Russia's strategy for coping with the transformation of the global energy sector

17 april 2018

"Despite numerous attempts to make careful calculations and precise projections, the level of uncertainty that we are seeing in the global energy sector today means that countries are unable to make informed decisions and rational choices, especially when it comes to long term planning," said Analytical Center expert Alexander Kurdin, speaking at the conference Transformation of the Global Energy Sector: New Approaches.

According to Mr. Kurdin, state policy has to be formulated on the basis of conceptual trends, i.e. general ideas about what the energy sector of the future is going to look like and how we will be able to integrate with it.

The changes happening in the global energy sector today include first of all a trend towards a lower share of fossil fuels in the energy balance of many countries as well as a significant increase in energy efficiency; these are sustained trends happening on a massive scale, according to the expert. At the same time, these changes can hardly be called unprecedented and the pace of these trends depends to a large extent on market factors.

Speaking of what options energy exporting countries have when it comes to state policy given the technological shifts in the fuel and energy sector, Mr. Kurdin identified 4 types of strategies depending, first, on how fast the traditional resources are being depleted and what policies the state pursues with regards to traditional fuel and energy companies and second, on the pace at which new energy technologies are being introduced. He called these groups of strategies Inertia, Monetization, Adaptation and Transformation. At the moment the best option for Russia, according to the expert, is Adaptation.

Photo: From open sources