Analytical Center experts have released a new energy bulleting titled Prospects of Co-Generation, in which they look at the development of co-generation and coal production in Eastern Russia and the prospects of exports to Asia-Pacific.
According to the analysts, historically co-generation was introduced at scale during the central planning period as a way to improve energy efficiency; now co-generation is growing in Asia and is being promoted in the EU. The decline in heat and electricity consumption following changes in the structure of the economy limited the prospects of co-generation in Russia. Its further development is linked to the modernization of big power plants (where this is profitable) and construction of small co-generation plants making use of a variety of energy sources.
As for the Russian coal industry, it is expanding coal production and exports capacity, specifically targeting the Asia-Pacific region, the experts note. "The high quality of our coal gives us an edge in the Asian markets. In the meantime, the development of our coal industry is being made more difficult by the efforts of the global financial institutions to prevent climate change and ensure countries adhere to their obligations under the 2015 Paris climate agreement. Nevertheless, demand for coal keeps rising because coal can compete very successfully on price, especially in Asia," the analysts write in their bulletin.
The experts note that energy consumption in the Ukrainian economy has stabilized at a relatively low level, one fifth below what it was consuming in 2013. The shift towards nuclear power and coal was something Ukraine had to do because foreign policy factors made reliance on natural gas unfeasible, the analysts believe. In 2013-2017, consumption of natural gas by the Ukrainian industry fell by 11 billion cubic meters and consumption by Ukrainian households fell by 9 billion cubic meters. The continued rise of domestic natural gas prices and attempts to create a natural gas market based on the EU model with a per capita GDP of just $2,600 have become a difficult factor in the country's domestic political situation and could potentially move the point of equilibrium in the energy sector even lower.
For more information see the Prospects of Co-Generation bulletin.
For the other energy bulletins see Publications.