Energy Outlooks Must Take Demographics Into Account

29 april 2016

Demographic factors are the most natural foundation for energy consumption projections, according to the Analytical Center's experts.

Russia is currently going through another stage of strategic energy planning: the existing documents are being revised and new plans are being developed, the experts note in their energy bulletin titled Demographic Factors in Energy Strategies. One of the drivers of energy consumption is demographic factors and specifically changes in the population and its composition. International organizations note that Russia is facing a risk of population decline, but the strategic documents produced in Russia project energy consumption growth of 17%. When developing strategic documents on Russian energy sector development, it is vitally important to take into account population trends and the way they impact on the fuel and energy sector, experts believe.

The experts note that most long-term energy consumption forecast cite China and India as key drivers of global demand for energy resources. A defining role there is played by their huge and fast growing populations as well as the urbanization processes both countries are going through. Demographic forecasts used in energy consumption projections, including those for China and India, are taken from the baseline scenario of the UN demographic forecasts and when other scenarios from that forecast are used, projected energy consumption changes significantly. There is a lot of uncertainty with regards to demographic trends in both countries, and that uncertainty has to be taken into account when planning Russia’s oil, natural gas and electric power exports, the experts point out.

In the meantime, Russia’s draft energy policy through 2035 emphasizes the role of emerging markets in the global economy and regards the Asia-Pacific region as an important importer of Russian energy resources and an important source of diversification for Russia’s exports. The plan is not only to expand cooperation with China on oil and natural gas but to begin selling electricity there, experts note. China is already Russia’s largest foreign trade partner. India is not doing much trade with Russia yet, but it is expected that trade between the two countries will enhance.

For more see the bulletin Demographic Factors in Energy Strategies

For other issues of the energy bulletin see the Publications section.