secret that many goods in Russia are of lower quality than in Europe and the United States," the expert notes. "If their price rises, the demand falls sharply, as they lose their main competitive advantage. Therefore, it is necessary to improve energy efficiency in order to come out of the present economic situation with its slow growth," the expert concludes.

An analyst of the Alpari company, Anna Kokoreva, believes construction of new electric power plants and their technological renovation will allow improving energy efficiency of economy.

AForex financial company analyst Narek Avakyan notes that "to switch to a qualitatively new level of energy efficiency, innovative technologies must be introduced to lower the electric power production cost.


Itar-Tass is not responsible for the material quoted in these press reviews.

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