ENERGY STRATEGY of RUSSIA

06.71.
03
ENERGY STRATEGY
ofRUSSIA
FOR THE PERIOD
UP TO 2030
moscow
2010
Ministry ofEnergy ofthe Russian Federation
ENERGY STRATEGY ofRUSSIA

FOR THE PERIOD UP TO 2030
APPROVED
by Decree N1715-r ofthe Government
of the Russian Federation
dated 13 November 2009
Moscow 2010
(622.323+622.324+622.33+621.311) 2030 (470)

31
65
Energy Strategy ofRussia for the period upto2030 //
App. to the public and business magazine Energy Policy.
M.: Institute ofEnergy Strategy, 2010. 172 p.
Energy Strategy ofRussia for the period upto2030 (ES-2030) approved by decree
N1715-r ofthe Government ofthe Russian Federation dated 13November 2009.
The Strategy provides increase in the time horizon for strategic planning ofthe Russian
energy sector until 2030 in accordance with new objectives and priorities ofthe country.
The Strategy includes the following:
the current results ofthe Energy Strategy ofRussia for the period upto2020 realization and goods and objectives ofthe Strategy;
the main trends and forecasts ofthe country socio-economic development, and
ofthe interaction between the economy and energy sector;
the prospects ofdemand for Russias energy;
the main provisions ofthe state energy policy and its most important elements;
the development prospects ofthe Russian fuel and energy complex;
the expected results and implementation system ofthe Strategy.
The Strategy focuses on the principles, strategic guidelines, the main components and
mechanisms ofthe state energy policy implementation.
The quantitative parameters ofthe economy and energy development are subject to
verification during the implementation ofthe measures specified by the Strategy.
The publication is intended for energy companies, research, consulting and educational
organizations, state legislative and executive authorities, awide range ofexperts in the
field ofenergy and the economy ofthe Russian Federation.
ISBN 978-5-98420-054-7
Institute ofEnergy Strategy, 2010

"PAC Energiya", 2010
EDITORS
Formation oflong-term energy policy began with the first steps ofthe
new Russia as an independent state. Energy Policy Concept ofRussia
in the New Economic Condition was approved by the resolution (N26
ofSeptember 10, 1992) ofthe Government ofthe Russian Federation. In
May 1995 Major directions ofEnergy Strategy ofRussia for the period
upto2010 were approved by the edict (N472 ofMay 7, 1995) ofthe
President ofRussia and in the same year Major provisions ofthe Energy Strategy ofRussia for the period upto2010 were adopted by the
resolution (N1006 ofOctober 13, 1995) ofthe Government ofthe Russian Federation.
Realizing the necessity ofregular monitoring ofthe Strategy implementation and its periodic correction the Ministry ofFuel and Energy
in 1998 decided to establish anew structure State Institute ofEnergy
Strategy (IES) as acoordinator for complex analysis and long-term forecast ofthe fuel and energy complex development in connection with
the trends ofthe socio-economic development ofthe country.
Yet in 2000, the Government ofthe RF (by the resolution N39 ofNovember 23, 2000) approved new version ofMajor provisions ofEnergy
Strategy ofRussia for the period upto2020 that was prepared by the
interdepartmental working group under IES and by the Council ofExperts under the Ministry ofFuel and Energy. And in 2003 the Energy
Strategy ofRussia for the period upto2020 was approved.
During the implementation ofthe Energy Strategy ofRussia
upto2020 it was confirmed the following that its most important provisions are adequate to the real process ofdevelopment in the energy sector ofthe country even in face ofabrupt changes ofexternal and internal factors that determine the basic parameters ofoperation ofthe fuel
and energy complex ofRussia. At the same time the necessary changes
are supposed to be implemented in that strategy at least once in five
years.
This work began in advance. In accordance with the Decree ofthe
Ministry ofIndustry and Energy dated 21.12.2006, N413 On arefinement ofthe Energy Strategy ofRussia for the period upto2020 and its
prolongation upto2030 13 interdepartmental working groups were
ENERGY STRATEGY OF RUSSIA for the period up to 2030
founded. They were composed ofleading Russian scientists and specialists.

The updated list ofworking groups includes:
Evaluation ofpromising relationship in the system economy
energy and development ofrecommendations on priorities
and target guidelines for the development ofdomestic energy
markets (the head G.O.Kuranov, Director ofthe Department
ofMacroeconomic Forecasting, the Ministry ofEconomic
Development);
Assessment ofglobal processes in the energy sector, the prospects
for external demand for Russian energy supplies and development
ofrecommendations on regional and industry guidelines oflongterm national energy policy (the head L.M. Grigoriev, the
President ofthe Institute ofEnergy and Finance);
Formation and an forecasted evaluation ofdevelopment scenarios
for Russias energy sector, long-term energy balances and the
formulation ofrecommendations on regional and industry
guidelines oflong-term national energy policy (the head
A..Makarov, Director ofthe Institute ofEnergy Research, RAS,
Academician ofRAS);
Analysis ofproblems, objectives and mechanisms ofstate
regulation in the energy sector and the formation ofa road map
ofimportant measures ofthe long-term national energy policy
(the head V.V. Bushuev, general director ofthe Institute
ofEnergy Strategy, professor);
Development ofa consolidated plan road map ofinnovative
development ofthe fuel and energy sector and the transition to
aclean energy future (the head V.E. Fortov, director ofthe
Institute ofHigh Energy Densities ofRAS, academician ofRAS);
Determination oflong-term strategic priorities and major policy
measures to develop raw material base ofRussias energy sector
(the head D.G.Khramov, director ofthe Department ofPublic
Policy and regulation in the field ofgeology and mineral resources
ofthe Ministry ofNature);
Determination oflong-term strategic priorities and major
policy development activities ofthe oil complex (the head
A.E.Kontorovich, scientific director ofthe Institute ofPetroleum
Geology and Geophysics SB RAS, Academician ofRAS);
Determination oflong-term strategic priorities and major
policy measures to develop the gas industry (the head
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A.N.Dmitrievsky, director ofthe Institute ofOil and Gas Problems

RAS, Academician ofRAS);
measures to develop the coal industry (head A.B.Kovalchuk,
general director ofthe Institute ofCoal Market Research,
Professor);
Definition oflong-term strategic priorities and major policy measures
to develop the electric energy industry (the head E.P. Volkov,
director ofthe Krjijanovskys ERDI, Academician ofRAS);
measures to develop heat supply (the head V.A. Stennikov,
deputy director ofthe Institute ofEnergy Systems SB RAS);
Development ofproposals for an economically viable management
ofthe capacity ofRussian industries for the development ofthe
fuel and energy complex and potential for the development
ofindustries (the head V.V. Semenov, director ofits basic
Industries Department at the Ministry ofIndustry and Trade);
Editorial Group (the head Deputy Minister ofEnergy
A.B.Yanovsky).
In 20072008 working groups in close collaboration with the Institute ofEnergy Strategy prepared concepts and proposals for individual sections ofa project ofthe Energy Strategy ofRussia for the period
upto2030.
The project ofthe Energy Strategy ofRussia upto2030 was prepared on the basis ofthese materials by specialists ofthe drafting group
(U.L.Baron, V.V.Bushuev, A.I.Gromov), under the overall supervision
ofthe Deputy Energy Minister A.B.Yanovsky in 2008.
Throughout 2008 the Ministry ofEnergy conducted hearings and
public debate on the project ofthe document on the grounds ofthe
State Duma and Federation Council, the Chamber ofCommerce and
the Russian Union ofIndustrialists and Entrepreneurs, the Institute
ofEnergy Strategy and other developers ofES-2030 with the assistance
ofthe wide range ofprofessionals and public figures.
In 2009, under the leadership ofMinister ofEnergy S.I.Shmatko the
project ofthe Energy Strategy for the period upto2030 was finalized
with due account ofthe influence ofthe global economic crisis in late
2008. The procedure ofapproval ofthe project with interested federal

executive authorities and organizations was reflected.
On August 27 the project ofthe Energy Strategy ofRussia for the
period upto2030 was approved the Government ofthe Russian Federation (Minutes N27 of27.08.2009), and on November 13, 2009, the
Energy Strategy ofRussia for the period upto2030 was approved by
Decree N1715-r ofthe Government ofthe Russian Federation.
The Governments determination to adopt abasic strategic document for the development ofthe key sector ofRussian economy in crisis
and the high uncertainty ofthe external economic environment shows
that the country is changing not only the attitude but also the approach
to strategic planning.
First, the emerging philosophy is that strategy and outlook are
not the same. In fact, the strategy sets acourse oflong-term development ofthe energy sector, independent from the wide-field predictions
oflong-term changes in external and internal conditions. The Strategy
does not come from the adaptation ofthe Russian energy sector to external conditions, but from the target model ofits future development,
that is based on astable (invariant) system ofphased target indicators
ofdevelopment.
Secondly, the experience ofthe Energy Strategy ofRussia for the
period upto2020 showed that during the period ofits implementation
and crucial changes in the external parameters ofthe Russian energy
sector world oil price has rose from US$27 to 94/barrel, thats more than
4 times higher then the forecasted indicators, the parameters ofthe energy sector changed only by 57%.
Moreover, the crisis of20082009 put back most ofthe parameters
ofthe energy sector to the estimations ofEnergy Strategy ofRussia
for the period upto2020, that indicated high stability and persistence
ofproduction parameters on asufficiently large time range offuel and
energy complex with respect to the volatility ofexternal environment,
as well as sufficient justification offorecasts ofthe energy sector development, carried out in the document.
Thus, the Russian energy sector holds asufficiently high potential
for internal resistance and inertia, which enable to form astrategic
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course ofits development on the basis oftarget guidelines, rather than

on constantly changing forecasts ofexternal and internal conditions.
In this regard, it should be emphasized that the formation ofa new
Energy Strategy is arequirement oftime and anecessary condition
for strategic planning in energy, suggesting the prolongation ofthe Energy Strategy every five years to maximize the incorporation ofthe new
trends in the economy and energy, new technologies and challenges
ofthe development ofthe energy sector ofthe country.
Should also be said afew words about the status ofthe Strategy as
adocument. Strategy is not adocument ofdirect action, it is adocument for documents. It cant and should not replace the programs (master plans for development ofindividual industries and regions, investment programs ofindividual industries and energy companies). It sets
the priorities and guidelines to be consistent with them.
The above mentioned concepts create an urgent necessity for the
adoption ofthe Energy Strategy right now under the conditions ofcrisis, since the right time and correctly chosen way ofstrategic development ofthe countrys energy sector will not only improve its state, but
also enable to influence the external conditions ofthe energy sector development, construct anew energy future, based on the targets ofenergy development, rather than volatile forecasts.
The publication below is an official document approved by the
Government ofthe Russian Federation November 13, 2009 (Decree
N1715-r).
GOVERNMENT ofTHE RUSSIAN FEDERATION

D ecree
N1715-r 13 November 2009
MOSCOW
1. To approve the attached Energy Strategy ofRussia for the period upto2030
(hereinafter the Strategy).
2. The Ministry ofEnergy, Ministry ofEconomic Development ofRussia, Ministry
ofNatural Resources and the State Atomic Energy Corporation Rosatom to ensure
implementation ofactivities specifies by the Strategy, and annually, within the I quarter,
submit areport to the Government ofthe Russian Federation.
3. The Ministry ofEconomic Development and Ministry ofEnergy in preparing an action
plan to implement the main activities ofthe Government ofthe Russian Federation for
the corresponding period to include in this plan the activities specifies by the Strategy.
4. To recommend to the executive authorities ofthe constituent entities ofthe Russian
Federation within their competence in the formation ofregional development programs
to incorporate measures for the implementation ofactivities specifies by the Strategy.
5. To declare null and void:
the decree N1234-r ofthe Government ofthe Russian Federation dated 28 August 2003
(Collected Legislation ofthe Russian Federation, 2003, N36, art. 3531), paragraph 2
ofthe decree N799-r ofthe Government ofthe Russian Federation dated 15 June 2009
(Collected Legislation ofthe Russian Federation, 2009, N25, art. 3111).
Prime Minister ofthe Russian Federation

8
Vladimir Putin
APPROVED
by Decree N1715-r
of the Government
of the Russian Federation
dated 13 November 2009
Energy strategy ofRussia

for the period upto2030
I. Introduction
The objective ofthe energy policy ofRussia is to maximize the effective use ofnatural energy resources and the potential ofthe energy
sector to sustain economic growth, improve the quality oflife ofthe
population and promote strengthening offoreign economic positions
ofthe country.
The Strategy determines objectives and goals ofthe Russian energy
sector long-term development for the up-coming period, its priorities
and guidelines, as well as mechanisms ofthe state energy policy at the
implementation phases ofthe Strategy ensuring realization ofthe stated objectives.
While implementing the Energy Strategy ofRussia for the period
upto2020, approved by Decree N 1234-r ofthe Government ofthe
Russian Federation dated 28 August 2003, the validity ofmost ofits key
provisions was confirmed by the actual development ofthe countrys
energy sector even under conditions ofabrupt changes offoreign and
domestic factors determining the main operating parameters ofthe
Russian fuel and energy complex. In the Energy Strategy ofRussia for
the period upto2020 was also specified that the document should be
amended where necessary at least once in 5 years.
The Strategy extends the time period upto2030 with new goals and
priorities for the country development.
The Strategy sets new guidelines for the development ofthe energy
sector in the transition ofRussian economy to the innovative path ofdevelopment specified in the Conception ofLong-Term Socio-Economic
Development ofthe Russian Federation upto2020 approved by Decree
N 1662-r ofthe Government ofthe Russian Federation dated 17 November 2008 (hereinafter referred to as the Conception).
The provisions ofthe Strategy shall be used when developing and
adjusting programs for socio-economic development and energy strategies, as well as programs for the constituent territories ofthe Russian
Federation, and integrated programs for energy developing regions in
the Eastern Siberia, Far East, North-West Region ofRussia, Yamal Peninsula, and continental shelf ofthe Russian Federation. They shall also
be used when developing and adjusting master plans for development
ofindividual industries ofthe fuel and energy complex, geological exploration ofthe regions, and when developing and adjusting investment
programs and major projects ofenergy companies.
The Strategy is based on the experience derived from the implementation ofthe Energy Strategy ofRussia for the period upto2020 and
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on an analysis ofthe current trends and the new system challenges to

energy development. The Strategy takes into account possible fluctuations in foreign and domestic conditions ofeconomic development in
Russia. Nevertheless, the key objectives and long-term quality guidelines for the transition ofthe countrys economy to the innovative path
ofdevelopment are specified as invariables despite the possible consequences ofthe global economic crisis that started in 2008. The very
same requirements are imposed on the key objectives and long-term
quality guidelines ofthe Strategy.
The Strategy includes:
current results ofthe Energy Strategy ofRussia for the period
upto2020 implementation and the purpose ofthe Strategy;
main trends and forecasts ofthe socio-economic development
ofthe country, and ofthe interaction between economy and
energy;
prospects ofdemand for Russias energy;
main provisions ofthe state energy policy and its most important
elements;
development prospects ofthe Russian fuel and energy complex;
expected results and implementation system ofthe Strategy.
The quantitative parameters ofthe economy and energy development are subject to verification during the implementation ofthe measures specified by the Strategy.
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II. Current results ofthe Energy

Strategy ofRussia
for the period upto2020 implementation,
objectives and goals ofthe Strategy
The following main vectors oflong-term development ofthe fuel and
energy complex were specified in the Energy Strategy ofRussia for the
period upto2020:
transition to the path ofinnovative and energy-efficient
development;
change in the structure and scale ofenergy production;
development ofcompetitive market environment;
integration into the world energy system.
Development ofthe energy market infrastructure (market mechanisms, institutions for open trade in energy carriers, energy transport
infrastructure) is one ofthe main priorities. The program for increasing
gas prices and the mechanisms to minimize the socio-economic impact
ofthe overall growth ofenergy prices are ofparticular importance.
Support and promotion ofstrategic initiatives in the energy sector form
the basis for the implementation ofmajor energy projects in the future.
Most ofthe guidelines stated in the Energy Strategy ofRussia for the
period upto2020 have been implemented in practice with the use ofall
the mechanisms provided for by the state energy policy. In particular,
the electric energy industry has been reformed. The electricity market
is being liberalized and the nuclear energy industry is being reformed.
amore favorable tax treatment has been set up for the oil and gas industries. The development ofoil refineries and petrochemical plants is being promoted, while an energy exchange trade is being developed and
excessive administrative barriers hindering energy companies are being removed. Infrastructure projects crucial to the development ofthe
domestic energy sector are being implemented actively.
Nevertheless, the qualitative results projected for the first phase
ofthe Energy Strategy ofRussia for the period upto2020 implementation have not been fully achieved, namely the setting up abase for
stable and progressive development ofthe energy sector, including:
stablishing acoherent and approved legal and regulatory
framework, creating highly competitive energy markets with fair
trade principles;
completing the conversion ofthe related sectors ofthe economy
to anew level ofenergy efficiency;
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transition from the leading role ofthe fuel and energy complex
in the economy ofthe country to the function ofan effective and
stable supplier ofenergy resources for the needs ofthe countrys
economy and population.
Given the principle ofcontinuity, it is necessary to ensure that the
qualitative results specified in the the Energy Strategy ofRussia for
the period upto2020 should be achieved in the frames ofthe Strategy
implementation.
During the period that has passed from the beginning ofthe Energy
Strategy ofRussia for the period upto2020 implementation, the Russian energy sector was primarily developing within the main forecasting trends specified in the stated document despite significant deviations ofthe basic economic indicators ofthe country development and
foreign economic conditions from their values projected in 2003.
Thus, when world oil prices grew from US $27/barrel in 2000 to
US$94/barrel in 2008, thats almost afourfold deviation from the forecast ofthe Energy Strategy ofRussia for the period upto2020, the actual
export volume ofenergy resources for the same period grew 1.6times,
thats only a9.6% deviation from the export forecast indicated in the
Energy Strategy ofRussia for the period upto2020.
As the gross domestic product ofthe country grew by 65% compared
to its 2000 level with adeviation of11% from the forecast ofthe Energy
Strategy ofRussia for the period upto2020, actual growth in production ofenergy resources amounted to 26% compared to its 2000 level
with adeviation of2.6% from its forecast in the Energy Strategy ofRussia for the period upto2020.
Meanwhile, domestic consumption ofenergy resources grew by 10%
compared to its 2000 level with adeviation of5% from the forecast ofthe
Energy Strategy ofRussia for the period upto2020 mainly due to the
decrease in demand in 2008 on account ofthe world economic crisis.
The key development indicators ofthe Russian economy and fuel
and energy complex in 2008 and estimations ofthe Energy Strategy
ofRussia for the period upto2020 are indicated in Appendix 1. On the
whole, the indicated figures show stability and high inertance ofthe
manufacturing parameters ofthe fuel and energy complex against
changes in external conditions. They also point to the validity ofthe
forecasts ofthe energy sector development specified in the Energy
Strategy ofRussia for the period upto2020.
The objectives ofthe Strategy are identified by the main internal
and external challenges for the forthcoming long-term period.
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The main domestic challenge lies in the necessity for the energy
sector to fulfill its vital role in the transition to an innovative path
ofeconomic development as provided for by the Conception. The domestic demand for energy resources should be guaranteed taking into
account the following requirements:
Russias living standards must correspond with those
ofdeveloped countries;
Russia must achieve scientific and technological leadership in
various key areas ensuring its competitive advantage and its
national (including energy) security;
the country economic structures must be changed in favor
ofless energy-intensive sectors;
the country must switch from raw materials export to resource
innovative-development with qualitative renewal ofthe energy
sector (including development offuel and non-fuel energy both)
and related industries;
the country should decrease the share ofthe fuel and energy
complex in the total volume ofinvestments in its economy and
also increase the absolute levels ofinvestments in the energy
sector necessary for the development and rapid modernization
ofthe sector and growth ofits activities;
Russia must improve its energy efficiency and reduce energy
intensity ofits economy to the level ofcountries with similar
climatic conditions such as Canada and the Scandinavian
countries;
gradual limitation ofthe fuel and energy complex impact on
the environment and climate by reducing pollutant emissions,
wastewater discharge, greenhouse gases emissions as well as
reducing energy production and consumption waste.
The energy sector must contribute to the reproduction ofhuman
capital (by developing energy infrastructure and providing energy
goods and services at socially affordable prices, sustainably training
highly-qualified personnel and increasing quality oflife ofthe population, including those working in the energy and related sectors), as
well as facilitate the transition to anew model ofspatial development
based on the balanced development ofenergy and transport infrastructure.
The main external challenge lies in the necessity to overcome the
threats associated with the instability ofworld energy markets and
volatility ofworld energy prices, as well as to ensure the contribution
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ofthe energy sector into improvement offoreign economic activities

and to reinforcement ofRussias positions in the world economic system. Thereby, the following must be provided:
achievement ofsustainable results offoreign economic activities
in the fuel and energy complex under conditions ofincreased
global competition for resources and sales markets;
minimization ofthe negative impact ofthe global economic crisis
and use ofthe crisis to radically update and diversify economic
structures in favor ofless energy-intensive industries, and to
promote transition ofthe Russian energy sector to an accelerated
innovative development path and new technological ways;
increase in Russias strategic presence on high technology
markets and energy intellectual services, including by developing
globally specialized production;
geographic and product diversification ofthe Russian energy
export under conditions ofstable and increasing energy supplies
to the worlds largest consumers;
reasonable reduction in the share offuel and energy resources
in the structure ofRussian export, switching from selling abroad
raw materials and energy resources to selling highly processed
products, as well as promotion ofsales ofoil products produced
at foreign refineries owned by Russian oil companies;
development ofinternational energy infrastructure hubs in
Russia on the basis ofnew energy technologies.
Need for an adequate response to the major internal and external
challenges oflong-term development along with existing problems in
the energy sector provide for the objectives and goals ofthe Strategy.
The relevant risks are to be reflected in the system ofstrategic priorities and guidelines, as well as in the process ofphased implementation
ofthe Strategy.
The main objective ofthe Strategy is to set up innovative and efficient energy sector in Russia meeting the energy needs ofa growing
economy, as well as the foreign economic interests ofthe country and
ensuring the necessary contribution to the countrys social-oriented
and innovative development.
Achievement ofthis objective requires successive solving ofthe following basic goals:
improvement ofthe efficiency ofreproduction, extraction and
processing ofenergy resources to meet domestic and external
demand for them;
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modernization and construction ofa new energy infrastructure

on the basis oflarge-scale technological updating ofthe countrys
energy sector;
establishment ofa stable institutional environment within the
energy sector;
improvement ofthe energy and environmental efficiency ofthe
Russian economy and energy sector, including through structural
changes and activization oftechnological energy saving;
further integration ofthe Russian energy sector into the world
energy system.

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III. Major trends and projections

ofsocio-economic development in Russia
Despite impact ofthe global economic crisis, achievement ofthe
long-term guidelines for socio-economic development ofRussia and
adequate development ofthe energy sector are still based on the fundamental provisions ofthe scenario ofinnovative development ofthe
economy, specified in the Conception.
The scenario ofbasic innovative development presupposes, in addition to using the competitive edge ofthe Russian economy in traditional
sectors and new knowledge-intensive sectors, as well as in the economy
ofknowledge, abreakthrough in improving human capital effectiveness, developing high or medium technological industries and transition ofinnovative factors into the main source ofeconomic growth.
Implementing this basic innovative scenario would ensure that living standards and the level ofsocio-economic development in Russia
be on par with those ofdeveloped post-industrial countries due to improved competitiveness ofthe domestic economy, structural diversification and growth ofits efficiency. At the same time, the gap between
Russia and advanced countries in terms ofliving standards would be
considerably decreased.
The economic development under this basic innovative scenario is
characterized by full-scale realization ofthe following priorities:
development and implementation ofthe Russian economys
comparative advantages in the energy sector, science and
education, high technologies, and other fields;
dynamic development ofinstitutions determining entrepreneurial
and investment activities, as well as companies competitiveness;
intensive innovative modernization ofthe manufacturing industry
and enhancement oflabor productivity;
dynamic development oftransport and energy infrastructure;
intensive improvement in the quality ofhuman capital and
formation ofa middle class;
integration ofthe Euro-Asian economic area.
Additionally, provisions are made for changes in the specific path
to innovation-based development and achieving long-term goals, particularly in view ofthe global economic crisis that started in 2008 and
its likely duration.
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When forecasting the basic predictions in the Strategy (hereinafter

referred to as the basic forecasting field), the following consolidated
forecast hypotheses for socio-economic development were used.
Hypothesis I. By the end ofthe first implementation phase ofthe
Strategy and the beginning ofthe post-crisis period (approximately
20132015), the country will develop socially and economically at the
rates specified in the Conception.
Hypothesis II. By the end ofthe second implementation phase ofthe
Strategy (approximately 20202022) the level ofthe countrys socioeconomic development specified in the Conception will be reached
thanks to accelerated development in the post-crisis period.
The interaction system between the economy and energy sector is
characterized, firstly, by the conversion ofthe forecast hypotheses for
socio-economic development into the basic forecasting field for the
energy sector development, and secondly, by establishing hypotheses
ofguidelines for the prospective system ofinteraction between the
economy and energy sector.
The basic forecasting field is used to determine the priorities and
guidelines for long-term development ofthe energy sector in all the
areas indicated in the Strategy. The specific development paths ofthe
energy sector are assessed and elaborated in the process ofadvanced
monitoring ofthe Strategy (depending on the implementation ofits
targets and external conditions). Possible deviations ofthe stated development paths beyond the basic forecasting field are factored in, in
the first place, by adjusting the dates and the parameters for individual
implementation phases ofthe Strategy (while maintaining their quality
content). This mechanism protects against existing risks by allowing
adjustment ofthe paths and deadlines for achieving the specified strategic guidelines based on the invariance ofthe main strategic objectives.
It follows that the Strategy does not define specific paths, but amodel for phased long-term development ofthe energy sector taking into
account the existing risks. What is ofparamount importance is not so
much predicting the changing risks as the willingness to overcome
them.
The main hypotheses ofthe guidelines for the communication and
interaction system between the economy and energy sector for the period upto2030 are characterized in the following manner.
During the period ofthe Strategy implementation, the Russian
economy will decrease its reliance on the energy sector thanks to the
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priority development ofinnovative low-energy intensive sectors and

implementation ofthe technological potential ofenergy-saving. This
reliance will be further decreased for the period upto2030 (compared
with 2005 levels):
the share ofthe fuel and energy complex in the gross domestic
product and the share offuel and energy resources in export
should be decreased by no less than 1.7 times;
the share ofthe energy export in the gross domestic product
should be decreased by no less than 3 times;
the share ofinvestments in the fuel and energy complex as
apercentage ofthe gross domestic product should be decreased
by no less than 1.4 times, and their share in the total volume
ofinvestments by more than twice;
the energy intensity ofthe gross domestic product should be
decreased by more than twice;
the electricity intensity ofthe gross domestic product should be
decreased by no less than 1.6 times.
During the period ofvalidity ofthe Strategy the Russian energy sector will retain its determinant role in important strategic tasks solution
regarding the countrys development. In the first place, this touches
upon the construction ofnew energy infrastructure allowing for an accelerated socio-economic development ofthe Eastern Siberia and Far
East, as well as overcoming ofthe infrastructure disconnection ofseveral Russian regions and formation ofnew spatial-industrial clusters
based on the development ofenergy-supplying and manufacturing industries.
The decreased dependence ofthe economy on the energy sector will
be accompanied by aqualitative change in the role ofthe fuel and energy complex in Russia. As the largest customer for many related industries (engineering, metallurgy, chemistry, etc.) and the economy (construction, transport), the Russian energy sector will make asignificant
contribution to the investment support for the innovative development
ofthe domestic economy.
The Russian energy sector will continue influencing the countrys
social situation insofar as the level ofenergy comfort and access to energy resources largely determine the quality oflife ofthe population.
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IV. Prospects ofdemand for Russian

energy resources
1. Promotion ofthe demand for fuel and energy
on the domestic market
The domestic demand for energy resources is determined by the expected dynamics ofeconomic development, changes in the structure
ofthe countrys economy and its level ofspecific energy intensity.
Decreasing energy intensity ofthe economy is the main objective
ofthe Russian energy policy. Without solving this issue, the energy sector will inevitably impede the countrys socio-economic development.
The solution ofthis problem requires, among other things, arational
restructuring ofthe Russian economy.
The Conception provides for large-scale structural reforms in the
economy both in terms ofthe gross domestic product in general and in
terms ofthe manufacturing sector. Low energy consuming industrial
sectors specializing in high technology and science-intensive production are expected to develop by advanced rates in response to market
demand. At the same time, the energy and raw material intensive industries will grow more slowly. This should result in astructural transformation ofthe Russian economy in favor ofless energy-intensive sectors.
The country will thus have anew source ofeconomic growth more powerful than oil and gas sector based on the manufacturing sector and high
technology services, which are substantially less energy-intensive.
By 2030 the share oflow energy-intensive industries (engineering,
light industry, food industry, etc.) in the industrial production structure is expected to be increased by 1.51.6 times and should amount to
more than half ofthe total volume ofindustrial production in the country compared to the current 33%.
Along with the expected structural changes in the economy, the
implementation oforganizational and technological measures to save
fuel and energy have also been provided for. In other words, an energy
saving policy will be implemented. As aresult ofthe structural changes
in the economy and the energy saving policy, by 2030 the energy and
electricity intensity ofthe Russian economy should be considerably decreased and should have an adequate impact on the dynamics ofdomestic demand for primary energy and electricity.
The estimated figures ofdomestic demand for fuel and energy resources are indicated in Appendix 1 to the Strategy.
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2. Russia on world energy markets

Russia is among the world leading countries in the system ofworld
circulation ofenergy resources. Russia actively trades these resources
and takes part in international cooperation in this field.
Russias position is especially important on the world hydrocarbon
market.
In the past years, Russia hold leading positions in terms ofcrude
oil production and provided 12% ofthe world oil trade. Over four-fifths
ofRussian oil is exported to Europe and Russias share on the European
markets amounts to around 30%. Russian oil products are also mainly
exported to the European countries.
Russia is the world leading country in terms ofreserves (23% ofthe
world reserves) and annual production ofnatural gas. The country provides 25% ofthe world trade in natural gas, dominating both on the European gas market and on the gas market ofthe Commonwealth ofIndependent States. Russian gas accounts for approximately 30% ofthe
overall gas consumption in the European countries (including Turkey,
but excluding the countries ofthe Commonwealth ofIndependent
States). With aunique gas transportation system, Russia also plays an
important role in supplying gas from Central Asia to Europe and to the
countries ofthe Commonwealth ofIndependent States.
Russia holds the second place in terms ofcoal reserves in the world
(19% ofthe world reserves), the fifth place in terms ofannual production
(5% ofthe world production) and also accounts for approximately 12%
ofthe world thermal coal trade.
Russian nuclear electric energy industry represents 5% ofthe world
nuclear energy market, 15% ofthe world nuclear reactors market, 45%
ofthe world uranium enrichment market, and 15% ofthe world market
ofspent fuel conversion. Russia also provides 8% ofthe world production ofnatural uranium.
Peculiarities ofthe forthcoming period ofthe world energy markets
development are associated with the processes oftheir restructuring,
growth in the share ofdeveloping countries, and intensification ofcompetition. Recently, the degree ofuncertainty and risks has significantly
increased on world markets, including in connection with abrupt and
unpredictable dynamics ofoil prices, negative impact ofthe world financial crisis, the threats ofenergy supply shortages in the post-crisis
period, multiple-valued prospects for concluding international agreements on environmental policy and climate change. On the other hand,
the efforts to improve long-term stability ofthe energy markets and
21
global energy security are increasingly understood and supported in

the world, and this stability and security must be provided without prejudice to any national interests whatsoever. This trend was reflected, in
particular, in the decisions and recommendations adopted at the St. Petersburg G8 Summit in 2006.
The stated factors with due regard to the Russian external energy
policy will determine Russias future position on the world energy markets.
Russia will undeniably remain the leading player on the world hydrocarbon market and will actively participate in the development
ofelectricity and coal markets, while strengthening its position in world
nuclear electric energy industry.
In this case, maintenance ofRussias stable relations with its traditional consumers ofenergy resources and development ofequally stable relations on new energy markets will be one ofthe key principles.
Alongside with export ofprimary energy, ahigh emphasis will be
put on export ofhighly processed energy products, as well as on developing the production thereof by Russian fuel and energy companies
abroad. The highly competitive world markets ofoil and gas chemistry
will be ofparticular interest for Russia in the future.
Although at present Russia is practically not represented on the
world renewable energy market, the country will develop this promising sector (taking into account the structure and features ofthe national
energy sector development). The potential ofrenewable energy in the
country, the scientific and technical achievements in this area along
with development ofinternational cooperation will be the basis ofRussias stage-by-stage increased contribution to the development ofthis
market.
Within the period upto2030, export ofenergy resources will remain the major development factor for the Russian economy, but its impact on the economy will decrease. Growth rates ofthe energy export
will gradually slow down and its volume is expected to stabilize by the
end ofthe period.
This trend is consistent with the state long-term economic policy,
which focuses on diversifying the economic structure and decreasing
the countrys dependence on energy export.
The estimated figures for the Russian energy export are indicated in
Appendix 1 to the Strategy.
The energy markets in Europe and the countries ofthe Commonwealth ofIndependent States will remain the main sales markets for the
22
products ofthe Russian fuel and energy complex for the entire implementation period ofthe Strategy. Measures will therefore be implemented to reduce transit risks, including further development and improvement offull-scale export infrastructure to ensure reliable supplies
ofRussian energy to these markets.
At the same time, the proportion ofEuropean energy markets in the
total volume ofRussian energy export will steadily decline due to export diversification to Eastern energy markets (China, Japan, Republic
ofKorea, other countries ofthe Asia-Pacific region). Moreover, by the
end ofthe Strategy third implementation phase, the proportion ofEastern energy markets in the Russian energy export ofliquid hydrocarbons (oil and oil products) should grow from the current 6 to 2225%,
while natural gas export should grow from 0 to 1920%.
The Strategy also provides for adiversification ofcommodities
structure ofenergy export on account ofincreased export ofenergy
products with high added value (oil products, liquefied natural gas, engine fuel, production ofgas chemistry and petrochemistry, electricity).
Russia will thus not only retain its position as the largest energy supplier in the world, but will also qualitatively change its presence on the
world energy market by diversifying its commodities structure and destinations ofenergy export, actively developing new international energy business and increasing the presence ofRussian companies abroad.
This will make it possible to reduce the dependency ofthe Russian energy sector on export ofenergy resources to Europe, as well as increase
profitability and efficiency ofthe international business ofRussian energy companies without substantially increasing export ofprimary energy.
23
V. State energy policy

1. Principles ofthe state energy policy
and its implementation phases
The long-term state energy policy aims to protect the rights and legal interests ofcitizens and business entities, ensure state defense and
security, effectively manage state property, and achieve anew qualitative state for the energy sector. The policy is implemented taking into
account the following unalterable principles:
consistency ofthe state measures in implementing key strategic
guidelines for development ofthe energy sector;
interest in setting up strong and stably developing energy
companies representing Russia on foreign markets with dignity
and contributing to the successful functioning ofcompetitive
domestic markets;
relevance and predictability ofstate regulations aimed at private
initiative stimulation in implementing state energy policy,
including investments.
The main strategic guidelines ofthe long-term state energy policy
are as follows:
energy security;
energy efficiency ofthe economy;
budget efficiency ofthe energy sector;
environmental safety ofthe energy sector.
The main components ofthe state energy policy are as follows:
subsoil use and management ofthe state subsoil fund;
development ofdomestic energy markets;
promotion ofa rational energy balance;
regional energy policy;
innovative and scientific-and-technical policy in the energy
sector;
social policy in the energy sector;
foreign energy policy.
The main mechanisms ofthe state energy policy are as follows:
creating afavorable economic environment for the operation
ofthe fuel and energy complex (including coordinated tariff, tax,
customs, antimonopoly regulations and institutional reforms in
the fuel and energy complex);
24
introducing asystem ofadvanced technical regulations,

national standards and norms improving and stimulating the
implementation ofkey priorities and guidelines for energy
development, including improving the energy efficiency ofthe
economy;
stimulating and supporting business entities strategic initiatives
in investment, innovation, energy-saving, environmental and
other priority areas;
improving the management efficiency ofstate property in the
fuel and energy complex.
The state energy policy will be implemented in 3 phases to ensure:
consistent progress towards achieving the objectives and goals
ofthe Strategy;
coordination ofthe state energy policy with the socio-economic
development ofthe country as awhole;
taking into account the qualitative differences in external and
internal development conditions and parameters ofthe energy
sector, as well as ofthe nature and measures ofthe state energy
policy at different phases ofits implementation.
First phase consists in overcoming the crisis and establishing the
foundations ofa new economy. Accordingly, the main task is to quickly
overcome the crisis in the economy and the energy sector in order to
achieve sustainable economic and energy development rates specified
in the Conception, and to use the opportunities that arose during the
crisis for qualitative renewal and modernization ofthe Russian fuel and
energy complex.
The main risks ofthe first phase lie in apossible heavier impact
ofthe crisis than was expected, its larger duration, insufficient rate and
efficiency ofthe improvements in the fuel and energy complex, which
are expected to create the basis for sustainable post-crisis development
by the end ofthis phase.
The first phase should therefore create the necessary conditions and
remove the major barriers (both domestically and in collaboration with
foreign partners) to ensure that all main components ofthe state energy
policy are promoted speedily. At the same time, it is necessary to adjust
and synchronize the development plans and programs for the energy
sector with the measures specified in the Conception (taking into account the likely adjustment ofdeadlines and their implementation parameters as aresult ofthe global economic crisis).
25
Basic production assets and infrastructure ofthe energy sector will

be developed and updated during this period (including, completing
the most important projects previously launched). The territories and
regions, where it is necessary to ensure rapid development ofenergy infrastructure and change the negative trends in the development ofenergy resource base will be selected, while basic market institutions,
astable and effective regulatory framework and astate regulation system will also be put into place for the energy sector.
At this phase, the Russian fuel and energy complex will actively contribute to quick overcoming ofthe crisis and subsequent rapid innovative development ofthe related industries (manufacturing, pipe industry, etc.) by placing orders for the materials and equipment necessary
for the energy sector.
The external conditions for the development ofthe Russian energy
sector during this phase will first be the impact ofthe global economic crisis, and then the likely post-crisis growth ofthe world economy.
As aresult the first phase will be characterized by the instability and
unpredictability ofthe world financial, stock exchange and energy
markets. Under these conditions, the role ofthe state participation in
the development ofthe countrys energy sector will increase, including in the provision ofthe necessary resources for the construction and
modernization ofthe energy infrastructure, granting ofstate guarantees to businesses for the implementation oflong-term priority investment projects, and in supporting ofthe financial and economic stability
ofstrategic energy companies.
The first phase should end approximately in 20132015 depending
on the extent ofthe crisis and the speed ofrecovery in the economy and
the energy sector.
Second phase consists in atransition to innovative development and
construction ofthe infrastructure ofa new economy. Accordingly, the second phase will be highlighted by the common increase in energy efficiency
in the fuel and energy complex and in the economy as awhole as aresult
ofmodernization ofproduction assets, related regulatory and institutional
reforms, realization ofinnovative and new capital-intensive energy projects in the Eastern Siberia and Far East, on the continental shelf ofthe Arctic seas and Yamal peninsula, implemented during the first phase.
The main risks ofthe second phase lie in the possibility ofRussias energy sector lagging behind the rapid post-crisis development ofadvanced
countries and not meeting by the end ofthe phase the necessary conditions leading to atransition to the innovative energy sector ofthe future.
26
At this phase, the fuel and energy complex should be entirely innovatively updated on account ofdomestic technologies, materials and
equipment obtained as aresult ofthe active interaction between the
fuel and energy complex and related industries at the first phase, as
well as through international cooperation.
The external conditions for the development ofthe Russian energy sector during this phase will be stabilization ofthe world energy
market prior to switching to anew technological wave associated with
awide use ofnon-hydrocarbon energy in the economy, as well as an
overall decreasing dependence ofthe Russian economy and budget
on operation ofthe fuel and energy complex. Precisely during this
phase, the fuel and energy complex is expected to concede its leading
position in the Russian economy and budget revenues in favor ofnew
innovative sources ofgrowth based on manufacturing and high technology science-intensive services.
In these circumstances, direct state participation in the energy sector will gradually dwindle and be replaced by various forms ofstateprivate partnership particularly in construction and modernization
ofenergy infrastructure and development ofinnovations. At the same
time, the state will strengthen its regulating influence in the sphere
ofimprovement and optimization ofthe institutional environment in
the Russian energy sector.
Third phase consists in developing an innovative economy. Accordingly, this phase is characterized by agradual transition to the
energy sector ofthe future with fundamentally different technological possibilities offurther development based on ahighly efficient use
oftraditional energy resources and new non-hydrocarbon energy resources and technologies.
Previous investments and innovations such as new technologies,
equipment and operating principles in the Russian energy sector and
related industries will ensure the innovative development ofthe countrys energy sector.
The main risks ofthe third phase lie in the provision ofthe necessary level ofquality and efficiency ofinnovations in the energy
sector.
The external conditions for the development ofthe Russian energy
sector during this period will be the significant decrease in the proportion ofthe energy sector in the Russian economy by substituting it
with non-energy sources ofinnovative economic growth and actively
developing non-hydrocarbon energy in the world.
27
In these circumstances, state participation in the energy sector development will mainly consist in supporting innovative development
areas ofthe energy sector (non-fuel energy, etc.), as well as providing
and regulating sustainable institutional environment for effective functioning ofthe energy sector.
The third phase should be completed by 2030.
2. Main strategic guidelines

Energy security is one ofthe most important components ofthe national security.
Energy security is the countrys security, that ofits citizens, society, state and economy from the threats to reliable supply offuel and
energy. These threats are determined by external (geopolitical, macroeconomic, market) factors, as well as by the condition and operation
ofthe countrys energy sector.
Energy security is provided and determined by resource sufficiency, economic availability, ecological and technological acceptability.
Resource sufficiency determines the physical possibility ofdeficit-free
supply ofenergy resources to the national economy and the population. Economic availability determines the profitability ofsuch supply
at appropriate market prices. Ecological and technological acceptability determines the possibility ofextraction, production and consumption ofenergy resources within the existing technological and
ecological limitations determining operation safety for energy facilities at various phases.
Russias energy security has been provided in full during the implementation ofthe Energy Strategy ofRussia for the period upto2020.
Nevertheless, it has not always been possible to avoid local short-term
violations ofenergy security committed in some regions thus reflecting the existing systemic problems in the Russian energy sector.
The main problems in the field ofthe energy security are as follows:
high degree offixed assets depreciation in the fuel and energy
complex (in the electric energy and gas industries almost
60%, in the oil refining industry 80%);
low level ofinvestments in the development ofthe fuel and
energy complex (in the last 5 years, investments in the fuel
and energy complex amounted to approximately 60% ofthe
volume specified in the Energy Strategy ofRussia for the period
upto2020);
28
sole dependence ofthe Russian economy and its energy sector

on natural gas the share ofwhich represents around 53% ofthe
domestic energy consumption;
failure ofthe industrial potential ofthe fuel and energy complex
to match the world scientific and technical level, including in
terms ofenvironmental standards;
slow development ofthe energy infrastructure in the Eastern
Siberia and Far East.
The strategic objective ofthe state energy policy in the sphere
ofenergy security is to continually improve the following main characteristics:
the ability ofthe fuel and energy complex to reliably provide for
economically sound domestic demand for quality and affordable
energy;
the ability ofthe consumer sector ofthe economy to use energy
resources efficiently by preventing irrational expenditures ofthe
society on energy supply;
the stability ofthe energy sector against external and internal
economic, technogenic and natural threats to the reliable energy
supply, and its ability to minimize the damage caused by various
destabilizing factors.
Energy security is achieved by implementing all major components
ofthe state energy policy based on the following key principles:
ensuring the guaranteed and reliable energy supply in the
economy and to the population in full under normal conditions
and in the minimum necessary amount under various exceptional
circumstances by the creation ofthe system ofstrategic reserves
offuel and energy resources, regulations on minimum allowable
reserves ofgenerating and energy transporting capacities, levels
ofseasonal reserves offuel, reserves ofequipment necessary
to eliminate the consequences ofmajor accidents in the energy
sector;
separation ofpowers and responsibilities ofthe state bodies,
executive bodies at federal and regional levels, ofenergy
supplying companies and business entities-consumers in the area
ofproviding for energy security to all sectors ofthe economy,
population, socially important objects and business entities;
ensuring reliable operations and predictable development ofthe
energy infrastructure, including utilization ofstate-private
partnership mechanisms, consistent lifting ofrestrictions in
29
transportation ofenergy resources between different regions

ofthe country and between territorial production complexes
(energy hubs) within regions;
ensuring timely exploration, preparation and development ofnew
deposits (deposits, areas, sections, provinces) oftraditional fuels,
including through state-private partnership and rational tax
policy (referring to the growth ofproven recoverable reserves,
which outruns the production thereof), timely preparation to
the use ofsubstitute innovative energy resources and energy
sources in proportion to the depletion oftraditional fossil energy
resources;
avoiding depreciation offixed production assets to alevel
threatening the energy security and stimulating investments
to modernize these assets by introducing tax credit investment
mechanisms, tax holidays for project investment payback period,
accelerated depreciation, and investment risk insurance;
maximizing the use ofcompetitive domestic equipment in
all technological processes and projects, stimulating the
development ofdomestic energy production with high added
value and improving the quality ofoil products by tightening
quality standards for engine fuel, modernizing oil and gas
processing facilities in Russia, differentiating excise rates on
engine fuel ofdifferent quality;
improving national energy security as aresult ofinternational
cooperation in the energy sector while guaranteeing execution
ofthe obligations under international export contracts for energy
supply.
The strategic objective ofthe state energy policy to improve energy
efficiency in the economy is to maximize the rational use ofenergy resources by ensuring that it is in the interest ofthe consumers to save
energy, improve their energy efficiency and investing in this field.
Over the past five years, energy intensity ofthe Russian economy
decreased faster than was predicted in the Energy Strategy ofRussia
for the period upto2020 mainly due to optimization ofthe workload
ofthe existing spare productive capacity under conditions ofsubstantial growth ofthe demand for energy, and arapid development oflow
energy-intensive services.
Increased world prices for exported fuel and energy resources have
considerably affected growth ofthe gross domestic product thus reducing its energy intensity.
30
The main problem in this sphere is the considerable untapped potential oforganizational and technological energy saving amounting
to 40% ofthe total volume ofthe domestic energy consumption. The
proportion ofvarious components ofthe aforementioned potential was
estimated as follows:
residential 1819%;
power generation, industry, transport from 13 to 15% each;
heat supply, services, construction from 9 to 10% each;
production offuel, gas flaring, and energy supply ofstate
institutions from 5 to 6% each;
agriculture 34%.
The following measures ofthe state energy policy, grouped by
mechanisms ofits implementation, will be applied to achieve energy
efficiency ofthe economy.
Creating afavorable economic environment, including the following:
elaboration ofcomprehensive federal and regional legislation on
energy saving;
setting up an integral system ofcontrol over the process ofenergy
efficiency enhancement;
setting up an energy services market;
establishment ofa rational system for domestic energy prices
through their gradual and controlled liberalization to promote
careful use ofenergy in the economy and by the population;
promotion ofentrepreneurial energy saving activities by setting
up refund mechanisms ofprivate investments in energy saving.
Developing asystem ofprospective regulations, standards and
norms providing for the following:
increased responsibility for irrational and inefficient use ofenergy
by including requirements for energy efficiency (requirements
for specific energy consumption ofmachinery and equipment,
for heat loss in buildings, for water consumption in plants with
water-intensive processes within the existing technical regulation
system);
introduction ofspecial energy saving standards and penalties
for their violation, as well as tax incentives when exceeding
the standards for promoting replacement ofdepreciated
equipment;
state statistical monitoring ofenergy efficiency and energy
saving, and the introduction ofenergy saving labeling;
31
energy audits establishing energy passports for organizations

with subsequent collection, analysis and systematic use ofthe
gathered information.
Supporting strategic initiatives, including the following:
developing state, regional, and municipal energy saving programs
and monitoring oftheir implementation;
state support for developing new energy saving technologies and
implementing energy saving pilot projects;
promoting the energy audits through special projects implemented
as apart ofthe program supporting the development ofsmall
businesses (business-incubators, training programs, etc.),
organizing compulsory energy audits ofall types oforganizations
(enterprises) on aregular basis;
elimination ofunaccounted use ofenergy resources by installing
meters accounting for energy consumption, especially for
residential consumers, developing automated systems for
commercial accounting ofelectricity and heat consumption on
the retail market, establishing asystem ofmetrological control
ofinstruments measuring fuel and energy resources in real
operating conditions;
improving energy efficiency ofthe budget sector, including
by providing to budget organizations the right to dispose the
savings generated from implementing energy saving projects in
accordance with the Russian budget laws;
implementing special measures to improve energy efficiency
in housing and communal complex, including by introducing
amethod ofreturn on investments, new mandatory construction
norms and regulations for effective use ofenergy not only for
housing properties, but also for public, commercial and industrial
buildings;
promoting the development and use ofnew energy technologies
providing quality products with qualitatively new consumer
properties;
implementing information and educational programs (events),
promoting energy saving;
developing and supporting international cooperation in energy
saving and energy efficiency, and in research ofnew energy
sources.
32
The budget efficiency ofthe energy sector is determined by the balance, stability and predictability ofbudget revenues from direct payments ofbusiness entities ofthe energy sector, on the one hand, and
ofinvestments from the stated entities necessary to further develop the
energy sector to meet the demand for energy resources and ensure costeffective operations, on the other hand.
During the implementation ofthe Energy Strategy ofRussia for the
period upto2020, the energy sector was one ofthe most stable operating industrial complexes ofthe Russian economy providing the main
contribution to the gross domestic product, export and budget revenues. Favorable foreign economic conditions also contributed to the
increase in financial prosperity ofenergy companies as well as in their
investment capacities.
The following problems are encountered in this sphere:
insufficiently large-scale investment renewal ofthe energy sector
under the current fiscal policy in respect ofexport revenues
ofenergy companies with relatively low profitability oftheir
activities on the domestic market;
unbalanced ratio ofthe fuel and energy complexs share in
the countrys tax revenues and its share in the total volume
ofinvestments in fixed capital (in particular, over the last five
years, this ratio changed from 1.7:1 to 2.6:1).
The strategic objective ofthe state energy policy aiming at budget
efficiency ofthe energy sector is to ensure the effectiveness ofrelations
between the state and energy business with regard to Russias budget
revenues, agood economic environment for private investments in the
energy sector, direct state support in implementing strategic or socially
important energy projects.
The following measures ofthe state energy policy will be implemented to ensure the budget efficiency ofthe energy sector.
Creating afavourable economic environment, including the following:
rationalizing the tax burden on energy companies in the frames
ofa normative legal base elaboration aimed at effective economic
regulation in the energy sector;
improving the business environment by establishing clear and
stable rules for companies activities guaranteeing investors
rights by introducing predictable and balanced taxes and the
normative legal base protecting investors rights and promoting
competition;
33
improving the amortization policy by providing an accelerated

amortization tax treatment for fixed assets to promote investments
to replace and update them;
improving state price (tariff) regulation for natural monopolies
taking into account the objective cost increase ofextraction,
production and transportation ofenergy on the domestic market,
the need for investments to develop infrastructure facilities, as
well as planned increased control over cost effectiveness in this
sphere (improving the purchase system ofnatural monopolies,
switching to long-term tariffs and improving regulating
organizations transparency and information openness);
completing the development ofa system ofelectricity markets
providing sufficient incentives for investments in developing the
industry and improving energy efficiency ofthe consumers.
improving licensing policy, removing unjustified administrative
barriers;
amending the normative legal base for technical regulation
ofthe energy sector, including simplifying approval procedures
ofproject documentation for model energy projects with high
technological and environmental indicators, simplifying
certification procedures for generating equipment in respect
ofwhich compliance with the best international standards is
confirmed, establishing priorities to use advanced international
standards ofdesign, manufacturing and operating power
equipment;
improving accounting and control ofthe reliability and quality
ofthe goods and services provided by the energy companies.
Supporting strategic initiatives, including by the following:
developing state-private partnership to implement energy
projects;
developing arisk insurance system for long-term investments in
the energy sector;
establishing joint leasing companies to provide organizations in
the energy sector with advanced technologies and equipment;
promoting economic incentives for small and medium businesses
in the energy sector taking into account sectoral specificities and
venture innovative manufacturing methods;
34
promoting technological modernization, innovative development

ofenterprises and industries ofthe fuel and energy complex;
organizing and promoting personnel training at all levels in the
fuel and energy complex.
The energy sector is one ofthe major sources ofenvironmental pollution in Russia with over 50% ofpollutants emissions into the air, over
20% ofdirty polluted discharges into the surface waters, and over 70%
oftotal greenhouse gases emission.
The environmental safety ofthe countrys energy sector is provided
for by minimizing the negative impact ofextraction, production, transportation and consumtion ofenergy resources on the environment and
climate.
period upto2020, the environmental safety ofthe energy sector was
considerably improved. Environmental requirements for subsoil use
became stricter and aset ofmeasures was developed to use associated petroleum gas effectively. asystem ofstate ecological examination
ofinvestment projects in the energy sector was also developed.
At the same time, solving the problem ofrational use ofassociated
petroleum gas is being hindered (no regulatory base for access to pipelines for producers ofdry stripped gas exists), and there are no economic incentives for companies to ensure effective utilization ofwaste from
the energy sector and recultivation ofdisturbed soils.
The main objective ofthe state energy policy to ensure environmental safety ofthe energy sector is to consistently limit the impact ofthe
fuel and energy complex on the environment and climate by reducing
emissions (waste) ofpollutants and greenhouse gases into the environment, as well as decrease waste from production and consumption.
The following measures ofthe state energy policy will be applied to
implement the environmental safety ofthe Russian energy sector.
Creating afavorable economic environment, including the following:
promoting and creating conditions for introducing environmentally
clean energy efficient and resource saving technologies in the
production, transportation, storage and use offuel and energy
resources;
removing the main infrastructure, technological and other
barriers preventing the rational use ofassociated petroleum gas
and minimizing the volume ofits flaring;
creating conditions to expand electricity and heat production on
the basis ofrenewable energy.
35

stricter control over compliance with the environmental
requirements when implementing investment projects in the
energy sector and operating energy facilities;
harmonization ofRussian and international environmental laws.
Supporting strategic initiatives, including the following:
developing environmental audit oforganizations ofall forms
ofownership operating in the fuel and energy complex ;
promoting increase in the production ofhigh-quality engine fuel
with improved environmental characteristics corresponding to
the international norms and standards.
The indicators ofthe energy security are listed in Appendix 2.
3. Subsoil use and management

of the state subsoil fund
The strategic objective ofthe state energy policy for subsoil use and management of the state subsoil fund is to ensure sustainable, efficient and environmentally save reproduction ofthe mineral resource base to meet the energy needs ofthe countrys economy, as well as to ensure energy exports.
period upto2020, the following was achieved:
Long-term state program for subsoil exploration and reproduction
ofthe mineral resource base in Russia on the basis ofbalance
ofconsumption and reproduction ofmineral raw materials developed
by the Ministry ofNatural Resources and Ecology ofthe Russian
Federation as well as anumber ofregional programs for development
and reproduction ofthe hydrocarbon resource base were approved;
holding public auctions for the right to subsoil use widely
practiced;
the works ofgeological survey, prospection and exploration
ofhydrocarbon deposits have been redistributed between the
state and subsoil users;
state controls and sanctions have been actively used against
unconscionable subsoil users.
The main trends are as follows:
the proportion ofcomplex and hard-to-recover fuel and energy
resources (hard-to-recover and superviscous oil, fat and lowpressure gas) in the structure ofthe Russian fuel and energy
resources is increasing;
36
the geography ofhydrocarbon production in Russia is changing by

exploiting resources in the Eastern Siberia, Far East, Yamal Peninsula
and continental shelf ofthe Arctic seas and the Caspian Sea.
The main problems in this field are as follows:
the reserves offuel and energy resources uncovered by
exploration works annually lag behind the production offuel and
energy resources (oil, gas, some coal grades);
the pace ofgeological exploration to develop the deposits offuel
and energy resources in the Eastern Siberia, Far East, Yamal
Peninsula, continental shelf ofthe Arctic seas is rather slow;
the exploitation ofexisting deposits is insufficiently efficient in
terms ofthe most full and comprehensive extraction offuel and
energy resources;
the regulation mechanism ofsubsoil use from the search to the
development and closing ofdeposits is not efficient.
To achieve the strategic objective set for subsoil use and management ofthe state subsoil fund, the following goals should be realized:
increase in paces ofgeological exploration ofnew territories and
waters;
promotion ofprivate investments in geological exploration and
subsoil use;
promotion ofeffective subsoil use based on full and comprehensive
extraction offuel and energy resources and improvement ofoil
extraction ratio;
development ofmarket ofindependent engineering services in
the sphere ofsubsoil use.
These goals will be implemented using the following measures and
mechanisms ofthe state energy policy:
increase in the state participation in developing new territories
and waters, including the continental shelf ofthe Arctic seas as
well as in state financing ofgeological exploration;
improvement in the licensing policy, elimination ofexcessive
administrative barriers for exploration works, rapid transition to
implementation tax incentives on arental basis for subsoil users;
elaboration ofa special tax regime for the exploration ofthe
Russias continental shelf;
provision ofthe conditions for achieving at least 95% ofassociated
petroleum gas use;
37
increase in reliability offuel and energy reserves accounting and

introduction ofprinciples ofcross-cutting management offuel
and energy deposits at all phases (from prospection to complete
development and closing ofdeposits).
4. Development ofdomestic energy markets

The strategic objective in developing domestic energy markets is
sustainable meeting ofthe domestic demand for high-quality energy
resources at stable and affordable for Russian consumers prices by creating and developing highly competitive energy markets with fair trade
principles.
This component ofthe state energy policy is crucial to the development ofthe energy sector and the economy as awhole.
basic institutions for adomestic energy market were set up
(exchange trade in oil and oil products, experimental electronic
platform to trade natural gas with prices not regulated by the
state, trading system for electric energy based on acompetitive
procedure ofprice bids from the market participants in real time
mode and in the one-day-ahead mode);
the electric energy industry was restructured resulting in creating
conditions for switching to atargeted model for the electricity
market;
the coal industry was successfully restructured and the domestic
coal market were liberalized;
special customs duties were introduced to promote export
ofhighly processed energy products (refined oil products), while
import customs duties on processing equipment for oil refineries
were lifted;
prices for associated petroleum gas were deregulated.
Modern trends in this field point to the development ofenergy exchange trade and to the strengthening ofthe state participation and
control in the oil and gas sector.
The main problems in the stated field are as follows:
shortcomings in market infrastructure (basic market institutions
and mechanisms ofexchange trade);
presence ofregional and technological monopoly, along with
unfair competition on domestic energy markets;
38
disparities ofdomestic energy prices for main energy resources;

unsolved problems in reforming and restructuring ofheat supply
and the creation oflocal heat markets;
access to energy infrastructure is not sufficiently transparent;
maintenance ofcross-subsidies in the energy sector.
To achieve the strategic objective set for developing domestic energy markets, the following goals must be realized:
improvement ofthe state control over the level ofeconomic
concentration on energy markets and ofthe state regulation
ofnatural monopolies in the energy sector;
setting up and development ofdomestic systems ofexchange
trade for all types offuel and energy resources;
enhancement ofthe access system to energy infrastructure;
setting up ofan effective and stable pricing system on energy
markets correlating with the measures to promote competition
in all potentially competitive segments ofenergy markets and
promoting energy efficiency and energy saving.
legislative provision oftransparent and non-discriminatory
procedure for access ofall market participants to energy
infrastructure (trunk pipelines, electric and heat networks),
toughening ofantimonopoly laws aiming to prevent cartels and
technological monopolism, creation ofan integrated system
ofenergy markets monitoring;
promotion ofthe private companies participation in energy
exchange trade, elaboration ofregulatory frameworks for trade
in energy derivatives (futures, options, etc.) in rubles, utilization
ofthe exchange trade results as indicators for the pricing system
ofthe Russian energy carriers;
elimination ofcross-subsidizing at all levels, reduction in the
state price regulation ofnatural monopolies products for the
population on the principle oflimiting the maximum allowable
share ofspending on energy supply ofsocially significant
categories ofthe population;
gradual liberalization ofdomestic markets for basic energy
(gas, electricity, heat), promotion oflong-term energy supply
agreements conclusion.
39
5. Promotion ofa rational fuel and energy balance

The state energy policy strategic objective set to form arational fuel
and energy balance is to optimize the production, domestic consumption and export offuel and energy resources while considering the requirements for energy security, economic and energy efficiency and
strengthening the countrys foreign economic positions.
the ratio ofdomestic prices for gas and coal was changed from 0.6
to 1.1 (this change has not yet been reflected in the restructuring
ofthe domestic energy consumption);
crude oil export was gradually replaced by the export ofoil
products. Oil refining was considerably developed in the country
following the changes ofexport duties on oil and oil products.
The current trends provide for:
an increasingly important role ofrenewable energy in meeting
the countrys energy needs;
the development ofthe coal industry on the basis ofnew clean
coal technologies;
the development ofthe production ofenergy products with high
added value.
increase in the share ofgas in the domestic energy consumption;
insufficient development ofproduction ofenergy products with
high added value (light oil products, engine fuel, liquefied natural
gas) and large-scale export ofraw energy materials not or only
slightly processed;
slow rates ofdevelopment ofnuclear energy;
insufficiently active development ofrenewable energy and use
oflocal energy resources in regional energy balances;
absence ofmechanisms determining use ofenergy balances in
forecasting and management ofthe fuel and energy complex at
federal and regional levels.
To achieve the strategic objective set for promoting arational fuel
and energy balance, the following goals must be realized:
decrease in the share ofgas in the domestic energy consumption
along with the corresponding increase in the share ofcoal and
non-fuel energy;
provision ofthe rational ratio ofexport and domestic consumption
ofdifferent fuel and energy resources;
40
promotion ofproduction, export and domestic consumption

ofenergy and non-energy production from the fuel and energy
complex with high added value.
provision ofeffective inter-fuel competition ofsubstitute energy
resources (gas, coal), direct state support for nuclear energy
development and promotion ofcoal-based energy development
(clean coal technologies);
elaboration oflong-term policy for developing renewable energy
taking into account the structure and trends ofthe forecasted
fuel and energy balance;
provision ofequal profitability ofenergy supply to the domestic
market and for export;
realization ofthe state policy aiming at improving the quality
ofengine fuel and oil refining depth, rational state support
ofprojects in deep treatment and enrichment ofcoal, as well
as the production ofsynthetic liquid fuel based on all types
ofenergy resources (natural gas, coal, biomass, etc.);
increase in use and importance ofreporting and forecasting fuel
and energy balances as atool to analyze and correct imbalances,
and to manage effectively the development ofthe fuel and
energy complex and its industries (not making them prescriptive
meanwhile) as well as transition to performing the balances in
accordance with international standards.
6. Regional energy policy

The strategic objective ofregional energy policy is to set up astable
and self-regulating system ensuring regional energy security based on
optimized territorial structure ofenergy production and consumption.
Implementing regional energy policy in acountry like Russia (with
different climatic and socio-economic conditions) should be based on
incorporation ofregional specificities and correlate with strategic national objectives for long-term development ofthe economy and the energy sector.
While implementing the Energy Strategy ofRussia for the period
upto2020, the following was achieved:
hydrocarbon production concentration level was decreased due
to development ofhydrocarbon production in other regions ofthe
country, apart from the Western Siberia;
41
energy connections between the regions were strengthened by

developing energy infrastructure (oil and gas pipelines, power
lines);
the disparities both in the structure ofenergy consumption and
energy self-sufficiency between different regions ofthe country
were decreased (average gap in the level ofenergy self-sufficiency
in the regions decreased from 20 to 15%);
the priority development ofthe energy sector in regions with high
cost energy resources was realized under the relevant federal
target programs (the Far East, Trans-Baikal, Kaliningrad Region,
North Caucasus, etc.).
The current trends in this field relate to the formation ofa new geography ofenergy-redundant and energy-deficient regions, as well as to
the shift ofcenters ofenergy production, processing and export to the
north and east ofthe country.
high level ofdisparities in energy self-sufficiency and structure
ofenergy consumption in the regions, need for rational
distribution ofrevenues from energy production between mining
regions and the federal center;
lack ofconsistency between strategies, programs and plans
for socio-economic development ofthe regions with federal
strategic documents in the sphere ofthe fuel and energy
complex (master plans, strategies ofindividual industries,
federal target programs) and investment programs ofenergy
companies;
bottlenecks in energy supply systems at interregional and
intraregional levels;
insufficient development ofsmall-scale energetics, negligible
role oflocal energy resources ofregional and local importance in
fuel and energy balances ofthe regions;
absence ofregional energy programs and programs for energy
saving as well as urban heating development programs in many
regions.
To achieve the strategic objective ofthe regional energy policy, the
following goals must be realized:
improvement ofinteraction between the federal executive
authorities, executive authorities ofthe constituent entities ofthe
Russian Federation and local authorities by means oflegislative
division ofpowers and responsibilities in energy saving policy
42
realization, energy reliability and safety provision, regulation

and promotion for development in energy sector;
the state support for development ofthe interregional and
intraregional energy infrastructure;
implementation ofmajor regional strategic initiatives ofthe state
and energy business (energy developing ofthe Eastern Siberia,
Far East, Yamal Peninsula and Arctic);
promotion of the integrated development ofregional energy
sectors.
provision for consistency offederal and regional strategic
development programs for the energy sector and its industries,
legislative division ofpowers and responsibilities ofauthorities
at various levels, improvement in transparency ofthe distribution
systems ofrevenues derived from energy production;
elimination ofcross-subsidizing in the electric energy industry;
development ofthe necessary interregional and intraregional
energy transportation lines, construction ofdifferent types
ofenergy infrastructure for regional spatial-industrial clusters
ofenergy-intensive (resource-based) and energy-efficient
(innovative) types;
elaboration and implementation ofregional energy programs,
regional programs ofenergy saving, maximization ofthe costeffective use oflocal energy resources, development ofcosteffective decentralized and individual heating systems.
7. Innovation and scientific-and-technical policy

in the energy sector
The strategic objective ofthis component ofthe state energy policy
is to set up asustainable national innovative system in the energy sector
providing the Russian fuel and energy complex with highly efficient domestic technologies and equipment, as well as scientific-and-technical
and innovative solutions necessary to maintain the countrys energy
security.
The scientific-and-technical and innovative policy for the energy
sector should be based on recent achievements and forecast for priority
lines ofdevelopment ofdomestic and world fundamental and applied
science in this sphere and provide for new highly efficient technologies
to be developed and introduced in the Russian energy sector.
43

period upto2020, large complex ofresearches was conducted in the
priority area Energy Sector and Energy Saving in the frames ofimplementing the federal target scientific-technical program Research
and Development in Priority Areas ofthe Science and Technology for
the period 20022006, the federal target programs Research and Development in Priority Areas ofthe Development ofRussias Scientific
and Technological Complex for the period 20072012 and National
Technological Base for the period 20072011.
Scientific bases were laid down, technologies and experimental designs ofequipment and materials were developed during this period,
including:
new efficient methods ofmineral exploration, including
exploration on the continental shelf;
scientific bases for the transit ofenergy resources in difficult
climatic and geographical conditions;
technologies and experimental-industrial production to process
hydrocarbon resources, including associated petroleum gas;
technologies to produce synthetic liquid fuels from natural gas,
coal and biomass;
industrial complexes to develop oil fields with low-permeability
structures, high-viscosity oil, and oil bitumen;
technologies for extraction and industrial use ofcoal-bed
methane;
technologies and complex ofequipment to produce and use coalwater fuel;
advanced technologies and new types ofelectric equipment for
transmission, distribution and consumption ofelectricity;
energy and transport units running on alternative fuels;
model range ofheat and power plants (mini heat and power
plants) ofmodular type;
energy-saving and environmentally friendly lighting appliances
ofa new generation, using LED and mercury-free gas-discharge
lamps;
technological bases for rapid diagnosis ofelectric equipment;
technological bases for heat supply systems ofnew generation
ensuring asignificant reduction in energy loss;
technological solutions for capture and burial ofcarbon dioxide
using modern combustion technologies;
44
experimental-industrial production ofpower plants on fuel

elements (solid polymer and solid oxide) for autonomous, backup,
emergency power generation and for vehicles;
technologies and equipment using low-potential geothermal
resources.
Positive changes occurred in scientific and technological cooperation ofscience and energy business, while human resource centers providing for the scientific and technological needs ofthe energy sector
were reinstated.
Recent trends in this field relate to the growth ofcapital-intensive
scientific and technical developments in the fuel and energy complex,
as well as the development ofintegrated research and production systems (technology parks) in the energy sector.
The major problems in this field are as follows:
high dependency ofenergy companies on imported energy
technologies and equipment;
inconsistency ofthe technical level ofenergy companies with
the modern requirements;
absence ofintegral and coherent system ofinteraction between
science and business providing, on the one hand, the necessary
demand ofenergy sector for scientific and technical achievements
and establishing clear market pointers for their development
and introduction, and, on the other hand, developing ahighly
competitive market ofscientific and technical services;
absence ofthe developed innovative infrastructure in the fuel
and energy complex (technology transfer centers, innovation
and technology centers, technology parks, business incubators,
training centers for innovative activities, venture funds, etc).
To achieve the strategic objective set by the innovation and scientific-and-technical policy in the energy sector, the following goals must
be realized:
reconstruction and development ofthe scientific and
technological potential, including fundamental science, applied
research and development, modernization ofthe experimental
facilities and scientific and technical information systems;
provision offavorable conditions for development ofinnovative
activity aimed at radical renewal ofthe industrial and
technological base ofthe fuel and energy complex, resourcesaving, increase in the efficiency, reliability, security and
environmental performance ofenergy plants and systems,
45
rapid development ofrenewable energy and improvement ofthe

consumer properties offuel and energy products;
setting up the system ofstate support and promotion ofenergy
companies activities in the field ofdevelopment and
implementation ofinvestment project providing for innovative
development ofthe Russian energy sector, as well as ofsimilar
projects, been realized abroad;
improvement ofall the phases ofinnovative process in the energy
sector, promotion ofdemand for and efficient use ofscientific,
designing, and engineering innovations;
protection ofthe rights to the results ofscientific and technical
activities;
utilization ofthe potential ofinternational cooperation aimed at
implementation ofthe best world solutions and achievement by
the domestic developments at ahigher qualitative level;
maintenance and development ofhuman resources and scientific
bases, integration ofscience, education and innovation.
An innovative approach to developing the fuel and energy complex
also implies creating conditions for developing acontinuous process
ofsearch and application ofnew scientific and technical, technological, organizational and economic solutions under state regulations and
clear system ofinteraction between all participants in this innovation
process.
Among the priorities ofscientific and technological progress in the
energy sector the following areas should be noted.
Development ofthe Resource Base in the Fuel and Energy Complex:
developing innovative technologies ensuring the reproduction
offuel and energy reserves (resources), improving reliability
offorecasts for promising sites, radical decrease in timetable
ofsearch and exploration works on deposits in marine waters.
Oil Complex:
improving oil recovery rate ofoil fields being developed and
brought into development, including fields with non-conventional
hydrocarbons such as heavy (high-viscosity) oil and natural
bitumen;
introducing advanced oil recovery methods;
developing and wide-spread use ofdomestic software-hardware
systems, equipment, and devices to simulate and manage geological
and technical activities in the development ofdeposits;
46
provision ofscientific and technological support to improve the

quality oflight oil products (including in line with international
standards);
introducing technologies and equipment for small-tonnage
production ofsynthetic liquid fuels in the field ofassociated
petroleum gase production as well as in isolated natural gas
fields.
Gas Industry:
developing and introducing technological complexes for drilling
and extracting hydrocarbons on the continental shelf ofthe
Arctic seas;
developing domestic equipment, technologies and materials
to increase the reliability ofwells, drilling-in, including in lowpressure natural gas deposits;
economic utilization ofunconventional natural gas reserves;
developing domestic equipment, technologies and materials to
construct and operate trunk pipeline systems with advanced
characteristics as well as distribution networks ofpolymeric
materials;
designing and developing equipment for raw products
treatment, extraction ofhigh efficiency components (ethane,
helium), engine fuel and hydrogen production, including for
installation at the gas fields.
Coal Industry:
improving the quality ofexploration works including introduction
ofthe latest methods ofthree-dimensional modeling;
increasing the level ofdevelopment ofthe material, technical
and scientific research base in the area ofwork safety, accident
prevention and liquidation (including automation ofindustrial
processes in coal extraction, developing new technologies and
equipment for effective coal-bed degasification, developing
equipment and protection means from methane and coal dust
explosion);
developing and introducing the system ofmeasures aimed at
improving the quality ofcoal production (including wide-spread
use oftechniques and technologies providing for improvement in
the quality ofcoal produced, developing and applying efficient
coal preparation technologies, designing equipment to produce,
transport and store standardized coal fuel);
47
radical technical renewal ofcoal production (including equipping

open-pit mines with highly-productive mining transport
techniques ofcontinuous and cyclical action, including for coalbed selective mining; developing underground coal mining
technologies with prior utilization ofscouring mechanized
complexes and excavating equipment ofnew technical level, as
well as short bottom-hole technology with continuous miners and
self-propelled means oftransportation for coal);
developing production ofliquid and gas products from high
coal processing, integrated use ofrelated resources and coal
conversion waste;
improving efficiency ofscientific research on the safety ofcoal
mining, as well as scientific research on geo-mechanical
phenomena in management ofcoal beds prone to sudden
methane outbursts and mine bumps, developing measures to
prevent them.
Electric Energy Industry:
developing gas turbines with acapacity of300350 MW and
on their basis highly efficient condensation combined cycle gas
turbine units with acapacity of5001000 MW and aperformance
index exceeding 60%;
designing standard modular combined cycle co-generation units
with acapacity of100 and 170 MW and aperformance index
amounting to 5355% for heat and power plants;
developing environmentally friendly coal condensation units on
ultra supercritical steam conditions with aperformance index
of4346% and acapacity of660800 MW;
developing environmentally friendly combined cycle units on
solid fuel gasification with aperformance index of5052% and
acapacity of200600 MW, as well as acombine cycle unit on
coal synthesis gas;
designing, developing prototypes and introducing technological
energy complexes working on gas and solid fuel for combined
production ofelectricity and synthetic liquid fuel;
developing highly integrated intellectual backbone transmission
and distribution networks ofnew generation (Smart Grids) in the
Russias Unified energy system;
developing ultra-high voltage alternating and direct current
electric transit lines the Siberia Urals European part
ofRussia;
48
designing electrical conductors on the basis ofnew composite

materials providing for increase in the current-carrying capacity,
reduction in the construction costs oftransmission lines, as well
as in distribution losses;
producing high-temperature superconductor materials as well as
devices made on their basis;
utilization oflow-temperature superconducting inductive electric
accumulators in electrical networks and guaranteed supply
ofresponsible consumers;
active development ofdistributed generation;
developing power electronics along with devices based on it,
especially various types ofnetwork controlling devices (flexible
alternating current transmission systems (FACTS));
developing ahighly integrated information and management
complex ofoperational dispatch management working in real
time mode with expert decision-making systems;
developing highly reliable backbone communication lines
between various levels ofdispatch management as well as
duplicate digital channels for information exchange between
objects and control centers;
developing and broad introducing ofcentralized systems
ofemergency control covering all levels ofthe Russias Unified
energy system;
designing automated electricity demand controlling systems;
developing acomplex ofhighly-efficient and environmentally
friendly hydroelectric equipment for tidal power plants as well as
facilities for their construction with the use offloating blocks;
establishing on the basis ofcomputer diagnosis systems for
hydraulic facilities acentralized safety system to monitor forcefeed hydraulic facilities at hydroelectric power plants, as well as
cascades ofhydroelectric power plants;
designing ahybrid combine cycle power unit;
developing technologies for hydrogen production (including
liquid hydrogen) from water with use ofelectricity from nuclear,
thermal power plants and renewable energy;
designing hydrogen systems for energy accumulation and load
pattern irregularity compensation with an electricity recuperation
rate ofat least 50% for nuclear and coal-fired power plants, as well
as power plants using renewable energy.
49
Nuclear Fuel Cycle and Nuclear Energy Industry:

modernization and renewal ofproduction capacities at nuclear
power plants with thermal neutron reactors;
designing experimental and commercial nuclear power plants
with fast neutron reactors;
designing anew generation ofwater-moderated power reactors
with supercritical steam parameters and adjustable neutron
spectrum;
researching the issues ofoperation and closing offuel cycle,
developing technologies and setting up fuel cycle closing
enterprises providing for fuel supply to nuclear power plants
considering the integral and annual consumption ofnatural
uranium, volume ofseparating works, fuel reproduction
parameters, specific fuel tension rate in fast neutron reactors, as
well as safety issues;
developing innovative technologies in waste processing and
nuclear cycle closing aiming to approximation to the radiationequivalent radioactive waste burial;
developing technologies ofthermonuclear fusion on the basis
ofdomestic innovations and fruitful international cooperation,
including construction ofan experimental thermonuclear
reactor (ITER) and ademonstration power plant with acapacity
of1 GW.
Heat Supply:
developing and wide utilization ofmodular technological
equipment for new construction and transition ofcurrent heating
sources to co-generation;
developing technological equipment and automated heat
consumption control and management systems;
designing efficient combined-cycle technologies with steam
injection and their prior utilization in heat supply;
developing and introducing technologies ofcondensation heat
utilization ofwater vapors in combustion gases;
developing technologies ofcombined low-temperature heat
supply with quantitative and quantitative-qualitative heat load
control and decentralization ofpeak heat capacities;
developing technological equipment and designing standard
technical solutions for utilization ofheat pumps in heating
systems in large cities and urban formations;
50
developing interconnected complex oftechnological subsystems in

the unified system ofcentralised heat supply and centralised cold
supply ofmajor social and industrial consumers ofheat and cold;
developing
telecommunication
systems
ofcentralized
technological management ofmajor heat supply systems
using highly reliable executing mechanisms and technologies
ofgeoinformation systems;
improving technologies ofindustrial production ofheat pipelines
with pre-applied anticorrosion cover, heat and hydro insulation
and remote diagnostics, regulating and locking devices with
automatic gear, as well as ofassembling heat supply networks
with the abovementioned units;
developing and introducing adaptive regulating circuits and
intellectual regulating systems, structures and equipment for
heating and hot water supply systems.
.Renewable Energy and Local Energy Resources:
developing technologies ofrenewable energy utilization, as well
as multi-functional energy complexes for autonomous energy
supply to consumers in regions not connected to centralized
energy supply networks;
introducing efficient technologies ofnetwork electricity and heat
supply on the basis ofrenewable energy;
developing technologies ofcombined use ofrenewable energy,
as well as technologies for compensation ofvariations in power
output ofwind and tide generating units;
developing and introducing technologies ofmodern materials
application in manufacturing equipment and components for
generating facilities on the basis ofrenewable energy in order to
reduce their construction costs and raise operating efficiency;
expanding production and use ofnew types offuel derived from
various types ofbiomass.
Achieving the goals set and promotion ofthe priority areas ofscientific and technological progress in the energy sector will be realized
with the use ofthe following measures and mechanisms ofthe state energy policy:
detection and economic support ofprospective trends ofscientific,
research and innovative activity, as well as crucial technologies
in the fuel and energy complex, taking into consideration their
anticipated efficiency and world tendencies; state support
ofapplied research and development;
51
provision offundamental science funding in energy field, aimed

at the search offundamentally new ways ofenergy demand
efficient meeting, in particular, at the expense ofbudget assets, as
well as by returning apart ofcommercial profit into the research
and development sphere;
innovative cycle restoration: fundamental research applied
research design project prototype models production
by means ofstate participation in creation ofprototype models,
exemption ofcompanies from taxation ofprofit invested into
research and development activity, provision oftax benefits to
energy companies for the initial period ofimplementation ofnew
domestic machinery and technologies, as well as models offoreign
machinery and technologies, which are new for Russia;
developing incentive taxation for engineering and designing
companies, as well as for any companies (including manufacturing
ones) implementing advanced (innovative) technologies in the
energy sector;
developing asystem oftechnological forecasting (Foresight) in
the energy sector;
elaboration oftarget scientific and technical and innovative
programs;
enhancement and development ofconsolidated industrial
financial sources for funding research and development works,
concentration ofbudget and off-budget assets for the major
innovative projects realization;
promotion ofventure business in the sphere ofinnovations in the
energy sector;
developing federal and regional centers ofscience and hightechnologies in the fuel and energy complex;
state support in importing crucial integrated technologies and
purchase offoreign assets technological donors in the field
ofthe fuel and energy complex;
developing an implementation system for the intellectual property
objects and other results ofresearch and development activity in
the fuel and energy complex;
developing proving grounds for testing samples ofnew machinery
and technologies on the basis ofstate-private partnership;
developing regularly updated databases on the most advanced
domestic and foreign developments in the energy sector.
52
8. Social policy in the energy sector

The strategic goal ofthe state policy in this field is the development
ofsocial partnership between the energy sector and the society, as well
as reproduction ofhuman capital in the energy sector.
Efficient interaction between the society and the energy business is
the most important condition ofsuccessful realization ofthe objectives
and goals ofthe Strategy.
The following goals were achieved in the course ofimplementation
ofthe Energy Strategy ofRussia for the period upto2020:
establishing an institution ofguaranteeing suppliers in the
electric energy industry;
implementing social support measures in the context
ofrestructuring the coal industry (provision offree allowance
coal, additional pension provision, assistance in purchase
(construction) ofhousing, creation ofnew jobs, assistance in
resettlement ofminers families from unpromising mining towns
and settlements);
reduction in general injury rate in coal mining more than in half,
reduction in the number ofaccidents by 30%;
commencement ofimplementing projects on social infrastructure
improvement in the energy producing regions, especially in
regions with extreme natural and climatic conditions;
commencement ofimplementing acomplex ofmeasures aimed
at professional training and advanced training ofemployees
engaged in the fuel and energy complex.
Current trends in the stated field relate to sophistication ofrelationships and mutual dependence ofthe society and energy business,
growth ofthe populations expenditures on energy goods and services,
enhancement ofthe human potential role in the development ofthe fuel
and energy complex.
The main problems in this field include:
insufficient level ofsocial infrastructure development in main
coal mining and oil and gas producing regions ofthe country;
the necessity for enhancement ofthe state control over retail
prices for engine oil, gas, heat and electricity for the population;
increase in the human factor role in major accidents at mines for
the last years;
insufficient participation ofthe society in support and
development ofthe energy business in the country;
53
general decrease in the human potential level in the fuel and

energy complex;
low level ofenergy service provision.
To achieve the strategic objective set by the social policy in the energy sector, the following goals should be realized:
provision ofreliable energy supply ofthe population at affordable
prices;
developing apractical cooperation ofthe society and energy
business in solving problems ofthe energy sector functioning
and development;
developing and enhancing efficiency ofthe human potential use
in the energy sector.
The designated goals will be achieved with the use ofthe following
measures and mechanisms ofthe state energy policy:
improving regulations, including antimonopoly regulations,
ofretail prices for energy (gas, heat, electricity, oil products)
aiming to maintain acceptable share in expenditures ofthe
population on required power supply;
enhancing responsibility ofenergy business for power supply
ofthe population;
introducing mandatory norms for rates ofreserve (autonomous)
power supply provision for socially significant facilities in
housing, municipal and budget spheres;
creating safe labor conditions at enterprises ofthe fuel and energy
complex, reducing accident and injury rates;
developing and providing efficient functioning ofthe
comprehensive system ofillness and injury prevention at
enterprises ofthe fuel and energy complex and employees
health rehabilitation;
raising efficiency ofthe system ofthe target social support ofthe
population;
enhancing publicity ofenergy companies, including at the
expense oftheir activity transparency;
improving comprehensively the education system (including
primary and secondary professional education) and further
training ofspecialists ofall levels, taking into consideration
the development ofthe system ofspecialized regional centers,
as well as the system ofoccupational retraining and personnel
retraining in accordance with modern requirements;
54
improving and implementing principles ofproject management

ofhuman resources in the fuel and energy complex;
developing energy service system;
developing social partnership ofthe energy business and the
society, in particular, at the expense ofmore active participation
ofthe population in the share capital ofenergy companies and
public discussion ofnew energy projects in the regions.
9. Foreign energy policy

The strategic objective ofthe foreign energy policy is the maximum
efficient use ofthe Russian energy potential for full-scale integration
into the world energy market, enhancement ofpositions thereon and
gaining the highest possible profit for the national economy.
The global nature ofenergy problems, their rising politicization, as
well as objective importance ofthe Russian fuel and energy complex
in the world energy sector predetermine the important role ofthe foreign energy policy ofthe country. Currently Russia has already occupied one ofthe leading positions in the world system ofenergy resource turnover, it takes an active part in international cooperation in
the sphere offuel and energy resources production and their supply to
energy markets. Russia is interested in provision offurther increase in
efficiency ofproduction and export ofall major energy resources and
products ofprocessing thereof, as well as oftechnologies with respect
to which Russian energy and industrial companies have competitive
advantages.
Stable relationships with traditional consumers ofRussian energy
resources and shaping equally stable relationships on new energy markets are the most important vectors ofthe countrys energy policy in
the sphere ofglobal energy security provision in accordance with national interests ofthe country. The policy ofRussia in the stated field
is being realised in accordance with decisions and recommendations
adopted at the St. Petersburg G8 summit in 2006. It is open and built on
the principles ofpredictability, responsibility, mutual trust and taking
into account interests ofenergy producers and consumers.
The progress ofimplementing the Energy Strategy ofRussia for the
period upto2020 in the stated field is characterized with the following
features.
Export ofmajor Russian fuel and energy resources is growing,
oil products export, substituting the export ofcrude oil, is also
developing.
55
The following large-scale projects on export energy infrastructure

construction aimed at enhancing the reliability ofsupply and transit
ofRussian energy resources to Europe were implemented:
Goluboy Potok (Blue Stream) gas pipeline (16 billion m3 ofgas
per year, 2005);
the first phase ofthe Baltic pipeline system (65 million tons ofoil
per year, 2006);
Yamal-Europe gas pipeline (33 billion m3 ofgas per year, 2007);
the first phase ofthe Sever (North) oil-product pipeline
(8.4million tons ofoil products per year, 2008).
Implementation ofthe following new infrastructure projects, aimed
at diversification ofexport markets for Russian energy resources, was
started:
Severniy Potok (Nord Stream) gas pipeline (55 billion m3 ofgas
per year);
the Eastern Siberia Pacific ocean oil pipeline (80 million tons
ofoil per year).
Agreements for construction Yuzhniy Potok (South Stream) gas
pipeline (30 billion m3 ofgas per year), the Pre-Caspian gas pipeline
(20 billion m3 ofgas per year), and the Burgas Alexandrupolis oil
pipeline (35 million tons ofoil per year) were signed.
Decisions were made on construction ofthe second phase ofthe Baltic pipeline system (50 million tons ofoil per year), and expansion of
the Caspian Pipeline Consortium.
The practice ofenergy assets exchange and mutual share participation ofRussian and foreign companies in the entire economic chain
from exploration and production to distribution ofenergy resources to
end users is being developed. Transition to market relationships in
the sphere ofnatural gas supply to the countries ofthe Commonwealth
ofIndependent States is at the phase ofaccomplishment.
Energy dialogue with the largest countries consumers and producers ofenergy resources, as well as with major regional unions (European Union, Eurasian Economic Community, etc.) and international
organizations (Shanghai Cooperation Organization, Organization
ofPetroleum Exporting Countries, Gas Exporting Countries Forum,
International Energy Agency, etc.) is being actively conducted.
Current trends in this field relate to high volatility ofworld prices
for major fuel and energy resources and aggravation ofcompetition on
traditional sale markets for Russian energy resources.
56
Among the main problems in the stated field are the following:
reduction in demand and cut in prices for energy resources due to
the world economic crisis;
insufficient diversification ofsale markets for Russian energy
resources and ofexport commodities structure;
preservation ofthe Russian export dependence on transit
countries;
politicization in energy relationships between Russia and foreign
countries;
low level ofRussian energy companies activity at foreign
markets.
In order to achieve the strategic objective ofthe foreign energy policy the following goals must be realized:
appreciation Russias national interests in the developing system
ofworld energy markets functioning aiming at their predictable
and stable development;
diversification ofexport energy markets and export commodities
structure;
provision ofstable conditions on energy markets, including
guaranteed demand and sound prices for major exported Russian
energy resources;
enhancement ofleading Russian energy companies positions
abroad;
provision ofefficient international cooperation in implementation
risky and sophisticated projects in Russia (including shelf Arctic
projects).
Development and implementation ofthe foreign energy policy is
based on the principle ofconsistency providing coordination ofactivities at the regional level and in relationships with international organizations, synchronized activity ofthe state and energy companies,
mechanisms ofcontrol and monitoring, determination to achieve the
shared result.
The abovementioned goals should be realized with the diplomatic
support ofRussian energy companies abroad, as well as by means ofthe
following measures and mechanisms ofthe state energy policy:
active participation in international negotiation processes on
energy issues, provision ofbalance between interests ofimporters,
exporters and transiters ofenergy resources in international
treaties and international organizations;
57
development ofenergy cooperation with the countries ofthe

Commonwealth ofIndependent States, Eurasian Economic Union,
North-Eastern Asia, Shanghai Cooperation Organization, and
European Union as well as with other international organizations
and countries;
coordination ofactivity on world oil and gas markets with the
countries-members ofthe Organization ofPetroleum Exporting
Countries and the Gas Exporting Countries Forum;
assistance in developing the united European-Russian-Asian
energy area;
assistance in provision favorable and non-discriminatory
environment for domestic energy and service companies (as well
as for foreign companies with Russian share holders) on world
markets, including their access to productive and distributive
segments offoreign markets;
assistance in foreign investments attraction, primarily for
technically sophisticated and risky projects, on mutually
beneficial basis;
provision ofRussian energy companies with access to the
resources ofworld financial markets and advanced energy
technologies;
stimulation ofRussian energy technologies and services
development and export;
promotion oftransport infrastructure construction in the east,
south, north-west and north ofthe country aimed at diversification
ofsale markets and export destinations for Russian energy
resources;
stimulation ofthe growth in the share ofhighly processed energy
resources in the overall structure ofthe Russian energy export;
rational development oftransit energy flows through the territory
ofRussia;
development ofnew forms ofinternational cooperation (including
technological one) in the energy sector;
provision ofthe Russian energy policy transparency and
coordination ofits energy strategy with prospective plans and
energy strategies ofother market players;
active participation ofRussia in international cooperation
on development ofthe energy ofthe future (hydrogen,
thermonuclear, tidal energy, etc.).
58
VI. Prospects and strategic initiatives

ofthe fuel and energy complex
development
1. Fuel and energy balance ofRussia
The projected fuel and energy balance ofRussia is based on the
abovementioned forecast hypotheses for socio-economic development ofthe country and main components ofenergy policy. It provides harmonization ofdomestic demand and export ofenergy
resources with volumes oftheir production and import, as well as
mitigation ofexisting disproportions connected with domination
ofnatural gas and small share ofcoal and non-fuel energy resources
(nuclear and renewable energy) in the structure ofdomestic energy
consumption.
The projected fuel and energy balance ofRussia for the period
upto2030 provides for the following:
reduction in the share ofgas in the primary energy consumption
from 52% in 2005 to 4647% by 2030;
increase in the share ofnon-fuel energy in the primary energy
consumption from 11% upto1314% by 2030;
large-scale reduction in the specific energy intensity ofthe
economy and the energy sector (by 2.12.3 times) along with
insignificant growth ofdomestic consumption (by 1.41.6times),
export (by 1.11.2 times) and production (1.31.4 times)
ofenergy.
Indicators ofstrategic development ofthe resource base ofthe
fuel and energy complex for the period upto2030 are indicated in
Appendix 3.
The projected fuel and energy balance ofRussia for the period
upto2030 is shown in Appendix 4.
2. Strategic initiatives ofthe fuel and energy complex

development
The Strategy provides for realization ofstrategic initiatives in the
sphere ofthe fuel and energy complex development, aimed to satisfy
growing demand ofthe countrys economy for energy resources, optimize the structure ofenergy production and consumption, improve
energy efficiency ofthe economy and energy sector, promote in enENERGY STRATEGY OF RUSSIA for the period up to 2030
59
hancing international, national and regional energy security. The most

important strategic initiatives include the following:
development ofoil and gas complexes in the eastern regions
ofthe country;
development ofhydrocarbon potential ofthe continental shelf
ofthe Arctic seas and northern territories ofRussia;
development and spatial diversification ofenergy infrastructure;
development ofnon-fuel energy;
promotion ofenergy saving.
Development ofoil and gas complexes in the eastern regions ofthe
country (the continental shelf ofSakhalin, the Republic ofSakha (Yakutia), the Magadan and Irkutsk Regions and the Krasnoyarsk Territory) and construction ofappropriate industrial, transport and social infrastructure will lead to energy self-sufficiency ofthe stated regions as
well as diversification ofthe Russian hydrocarbons export destinations
at the expense ofthe countries ofthe Asia-Pacific region. Involvement
ofmulticomponent hydrocarbon resources ofthe region into industrial
development will promote petrochemical and gas chemical production,
assist in advanced social and economic development ofthe Eastern Siberia and Far East. As aresult, annual growth rates ofgross regional
product in the region will exceed average growth rates in the country
by at least 0.51.5%.
Development ofhydrocarbon potential ofthe continental shelf
ofthe Arctic seas and northern territories ofRussia is intended to play
the stabilizing role in oil and gas production dynamics, compensating
possible decrease in production level in traditional oil and gas producing regions ofthe Western Siberia for the period of20152030.
Creation ofindustrial centers ofnatural gas production on the Yamal Peninsula and continental shelf ofthe Barents, Pechora and Kara
seas will satisfy the prospective demand ofthe economy for natural gas,
provide energy security ofthe country and sustainable development
ofthe fuel and energy complex on along-term basis under conditions
ofgrowing demand ofeconomy for energy resources.
Comprehensive development ofthe stated territories and construction ofappropriate sea and pipe transport infrastructure will
promote development ofindustries invlolved in elaboration ofmodern engineering facilities, technologies ofsearch, exploration, production and transportation ofoil and gas on the continental shelf
ofthe Russian Federation, as well as development ofthe Northern
Sea Route.
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Development and spatial diversification ofthe energy infrastructure

because ofthe strategic role ofthe energy sector in the Russian economy are the necessary condition for sustainable social and economic
long-term development ofthe country.
The following are the most important strategic energy infrastructure
projects, the implementation ofwhich has already begun or is planned
for the nearest future:
construction ofoil pipeline Eastern Siberia Pacific Ocean;
construction ofoil-product pipeline systems Sever (North) and
Yug (South);
construction ofgas pipelines Severniy Potok (Nord Stream)
and Yuzhniy Potok (South Stream);
construction ofmulti-line gas-transport system from the Yamal
Peninsula;
development ofsea port and transport infrastructure for liquid
hydrocarbons transportation (oil, condensate, liquefied natural
gas, wide fraction oflight hydrocarbons).
Development ofthe non-fuel energy is determined by the necessity
to restrict environmental impact ofthe fuel and energy complex facilities, as well as by future stabilization ofhydrocarbon production under
conditions ofongoing growth ofdemand for fuel and energy resources.
The Strategy provides for development ofnuclear and hydraulic energy
industries in accordance with regional peculiarities ofdemand for electricity, as well as peculiarities ofload pattern regulation and allocation
ofgenerating capacities ofvarious kinds. Thus development ofnuclear
power plants is provided primarily for the European part ofRussia, and
the development ofhydroelectric power plants for the Eastern Siberia and Far East.
The Strategy also provides essential role for development ofrenewable energy. Involvement ofrenewable energy, including geothermal,
solar, wind and bioenergy, etc., into the fuel and energy balance will enable to balance the demand for energy and reduce environmental load
ofenergy sector facilities.
Energy saving is also one ofthe most important strategic initiatives
ofthe Strategy, because without its large-scale implementation development ofthe Russian economy will be limited by energy and environmental factors. Realization ofavailable technological and structural
potential for energy saving will make it possible to provide for harmonization ofenergy demand and supply, as well as significantly limit
greenhouse gases emission though maintaining high rates ofeconomic
61
growth. Achievement ofthese objectives will require development

ofadequate incentives for energy saving among energy producers and
consumers.
3. Development ofthe resource base in the fuel

and energy complex
Russia possesses one ofthe worlds largest mineral resource potential
which is the basis for guaranteed provision ofthe countrys economic
and energy security, satisfaction ofcurrent and prospective demand
ofthe Russian economy for crude hydrocarbons, coal and uranium. The
volume and structure offossil fuel reserves, as well as their quality and
exploration degree along with trends ofeconomic development directly influence economic potential ofthe country and social development
ofits regions. Long-Term State Program ofSubsoil Exploration and Reproduction ofthe Mineral Resource Base ofRussia based on the balance
between minerals consumption and reproduction is the basis for determination strategic goals ofthe energy resource base development.
Russia possesses significant oil resources. Meanwhile, initial oil reserves ofthe country have already been depleted by more than 50%. In
the European part ofRussia this figure amounts to 65%, in particular, in
the Urals and Volga regions it exceeds 70%. The level ofreserve depletion at large dynamically developed deposits approaches 60%.
Peculiarity ofthe remaining oil reserves structure, both at the
country level and ofmajor oil producing companies, is that 77% ofcurrent oil production comes from large deposits. provision with which
is810years. The share ofhard-to-recover reserves is constantly growing. Currently it reachs 30 to 65% for major oil producing companies.
Besides, newly prepared reserves are often concentrated in middle- and
small-scale deposits and are predominantly hard-to-recover.
Expected resources ofnatural gas are estimated at 164.2 trillion m3,
including 63.8 trillion m3 on the continental shelf ofthe Russian Federation. Proved balance reserves ofnatural gas ofindustrial grades
++1 amounted to 48 trillion m3 as of01 January 2008, including
6.9 trillion m3 on the continental shelf ofthe Russian Federation.
The structure ofgas resources in Russia is more favorable than that
ofoil. Nevertheless, the share ofcomplex and hard-to-recover reserves
tends to increase. The problems with gas resources development relate
to reduction in commercially developed high-yielding reserves embedded at shallow depth, complicated natural and climatic conditions and
remoteness ofprospective major gas producing centers from existing
62
centers ofgas industry development (the Eastern Siberia, Far East, Yamal Peninsula, continental shelf ofthe Arctic seas), the necessity to
develop significant reserves oflow-pressure gas, increase in the share
ofwet, condensate and helium-content gases in the structure ofexplored reserves, which require appropriate gas processing infrastructure for efficient development.
Gas reserves ofmajor exploited deposits in the Western Siberia
the main gas producing region ofthe country (deposits Medvezhye,
Urengoiskoye, Yamburgskoye) have been depleted by 6575%. Currently they are at the phase ofactively declining production.
The Strategy, taking into account current situation in the sphere
ofoil and gas reserves, existing programs for the period upto2030 and
terms oflicensing the subsoil use in the Russian Federation, as well as
on the targeted levels ofoil and gas production, provides for expanded
reproduction ofmineral resource base ofhydrocarbons by means ofexploration works. According to the estimates, cumulative increment
ofoil reserves in the amount ofabout 12 billion tons (it may reach 14 billion tons if measures aimed at increase in the rate ofoil recovery would
be successfully implemented) and gas reserves in the amount ofat least
16 trillion m3 may be provided at the expense ofgeological exploration
works by 2030.
Besides, current inferred reserves and resources ofdistributed subsoil fund in main oil and gas producing regions may provide reproduction ofmineral resource base not more than by 50% in the nearest
1015 years. The rest ofincrement will come from new deposits, including in new oil and gas producing regions and waters ofRussia. In
particular, the increment ofoil reserves required for achievement ofoptimal production levels in the Eastern Siberia and Far East is estimated
at1.8billion tons by 2020 and over 3 billion tons by 2030. This will require substantial increment ofreserves outside the zone ofthe oil pipeline Eastern Siberia Pacific Ocean.
Within the whole period upto2030 the Western-Siberian, Leno-Tungusskaya, and Timano-Pechorskaya oil and gas producing areas will be
the main regions ofoil and gas reserves increment. Prospecting, exploration and development ofoil and gas deposits on the continental shelf
ofArctic, Far Eastern and Southern seas will become the promising areas
of the Russian oil and gas industries resource base development.
Total initial recoverable resources ofhydrocarbons on the Russias
continental shelf amount to 90.3 billion tons ofcoal equivalent (which
consist of16.5 billion tons ofoil with condensate and 73.8 trillion m3
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ofgas). They are distributed along 16 large sea oil and gas producing
areas and basins. The major part ofthese resources (about 70%) falls
within the continental shelf ofthe Barents, Pechora and Kara seas.
The exploration degree ofinitial recoverable resources ofhydrocarbons on the Russias continental shelf is low and does not exceed 10% in
most regions. Meanwhile the exploration degree ofgas and oil resources on the continental shelf ofthe Caspian Sea reaches 15.7 and 15.9%
respectively, gas and oil resources on the continental shelf ofthe Sea
ofOkhotsk 14.4 and 17.9% respectively, gas resources on the continental shelf ofthe Barents Sea 15.5%.
The preparation ofhydrocarbon reserves in the Russian sector ofthe
Caspian Sea and on the continental shelf ofthe Barents, Kara seas and
the Sea ofOkhotsk is supposed to grow fast, taking into consideration
the geographical distribution ofexpected oil and gas resources, as well
as the attained level ofgeological and geophysical exploration.
The search ofnew oil and gas deposits will also continue in oil and
gas producing areas with declining oil production: the Volga-Urals and
North Caucasian areas, as well as within the Russian part ofthe Caspian oil and gas producing area. The volumes ofdeep-hole drilling for
oil and gas within the period upto2030 will exceed 70 million metres.
Russia possesses substantial coal resources over 4000 billion tons. In
particular, balance reserves as of01 January 2008 amounted to 272.6billion tons (193.3 billion tons ofgrades ++1, and 79.3 billion tons ofC2
grade), while off-balance reserves accounted to 50.2 billion tons.
Thermal coal constitutes the prevailing share ofthe resources
3641.9 billion tons (89%), and the share ofcoking coal is only 445.6 billion tons (11%).
The main part ofcoal resources is concentrated in the Siberia (64%),
Far East (30%), European part ofRussia and Urals (6%). The volume ofexplored coal reserves suitable for open-cut mining constitutes 117.6billion tons (61%), with prevailing share ofbrown coal 93.4 billion tons
(79.4%) as of01 January 2008. 99% ofthese reserves are concentrated in
the Siberia and Far East. The reserves ofcoking coal suitable for opencut mining amount to 3.2billion tons or 2.7% (predominantly the Kuznetsk and South Yakutia basins).
Solving the problem ofenergy deficient regions as well as provision
ofby-product-coking industry with valuable sorts ofcoal will require
improvement in solid fuel resource base exploration and reproduction
taking into account the increasing role ofcoal in the fuel and energy
balance.
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The expected resources ofuranium ofthe most proved categories 1

and 2 amount to 830 thousand tons, 60% ofwhich are concentrated in
the Siberian federal district.
Balance reserves ofuranium in Russia, suitable for development under
the current economic conditions amount to 547.8 thousand tons, including 216.2 thousand tons ofgrades ++1, and 331.6 thousand tons of2
grade, as of01 January 2008. Most ofthem (95%) are concentrated in the
Siberian and Far Eastern federal districts. Meanwhile, the possibilities
ofnatural uranium mining and production available in Russia do not meet
aggregate demand therein from the part ofnuclear power enterprises. The
difference between annual production ofnatural uranium and its total consumption is planned to be covered at the expense ofstock reserves and
reuse with concurrent transition to nuclear-fuel conversion in fast-neutron
reactors, as well as at the expense ofpurchase and production ofuranium
in the countries ofthe Commonwealth ofIndependent States.
The main ways to increase natural uranium production for the period upto2030 are the following:
development ofexisting enterprises and enterprises under
construction: Priargun Industrial Mining and Chemical
Association (the Zabaikalye Territory), Dalur (the Kurgan
Region), Khiagda (the Republic ofBuryatiya);
construction ofnew uranium mining enterprises: Elkon Ore
Mining and Smelting Plant (the Republic ofSakha (Yakutia)),
Uranium Mining Company Gornoye and Olovsky Mining and
Chemical Plant (the Zabaikalye Territory);
performance ofsubstantial amount ofgeological exploration
works, assessment ofreserves and newly found uranium deposits
for putting them into operation at the second and third phases
ofthe Strategy implementation.
At the first phase ofthe Strategy implementation geological exploration works in traditional energy producing regions will be promoted,
besides, all necessary conditions (regulatory, taxation, institutional,
etc.) will be created for the development ofthe resource base ofthe fuel
and energy complex in remote and hard-to-reach areas ofthe country,
including the Eastern Siberia, Far East, Yamal Peninsula and continental shelf ofthe Arctic seas. The Strategy contemplates creation ofthe
centralized and vertically integrated system ofmineral resources management aimed at maximum efficient and comprehensive subsoil use.
By the end ofthe first phase the ratio offuel and energy resources annual increment and the volume oftheir production will approach to 1.
65
At the second phase, the active development ofoil and gas industries mineral resource base will start in the Eastern Siberia and Far East,
shelf regions, including Russian sector ofthe Arctic, as well as on the
Yamal Peninsula, in the Gulfs ofOb and Taz, in the European North
and Caspian region. In the course ofgeological exploration works three
dimensional seismic methods will be widely used, technologies ofand
equipment for geological radioscopy will be created. Volumes ofgeological exploration works will substantially increase, their efficiency
will rise, which will make it possible to provide sustainable reproduction ofmineral resource base in the main sectors ofthe fuel and energy
complex.
At the third phase, the development ofnew energy producing regions will continue on the basis ofmodern exploration methods and
technologies, state-private partnership and attraction ofinvestments,
including foreign ones. Maintenance ofenergy production will require
substantial capital investments into the most advanced technologies in
the sphere ofgeological exploration and mining offuel and energy resources. Reduction in reserves offuel and energy resources in the currently leading energy producing regions will take place.
4. Oil complex
The strategic goals ofthe oil complex development are as follows:
stable, uninterrupted and economically efficient meeting
ofdomestic demand for oil and oil products;
active participation in meeting ofthe world demand for oil and
oil products, without prejudice to domestic demand and needs
offuture citizens generations;
provision ofstable revenues for the Russias consolidated budget
corresponding to the energy sector significance in generation
ofthe gross domestic product and export at the given phases
ofthe state energy policy implementation;
investment and innovative renewal ofthe oil complex aimed
at enhancement ofits energy, economic and environmental
efficiency.
The progress ofthe Energy Strategy ofRussia for the period
upto2020 implementation is characterized with the following features
in the stated field.
Oil production at anumber oflarge deposits has started, including
Verkhnechonskoye and Talakanskoye deposits. Active development
ofTimano-Pechorskaya oil and gas area was commenced. Annual oil
66
output there exceeded 25 million tons. Oil mining at shelf deposits

(projects Sakhalin-1 and Sakhalin-2) was launched.
New trunk oil pipeline systems were built, including the Baltic pipeline system with an annual carrying capacity of65 million tons, port facilities for transshipment and sea transportation ofliquid hydrocarbons
were constructed in the town ofPrimorsk and settlement Varandei.
Construction ofthe oil pipeline Eastern Siberia Pacific Ocean with
an annual carrying capacity of80 million tons was launched to provide
the oil complex development in the east ofthe country and diversification ofoil export destinations.
The volume ofoil refinery throughput increased from 173 million
tons in 2000 upto237 million tons in 2008, while the refining depth
increased from 70.8 to 72.6%.
In the sphere ofthe oil complex state regulation, the system
ofcustoms duties calculation pertaining to oil and oil products was
improved; it promotes export ofoil products and promptly reacts at
changes in the situation with world prices. As aresult, the export
ofoil products grew from 57 million tons in 2000 upto112 million
tons in 2008.
Measures ofantimonopoly regulation aimed at restraint and prevention ofmisuse by vertically integrated companies oftheir dominant
position and anticompetitive collusions on Russian domestic markets
ofoil products, have been actively applied.
Tax burden on oil complex enterprises was reduced, the mineral extraction tax and deposit development tax were differentiated depending on natural climatic conditions and development stage, the system
ofexcise duties was improved.
The following trends have to be taken into account at consideration
ofoil complex development prospects:
depletion ofmajor oil deposits in the Western Siberia and, hence,
necessity to develop oil resources on the continental shelf ofArctic
and Far Eastern seas, in the Eastern Siberia and Far East;
increase in the share ofhard-to-recover reserves (superviscous
oil, natural bitumen, etc.) in the structure ofmineral resource
base ofthe oil complex;
extensive involvement ofcombined oil and gas deposits with
multi-component composition into operation and related
necessity to utilize associated petroleum gas, methane, helium
and gas condensate;
increase in the cost ofhydrocarbons mining and transportation.
67
The main problems ofoil complex development include the following:

inefficient subsoil use (low rate ofoil recovery) and absence
ofcomplex technologies ofmining and economically efficient
disposal ofhydrocarbons (burning ofassociated petroleum gas);
low investment capacities ofoil companies caused by high tax
burden on the industry;
infrastructure restrictions for diversification ofoil export
destinations;
high degree ofmonopolization ofoil product markets at AllRussian, regional and local levels;
high degree ofdepreciation ofoil refining industry fixed assets;
low quality ofoil products.
In order to achieve the strategic objectives ofoil complex development the following principal goals must be realized:
provision ofexpanded reproduction ofoil resources at the expense
ofgeological exploration works and timely preparation ofdeposits
for operation both in traditional and new regions ofoil production;
development ofnew large oil centers contemplating oil production,
disposal ofassociated petroleum gas and development ofoil and
gas chemistry on the basis ofcombined oil and gas deposits with
multi-component composition, predominantly in the Eastern
regions ofRussia and on the continental shelf ofArctic and Far
Eastern seas;
improvement ofoil mining technologies, including introduction
ofmodern methods ofreservoir recovery increase for the purpose
ofincrease in oil-recovery rate;
development oftransport infrastructure, including pipelines,
aimed at increase in efficiency and diversification ofstructure
and destinations ofoil and oil products transportation;
oil refinery development aimed at increase in oil processing
depth and improvement ofoil products quality;
promotion ofdevelopment ofindependent structures in the field
ofproduction, storage, wholesale and retail ofoil products;
resource- and energy-saving, reduction in losses at all stages
oftechnological process in the course ofresource preparation,
oil production, transportation and processing.
Subject to accomplishment ofthe stated goals, the oil complex will
be able to completely satisfy external and internal requirements ofRussia for oil and oil products ofhigh quality within the entire period ofthe
Strategy implementation.
68
Oil production in the European part ofthe country will increase

mainly at the expense ofdevelopment ofoil reserves in the TimanoPechora area, on the continental shelf of the Arctic seas and in the Russian sector ofthe Caspian Sea, with concurrent reduction in mining in
the Volga region and in the Urals.
With respect to the Western Siberia, while stabilization and steady
reduction ofoil production will take place in the Khanty-Mansi Autonomous Area, in Yugra, the growth ofoil production will occur in the
Yamalo-Nenets Autonomous Area.
In the Eastern Siberia, commercial development ofoilfields is supposed in Vankorsko-Suzunskiy region in the north-western part ofthe
Kransnoyarsk Territory, along the route ofthe oil pipeline Eastern Siberia Pacific Ocean in the Kransnoyarsk Territory, Irkutsk Region and
Republic ofSakha (Yakutia) (Verkhnechonskoye, Talakanskoye, Srednebotuobinskoye, Yurubcheno-Tokhomskoye and other fields).
In the Far East production facilities at projects Sakhalin-1, Sakhalin-2 and others (the continental shelf ofthe Sakhalin Island) will be
operated.
One ofstrategic goals in the oil sector is the maximum possible utilization and saving ofassociated petroleum gas resources.
The Strategy contemplates that by the end ofthe first phase ofits
implementation 95% ofrecovered associated petroleum gas will be
efficiently used, in particular, by means ofprocessing thereof at gas
processing plants with separation ofgas into ethane, propane and
butane, and, if technology requires so, into butane isomers. This
problem is most important for new development regions in the Eastern Siberia, where resource base ofhydrocarbons is complex: not
only most oilfields contain oil and gas, but they also have amulticomponent composition.
Taking into consideration strategic significance and complex nature
ofthe stated goal, its solution will require acoordinated system ofmeasures using the following principal mechanisms ofthe state energy
policy.
Creating afavorable economic environment:
formation ofnecessary legislative support regulating, in
particular, issues ofpriority access to the wholesale market
ofelectric energy (capacity) produced at the expense ofassociated
petroleum gas, as well as priority right ofaccess to available
capacities ofgas transportation networks for suppliers ofthe oil
products: dry (residue) gas;
69
assistance in application offinancial flexibility mechanisms ofthe

Kyoto Protocol in the course ofimplementation ofassociated
petroleum gas utilization projects;
release from customs duties on machinery and equipment having
no Russian analogues for the purpose ofassociated petroleum
gas utilization;
provision ofthe opportunity ofaccelerated equipment depreciation
for the purpose ofassociated petroleum gas utilization.
norms:
introduction ofadditional indices for calculation ofpayment
for emissions ofharmful (polluting) substances produced at
associated petroleum gas burning at flaring units;
organization ofcontrol over rational utilization and accounting
ofvolumes ofburnt and dissipated associated petroleum gas;
determination ofrequirements to the level ofassociated
petroleum gas efficient utilization at granting rights for subsoil
use at sites containing oil and oil condensate deposits.
Supporting strategic initiatives:
monitoring ofactual and expected results ofimplementation
ofoil companies programs aimed at raising the degree
ofassociated petroleum gas utilization and timely taking required
synchronizing measures, including those using the principles
ofstate-private partnership;
reflection ofissues related to raising the degree ofassociated
petroleum gas utilization in program documents offederal and
regional levels, in particular, in the developing state program
ofenergy saving and energy efficiency raising;
state support in developing new technologies for associated
petroleum gas utilization and realization ofappropriate pilot
projects;
assistance in developing small and medium businesses in the
field ofassociated petroleum gas utilization;
development and promotion ofinternational cooperation in the
sphere ofimplementation and improvement ofbest practices in
associated petroleum gas utilization.
Oil chemical and gas chemical industries will be widely developing.
Large oil complexes comprising enterprises on production and refinery ofoil and associated petroleum gas, as well as oil chemical and gas
chemical facilities will be established in new oil-producing regions.
70
Oil refining will be developing at advanced growth rates. The refining depth will be increased from 72 upto83% by the end ofthe second
phase and upto8990% by the end ofthe third phase ofthe Strategy
implementation.
Oil refineries in Russia utilize practically all processes developed
by the world industry. However the ratio ofthe processes deepening oil
refinery and improving the quality offuel and the processes ofprimary
oil refining is substantially behind world indicators.
Thus, reconstruction and modernization ofoil refineries will be aimed
at priority development oftechnological complexes for deepening oil
refining and reduction in specific intensity ofoil consumption per unit
ofend products (catalytic cracking, hydro cracking, coking ofresiduals,
viscosity breaking, bitumen production, etc.), as well as at introduction
ofmodern technologies ofcatalytic reforming ofgasoline fractions, hydrotreater ofdiesel and jet fuels, isomerization and alkylation.
Primary oil refining facilities are planned to be expanded (Tuapse
Oil Refinery upto12 million tons per year, Kirishinefteorgsintez
by 12 million tons per year), besides, new oil chemical complexes are
to be constructed (the Republic ofTatarstan at least 7 million tons
per year, the Far East Primorskiy Oil Refinery 20 million tons per
year). Support ofmodernization, expansion ofcapacities and construction ofoil refineries and oil chemical complexes, independent from vertically integrated oil companies, are contemplated.
Doubtless priority ofdeep oil refining development is satisfaction
ofthe domestic market demand. However, the Strategy provides for optimization ofoil refining volumes inside the country (with export delivery ofa part ofoil products) and volumes ofcrude oil export (with priority delivery ofa part ofit to oil refineries situated abroad and belonging
to Russian companies).
Development ofpipeline transportation ofoil and oil products will
be performed adequately with the growth ofvolumes and diversification ofinternal and external deliveries ofliquid hydrocarbons. The
following tasks are planned to be accomplished: increase in the share
ofpipeline transportation ofliquid hydrocarbons in the entire volume
oftransportation ofoil, and, particularly, oil products; provision ofconditions for development ofnew oil-producing regions in the country;
provision ofbalance between required volumes ofoil transportation
and transport system capacity; as well as reduction in dependence
ofRussia on transit ofoil and oil products through the territories ofadjacent countries.
71
The following projects are the most important in the sphere ofdeve
lopment ofpipeline transportation ofoil and oil products:
completion ofconstruction ofthe oil pipeline Eastern Siberia
Pacific Ocean with an annual capacity of80 million tons;
construction ofthe oil pipeline Unecha Ust-Luga (the second
line ofthe Baltic pipeline system);
development ofoil and oil products export terminals in the ports
ofPrimorsk, Ust-Luga, and Nakhodka;
development ofoil-products pipeline system (driving uptothe
rated capacity ofthe oil-product pipeline Sever (North),
construction ofthe oil-product pipeline Andreevka Ufa
Subkhankulovo Almetyevsk Kstovo, construction ofthe
oil-product pipeline Yug (South).
Besides pipeline transportation ofoil and oil products, sea transportation ofliquid hydrocarbons will be developed, including transportation from coastal areas ofthe Russian part ofthe Arctic region.
In the sphere ofoil and oil products export the state aims at diversification ofcommodities structure and destinations ofexport predominantly at the expense ofthe eastern vector ofdeliveries development.
The Strategy contemplates increase in the share ofthe eastern destination in the structure ofliquid hydrocarbons export from 8% upto
2225% by the end ofthe third phase ofthe Strategy implementation.
Meanwhile, volumes ofoil and oil products export will remain stable
throughout the entire period ofthe Strategy implementation, with insignificant fluctuations. Annual levels ofliquid hydrocarbons export
will fluctuate within the range of315330 million tons.
Expansion ofRussian companies presence in foreign technological
chains from oil production to oil refining and distribution ofliquid hydrocarbons, increase in transit ofoil from adjacent countries through
the Russian territory, development ofnew marker sort ofRussian oil
REBCO as well as promotion ofinternational trade in it will become
strategic areas offoreign economic activity in the oil complex.
Necessary conditions for sustaining oil complex efficiency will be
provided on the domestic oil and oil products market at the expense
ofguaranteeing equal and transparent market environment for all business entities. High level ofcompetitiveness will be provided at the expense ofthe following:
promotion ofopen trade and development ofoil and oil products
exchange trade, including at the regional level;
72
determination ofprocedure for non-discriminatory access to

transport infrastructure;
elimination ofexcessive administrative barriers for oil exploration,
production, storage and transportation as well as for permits
obtainment for petrol stations construction and allocation ofland
plots for such construction.
Under conditions ofsharp decrease in world oil prices and (or) crisis
situations on financial markets the state will provide for necessary support for oil business by means ofstate guarantees provision for investments into the oil complex development, re-financing ofoil companies
liabilities, taxation optimization, for maintenance offinancial and economic sustainability ofRussian oil companies, paying aspecial attention to promotion ofsmall and medium oil business.
Energy saving in the oil complex will be implemented in the following principal fields:
oil production: reduction in oil consumption for technological
needs and losses, increase in oil recovery rate, optimization ofoil
wells working regime, as well as improvement ofcontrol and
accounting ofoil;
oil transportation: reconstruction ofpipeline facilities and
system organization oftechnological regimes oftheir operation,
reduction in oil losses, introduction ofautomated management
systems and telemetry, improvement ofoil-transfer facilities
technical state, as well as extensive introduction offloating-roof
storage tanks;
oil refining: enhancement ofthe oil recovery depth, comprehensive
utilization ofoil refinery gases, as well as automation ofoptimal
maintenance ofprocess flow regimes.
At the first phase ofthe Strategy implementation the Russian oil
complex will provide required volumes ofoil production and export as
well as increment ofcapacities oftrunk pipelines and export terminals
in accordance with the dynamics ofdomestic and external demand for
oil affected by the country recovery from the economic crisis. anumber ofkey urgent infrastructure projects ofdomestic and export importance will be accomplished, including the following:
oil pipeline Burgas Alexandrupolis;
second line ofthe Baltic pipeline system;
oil-product pipelines Sever (North) and Yug (South);
oil terminals in the ports ofPrimorsk, Ust-Luga and Nakhodka.
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Development ofexport infrastructure for oil transportation will enable Russia to diversify destinations ofexport deliveries and reduce
transit risks in the western direction. Construction ofRussian sea oil
terminals and port infrastructure for oil export will provide the country
with comprehensive export infrastructure (from awell to aport) and reduce dependence on other countries in this issue.
At the second phase ofthe Strategy implementation the Russian oil
complex will satisfy demand ofthe countrys economy under conditions
ofits qualitative restructuring in favor ofinnovative and less energyintensive industries. Annual production ofcrude oil will approach the
technological and economic maximum. Reduction in oil production in
the Tyumen Region, the main oil producing area ofthe country, will be
compensated by growth in the Eastern Siberia and Far East. Taking into
account the multi-component structure ofoil and gas deposits in the
region, increase in oil production will assist in large-scale development
ofthe complex ofoil chemical facilities ofnational significance there.
In order to increase the output and sales ofoil products with high
added value the key focus ofthe complex development will be generally concentrated at promotion ofoil refining and oil chemistry .
The trend towards stabilization ofoil export volumes will take place,
which will stimulate the expansion ofRussian oil transport infrastructure (pipelines, sea terminals) use for provision oftransit deliveries.
At the third phase ofthe Strategy implementation oil production will
reach its technological and economic maximum. Meanwhile:
export ofoil and oil products will tend to decrease;
development ofhighly technological oil chemical facilities and
energy services will be substantially intensified;
the Russian oil complex will actively use its capacities to provide
oil transit, production and export ofoil products with ahigh share
ofadded value.
5. Gas industry
The strategic objectives ofthe gas industry development are the following:
stable, uninterrupted and economically efficient satisfaction
ofdomestic and external demand for gas;
development ofthe unified system ofgas supply and its expansion
to the east ofRussia, enhancement ofinterregional integration
on this basis;
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improvement oforganizational structure ofthe gas industry

aimed at increase in its economic efficiency, development
ofliberalized gas market;
provision ofstable revenues for the Russias consolidated budget
corresponding to the energy sector significance in generation the
ofgross domestic product and export at the given phases ofthe
state energy policy implementation.
Giant Zapolyarnoe deposit was put into operation in the Nadym-PurTaz district ofthe Tyumen Region. Natural gas production at shelf deposits ofthe Sakhalin-1 and Sakhalin-2projects was commenced.
New gas pipeline systems are under construction. Yamal Europe
gas pipeline was completed, gas pipeline Goluboy Potok (Blue Stream)
was constructed, liquefied natural gas plant was put into operation on
Sakhalin Island. Construction ofgas pipelines Severniy Potok (Nord
Stream) and Northern Areas ofthe Tyumen Region Torzhok was
commenced. Decisions on the construction ofPre-Caspian gas pipeline
and Yuzhniy Potok (South Stream) gas pipeline were taken.
Active works on gasification ofthe Russian regions and construction
ofthe regional gas transportation and gas distribution infrastructure
are being performed.
Gradual and controlled liberalization ofdomestic gas market has
been launched. Experimental electronic platform working on the basis
ofstock-exchange technologies was established to trade natural gas.
About 10 billion m3 ofgas has been sold there.
While considering prospects ofgas industry development the following trends need to be taken into account:
depletion ofmain gas deposits in the Nadym-Pur-Taz district
ofthe Tyumen Region and, consequently, the necessity
ofdeveloping new gas-producing centers on the Yamal Peninsula
and continental shelf ofthe Arctic and Far Eastern seas, in the
Eastern Siberia and Far East;
increase in the share ofhard-to-recover reserves (low-pressure
gas) in the structure ofthe gas industry mineral resource base;
increase in costs ofnatural gas production and transportation;
development oftechnologies for production and transportation
ofliquefied natural gas.
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The main problems in the stated field include the following:

infrastructure restrictions ofpipeline gas transportation;
high transit risks ofgas export to Europe;
insufficient development ofgas-processing and gas chemical
industries;
underestimated regulated gas prices and insufficient liberalization
on the domestic market.
The following principal goals must be realized to achieve the strategic objectives ofthe gas industry development:
compensation ofdecline in gas output volumes at old deposits in
the Nadym-Pur-Taz district ofthe Tyumen Region (Yamburgskoye,
Urengoiskoye, Medvezhye deposits) by means ofputting into
operation new deposits in remote regions with complicated
natural, climatic and geological conditions; appropriate gas
transport infrastructure construction aimed at provision ofgas
deliveries onto the domestic market and diversification ofexport
destinations;
promotion ofgeological exploration works aimed at provision
ofexpanded reproduction ofmineral resource base in major gasproducing regions and on the continental shelf ofthe Russian
Federation, as well as at development ofgas deposits ofregional
and local importance;
in-time renovation ofequipment and pipes ofgas transportation
system excluding reduction in its capacity; further development
ofregional trunk and distribution pipeline infrastructure;
development ofproduction and export ofliquefied natural gas;
development ofgas-processing and gas-chemical industries
aimed at rational utilization ofvaluable fractions ofhydrocarbons
and associated petroleum gas;
gas market demonopolization, creation ofcompetitive
environment and establishment ofnon-discriminatory access to
gas industry infrastructure for all business entities.
Meanwhile, further increase in gas production requires significant
investments into production facilities and development oftransport infrastructure. It entails the necessity ofincrease in domestic gas prices.
Implementation ofmarket principles for gas pricing at the domestic
market will assist in elimination ofexisting disproportion between prices for compatible fuels (gas, coal, fuel oil), reduction in the share ofgas
in the structure ofenergy consumption and diversification ofthe fuel
and energy balance towards increase in the share ofcoal and non-fuel
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resources, as well as alignment ofthe fuel and energy balance structure

with the structure ofgeological energy reserves in the Russian Federation, and, ultimately, in enhancement ofthe countrys energy security.
Gas production will be developed both in traditional gas-producing regions, with the Western Siberia as the main one ofthem, in the
European North ofRussia, on the Yamal Peninsula, in new oil and gas
producing regions ofthe Eastern Siberia and Far East, as well as in the
Caspian region.
The Yamalo-Nenets Autonomous Area will retain its role ofthe major gas-producing region ofthe country for the period under consideration. Within the period upto2010, the compensation ofreduction in
gas production will be provided predominantly at the expense ofdevelopment ofnew deposits as well as ofprepared for exploitation horizons
and sites ofdeveloping deposits in the Nadym-Pur-Taz district ofthe
Tyumen Region.
New technological solutions and significant investment will be required for achievement ofhigh gas-recovery rates and maintenance
ofproduction level at deposits which are at the late stage ofdevelopment.
Within the period upon 2010, the forecasted volumes ofgas production are planned to be provided at the expense ofdevelopment ofdeposits on the Yamal Peninsula, the continental shelf ofthe Arctic seas,
including Stockman deposit, in waters ofthe Gulfs ofOb and Taz, as
well as in the Eastern Siberia and Far East.
26 deposits with proven gas reserves of10.4 trillion m3 were discovered within the Yamal Peninsula. Within the nearest 25 years, cumulative capital investments in the amount ofUS$166 to 198 billion will
be required for the development ofdeposits on the Yamal Peninsula
(Bovanenkovskoye, Kharasaveiskoye, etc.). The commencement ofgas
production is planned for the end ofthe first phase ofthe Strategy implementation; by 2030, the production will achieve 185220 billionm3.
Gas deposits put into operation in the Western Siberia will contain
wet gas and condensate. Thus, gas processing industry will be widely developed for the purpose ofutilization and transportation ofsuch gas.
Gas production in the Eastern Siberia and Far East will be developed on the basis ofKovyktinskoye gas-condensate deposit in the Irkutsk Region, Chayandinskoye oil-gas condensate deposit in the Republic ofSakha (Yakutia), hydrocarbon deposits in the Krasnoyarsk
Territory, as well as shelf deposits on the Sakhalin Island and in the
Western-Kamchatka sector ofthe Pacific Ocean. Development ofrich
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with helium (0.15 to 1%) gas deposits in the Eastern Siberia will require
the promotion ofhelium industry, including construction ofa number
oflarge gas processing plants and underground storages ofhelium
concentrate.
The following large gas-producing centers are planned to be developed there:
the Sakhalin gas-producing center on base ofthe Sakhalin shelf
zone deposits (projects Sakhalin-1 and Sakhalin-2) with
further development ofthe center at the expense ofrealization
ofprojects Sakhalin-3, Sakhalin-4, Sakhalin-5, and
Sakhalin-6;
the Yakutia gas-producing center on the base ofChayandinskoye
deposit with the prospective development ofadjacent deposits
Srednebotuobinskoye, Taas-Yuryakhskoye, Verkhnevilyuchans
koye and others;
the Irkutsk gas-producing center on the base ofKovyktinskoye
deposit with the prospective development ofYuzhnoKovyktinskaya license area and deposits ofthe north ofthe
Irkutsk Region;
the Krasnoyarsk gas-producing center on the base ofSobinskoPaiginskoye and Yurubcheno-Tokhomskoye deposits with the
prospective development ofOmorinskoye, Kuyumbinskoye,
Agaleevskoye and other deposits.
The prospective regional structure ofgas production by 2030 will be
as follows:
gas production in the European part ofRussia is planned to be
increased upto131137 billion m3 (against 46 billion m3 in 2005)
at the expense ofdevelopment ofthe Timano-Pechorskaya oil
and gas producing area and shelf deposits (first ofall, Stockman
deposit);
gas production in the Western Siberia is expected at the level
of608637 billion m3 at the expense ofdevelopment ofthe
deposits on the Yamal Peninsula and waters ofthe Gulfs ofOb
and Taz intended to compensate decreasing output ofold
deposits (Urengoiskoye, Medvezhye, Vyngapurovskoye and
Yamburgskoye deposits);
gas production in the Eastern Siberia and Far East will increase
upto132152 billion m3.
In the sphere ofgas transportation the unified system ofgas supply
will be further developed by means ofinclusion therein new facilities
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ofany proprietary forms (including those on the base ofparticipatory

interests). The system will be gradually expanded to the east ofthe
country in an economically reasonable manner.
The length oftrunk gas pipelines will be increased by 2022 thousand km by the end ofthe second phase and by 3035 thousand km by
the end ofthe third phase ofthe Strategy implementation, in particular,
at the expense ofnew export destinations. The existing trunk gas pipelines with the total length of20 thousand km will be reconstructed and
modernized by the end ofthe second phase, and with the total length
of40 thousand km by the end ofthe third phase ofthe Strategy implementation.
In the sphere ofnew export routes development the priority role is
assigned to the implementation ofthe Severniy Potok (Nord Stream)
project. Russian gas will be delivered to the European market via this
gas pipeline bypassing territories ofother countries.
Construction ofthe Yuzhniy Potok (South Stream) gas pipeline,
making the South-European gas transportation ring connection, will
also be ofgreat importance.
Gas pipeline from northern areas ofthe Murmansk Region with connection to the unified system ofgas supply near the town ofVolkhov is
planned for transportation ofgas from Stockman deposit to the northwestern areas ofRussia.
The construction ofmultiline gas transportation system with the
length of2400 km for transportation ofgas from the Yamal Peninsula to
the area ofUkhta compressor station and further to the town ofTorzhok
will become the most important project upon 2010.
Stage-by-stage construction ofthe gas pipeline system in the Eastern
Siberia and Far East for the purpose ofgas supply to the countries ofthe
Asia-Pacific region, first ofall, to the Republic ofKorea and China, with
the possibility ofconnection, should it be economically efficient, to the
unified system ofgas supply, will be performed in the context ofimplementing the program ofthe unified gas supply system formation in the
Eastern Siberia and Far East.
Along with pipeline gas transportation, projects in the sphere ofliquefied natural gas production and transportation, primarily aimed at
enhacnment ofRussias positions on the foreign market, will be dynamically developed in the country. Combination ofliquefied natural gas
deliveries with well-developed gas transport infrastructure will provide apowerful impetus for enhancement ofgas export efficiency with
concurrent diversification ofsales markets. This will make it possible
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toenter the markets, which are absolutely new for Russia, in particular,
those ofthe USA and the countries ofthe Asia-Pacific region.
Import ofgas from countries ofthe Central Asia, predominantly
to the countries ofthe Commonwealth ofIndependent States, will be
steadily developed. The volumes ofimport will be formed depending
on economic situation on foreign gas markets and the state ofthe fuel
and energy balance ofRussia.
In the sphere ofthe Russian gas export, performed mainly on the
basis oflong-term contracts, the volume ofgas supply to the European
market will be retained at the necessary level, while the eastern direction ofexport (China, Japan, the Republic ofKorea) will face amultiple
increase. Russian gas producing companies will take an active part in
development ofgas deposits in other countries (Algeria, Iran, countries ofthe Central Asia, etc.) and construction ofnew interregional gas
pipelines, in particular, in South Asia, as well as coordinate their export
policy with these countries.
Development ofthe gas market in the Russian Federation will be
based on provision ofequal business conditions to all gas-producing
companies. The sectors ofgas production and distribution are supposed to function on the market basis while state regulation will be
preserved in the sphere ofgas transportation. The procedure ofnondiscriminatory access ofmarket participants to gas transportation systems ofvarious levels and equal specific tariffs for gas transportation
will be provided.
Upon 2011, astage-by-stage transition to application ofmarket gas
pricing principles will be performed by expanding anon-regulated
market segment and forming market gas prices subject to payback
ofits production, transportation, consumer properties, demand and
supply, as well as required investments for the gas industry development.
Gasification ofurban and rural communities will be continued.
A wide network ofunderground gas storage facilities in the closest
possible proximity to consumers will be created; the capacities ofsuch
storage facilities will correspond to seasonal and daily irregularity
ofgas consumption, in particular, they will supply gas to electric power
plants in the regime ofthe real demand for electricity.
The use ofgas as engine fuel will increase, with appropriate development ofthe market thereof.
The state will use non-price instruments ofinvestment activity support in the gas industry (tax, credit, budget and other instruments), as
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well as regulate the upper limit ofgas prices for the population, for the
purpose ofreducing pressure on the domestic economy under the conditions ofinevitable growth ofdomestic gas prices.
Under the conditions ofsharp decrease in world prices for hydrocarbons and (or) crisis situations on the world financial market, the state
will provide support for gas companies by providing state guarantees
ofinvestments into the complex development, refunding ofliabilities
and optimization oftaxation.
Energy saving in the gas industry will be performed in the following
main areas:
gas production: reduction in gas consumption for technological
needs, optimization oftechnological facilities working regime,
improvement ofcontrol over and accounting ofgas, as well as
increase in recovery rate ofgas formations;
gas transportation: reconstruction ofgas transportation facilities
and system organization oftechnological working regimes
oftrunk gas pipelines, reduction in gas losses, introduction
ofautomated management systems and telemetry, improvement
ofengineering condition ofgas-transfer facilities, introduction
ofhighly efficient gas-turbine drives for gas-transfer facilities
with high performance index, as well as expansion ofgas-transfer
facilities with controlled electric drive use;
gas processing: increase in the rate ofworkflow heat utilization,
increase in the performance index ofgas-fired heat generating
units, as well as optimization and automation ofprocess flows;
underground gas storage: optimization ofbuffer gas volume,
reduction in formation gas losses, use ofnon-commercial gases
(nitrogen, fumes, etc.) as buffer gas volumes.
At the first phase ofthe Strategy implementation the Russian gas
industry will satisfy domestic and export needs ofRussian economy
for natural gas mainly at the expense ofexisting deposits exploitation
and putting new deposits into operation in the Nadym-Pur-Taz district
ofthe Tyumen Region. Meanwhile, active works on preparation and involvement into operation ofnew gas deposits on the Yamal Peninsula,
Eastern Siberia, Far East, and continental shelf ofthe Arctic seas will
be performed.
A number ofmajor urgent infrastructure projects ofinternational and
national importance will be accomplished, including the following:
Severniy Potok (Nord Stream) gas pipeline;
Northern Areas ofthe Tyumen Region Torzhok gas pipeline.
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Implementation ofthe stated infrastructure projects will prepare the

transport infrastructure for the commencement oflarge-scale development ofthe Yamal Peninsula. It will also reduce transit risks ofRussian
gas export to Europe and provide for the opportunity to expand the
transit ofthe Central Asian gas to Europe via the Russian gas transportation system.
Along with the development ofthe pipeline infrastructure, the system ofunderground gas storage facilities will be developed. Operational gas reserves in main gas-consuming regions will be created in order
to minimize risks offuel supply in the periods ofpeak demand.
Export ofRussian liquefied natural gas to the countries ofthe AsiaPacific region will be commenced from the liquefied natural gas plant
built on the Sakhalin Island.
New gas processing and gas chemical complexes are planned to
be constructed in the Western and Eastern Siberia to provide complex
processing ofhydrocarbons and production ofoutput with high added
value.
On the domestic market the controlled liberalization based on the
principle ofequal profitability ofgas supply to the domestic market and
for export will be pursued dynamically. Stock-exchange trade in natural gas based on transparent and non-discriminated access ofall business entities to gas transport infrastructure will be developed.
At the second phase ofthe Strategy implementation the Russian
gas industry will completely satisfy the needs ofthe Russian economy
under conditions ofthe post-crisis development. The geography ofgas
production and export will be substantially changed. The share ofnew
gasproducing regions (the Yamal Peninsula, continental shelf ofthe
Arctic seas, Eastern Siberia and Far East) in the total gas production in
the country will exceed aone third. The strategic goal ofdiversification
ofthe Russian gas export destinations and commodities structure will
also be achieved at the expense ofthe eastern export destination development and construction ofnew terminals for liquefied natural gas
production.
Putting into operation ofStockman deposit and deposits in the Gulfs
ofOb and Taz, commencement ofthe Irkutsk, Krasnoyarsk and Yakutia
gas centers development, as well as the active stage ofthe gas transportation system construction in the east ofthe country are planned at the
second phase ofthe Strategy implementation.
Russia will augment efforts for main regional gas producing
centers (countries ofthe Central Asia, Iran) consolidation on the
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basis ofits gas transport infrastructure. Russia will seek to establish the Eurasian integrated gas transportation system for provision ofexport and transit cross-flows between Europe and Asia (in
particular, the Yuzhniy Potok (South Stream) gas pipeline will be
completed).
At the third phase ofthe Strategy implementation, the Russian gas
industry will be developed under the changed conditions ofdomestic
and external gas demand caused by transition ofthe world economy
and energy sector to the new technological level characterized with
high energy efficiency ofbusiness and extended use ofnon-hydrocarbon energy resources.
Under this conditions development ofthe Russian gas industry
will be aimed at expansion ofthe sphere ofusing gas in the economy
not only as an energy carrier, but also as avaluable chemical product.
Highly technological gas chemistry and production ofsynthetic liquid
fuel on the basis ofgas will become widely developed.
As for the territory ofRussia, gasification ofregions will be accomplished, works on expansion ofthe eastern gas transportation system
will be continued with the possibility ofconnection, should it be economically efficient, to the unified system ofgas supply. Independent
producers will supply over one fourth ofgas production in the country,
while the share ofthe open joint stock company Gazprom will be reduced in proportion to the resource base ofthe company at the stated
period. Development ofdeposits ofthe Arctic seas in the east ofthe
country will be commenced. Technological conditions for production
and industrial use ofgas-hydrates will be created. Russian pipeline
infrastructure will become an integral part ofthe power bridge between Europe and Asia, and Russia will become the key center ofits
management.
6. Coal industry
The strategic objectives ofthe coal industry development are the
following:
reliable and efficient satisfaction ofdomestic and external
demand for top grade solid fuel and products ofits processing;
provision ofmarketability ofcoal products under the conditions
ofdomestic and foreign markets saturation with alternative
energy resources;
increase in the level ofoperational safety ofcoal mining and
reduction in its harmful impact onto the environment.
83

The restructuring ofthe coal industry providing its transformation
from aplanned unprofitable industry into an efficiently operating one
has been generally completed.
The program ofunprofitable and unpromising coal mines closure
is approaching accomplishment. New highly efficient coal production
facilities are under construction, which leads to reduction in coal production costs, growth oflabor productivity and reduction in industrial
injury rate.
State subsidizing ofthe coal industry has ceased. Development
ofthe coal industry is performed mainly at the expense ofinternal
funds ofbusiness entities and borrowed financial resources (about one
third ofthe total volume ofinvestments).
Commissioning ofnew coal mining facilities, mainly in the Kuznetsk basin, resumed after alengthy pause.
The balance increment ofcoal mining facilities exceeded 80 milliontons for the last 5 years, while the balance increment ofcoal beneficiation facilities exceeded 40 million tons.
The volume ofcoal processed at coal beneficiation facilities increased from 85 million tons (30%) to 127 million tons (40%). The volume ofthermal hard coal beneficiation increased by afactor of2.7.
Coal export increased from 60.7 upto97.5 million tons (by afactor
of1.6).
The following trends are to be taken into account at consideration
ofthe coal industry development prospects:
depletion ofthe potential for development ofexisting coal basins
in the European part ofthe country and in the Urals;
slowing down ofthe rates ofnew coal deposits development;
increase in coal mining and transportation costs.
The main problems in the stated sphere include the following:
reduction in domestic demand for thermal coal;
dependence ofcoal companies on the amount ofexport
revenues;
high share oftransport costs in the price ofcoal products;
insufficient rates offixed assets renovation, high depreciation
level ofequipment and insufficient amount ofinvestments for its
modernization;
low quality ofcoal products as compared with the world level;
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insufficient investment for large-scale infrastructure projects

realization and development ofresource and production potential
ofthe coal industry;
insufficient innovative potential ofthe coal industry, poor
development ofRussian coal machinery manufacturing and
resulting growing dependence ofthe industry on the import
oftechnologies and equipment;
high level ofsocial tension in coal mining regions caused by low
employment ofthe population, deficit and low quality ofsocial
services, as well as high injury rate in the industry and general
environmental problems;
growing deficit ofskilled workforce.
In order to achieve the strategic objectives ofthe coal industry development the following main goals must to be realized:
the program ofunprofitable and unpromising coal mines closure
completion;
provision ofsustainable and rational reproduction ofthe mineral
resource base ofthe coal industry;
rationalization ofthe structure and regional allocation
ofproduction facilities for coal mining and beneficiation
providing efficient use ofthe resource potential ofthe
industry;
transport and port infrastructure development aimed at
transportation ofcoal cargo according to economically justified
tariffs and diversification ofdestinations oftheir deliveries;
increase in efficiency ofstate regulation processes and processes
ofcorporate management in the coal industry providing
sustainability ofcoal enterprises development and promoting
growth oftheir competitiveness;
enhancement ofefficiency ofcoal mining, beneficiation and
processing by improving technologies and equipment used, as
well as introducing advanced organizational solutions;
production ofhigh-quality end products (synthetic liquid fuel,
ethanol and other products ofcoal chemistry with high added
value), complex use ofcoal and associated resources, including
coal-bed methane;
intensification ofnature conservation measures in the industry;
provision ofcoal companies with qualified specialists targeted
at long-term labor relationships and development ofprofessional
career.
85
Coal mining development is contemplated in the main coal basins

Kuznetsk and Kansko-Achinsk basins. Coal mining will be developed
on new deposits in the Eastern Siberia and Far East (Urgalskoye, Elegestskoye, Elginskoye, Apsatskoye deposits) alongside with the main coal
basins in medium and long-term perspecitve. Furthermore, should the
economic efficiency be proved, coal mining can be developed at Seidinskoye (the Republic ofKomi) and Sosvinskoye (the Khanty-Mansi
Autonomous Area Yugra) deposits, as well as in the Bering coal basin
(the Chukot Autonomous Area).
For the purpose offurther development ofthe industry export potential the Strategy provides for construction ofrequired port infrastructure (the ports ofVostochny, Vanino and Ust-Luga, the Murmansk
deep-water port) and construction ofnew ports with high-capacity coal
terminals, including ports on the Black Sea coast, and, should the economic efficiency be proved, on the North Pacific coast.
The increase in the share ofcoal in the fuel and energy balance, contemplated in the context ofthe policy ofthe rational fuel and energy
balance promotion, will require, alongside with creation ofconditions
for efficient interfuel competition, the optimization ofcoal production
costs with simultaneous improvement oftaxation system in the industry and application offlexible tariff regulation in railroad coal transportation.
The improvement ofthe economic regulation system in the coal industry contemplates the following:
transition to the taxation system based on the rent principles;
tax burden rationalization in the industry;
exemption from customs duties on machinery and equipment for
the coal industry having no Russian analogues;
application ofstate-private partnership mechanisms including
subsidising apart ofinterest rates on credits raised in Russian
financial institutions, aimed at promotion offixed assets
renovation in the industry, formation ofnew coal-producing
centers, implementation ofinnovative projects (development
ofclean coal technologies, standardized coal fuel, coal chemical
production facilities, coal-bed methane production) and
development ofrailroad and port infrastructure;
improvement ofthe railroad tariff regulation system for coal supply
to domestic and foreign markets; including its correlation with
market trends ofcoal prices and the costs ofcoal transportation
by sea;
86
development ofdirect and long-term contracts providing, among

other issues, privileged tariffs for high-grade thermal coal
transportation for the use at Russian thermal power plants;
establishment ofa mandatory procedure for aliquidation fund
formation at coal producing organizations;
rational imposition ofcustom duties on imported coal;
development ofexchange trade in coal products.
Improvement ofthe institutional structure ofthe industry and processes ofcorporate management involves the following:
establishment ofa leasing company dealing in provision
ofhighly technological mining, transportation and beneficiation
equipment;
enhancement ofthe coal business transparency, including
introduction ofinternational accounting standards and
harmonization ofthe structure ofvertically integrated
companies;
development ofservice and ancillary enterprises (outsourcing) for
provision ofmaintenance to the main business ofcoalproducing
companies, including establishment ofspecialized companies
performing acomplex ofresearch, design and commissioning
works, in particular, in the sphere ofmine degasifying, while in
the future the share ofoutsourcing in expenditures for mining
ofone ton ofcoal shall be brought upto3035%.
Improvement ofthe technical regulation system in the industry involves the following:
tightening ofregulatory requirements to provision ofsafety and
comfortable working environment at coal enterprises, including
development ofnew regulatory documents in the sphere ofsafety
ofthe equipment employed, as well as individual protection
means for miners and protective systems applied in explosive
environment;
regular technical audit offixed assets ofcoal producing
companies;
development and introduction oftechnical regulations tightening
requirements to the quality ofcoal fuel, including establishment
ofquality standards pertaining to different types ofcoal
consumed, organization ofproduct certification, introduction
ofinternational quality standards at enterprises.
87
Regulatory requirements to coal industry entities pertaining to environment protection are supposed to be brought in line with the world
standards.
Measures on enhancement ofsocial protection ofemployees and
the quality oflabor relationships in the coal industry are planned to
be performed, including development ofsocial standards, setting-up
ofthe personnel compulsory insurance system at coal mining enterprises, as well as further improvement ofinformation and analytical
support in the coal industry allowing performance of, among other
issues, comprehensive monitoring ofthe situation in the industry.
At the first phase ofthe Strategy implementation the following measures are planned to be fulfilled in the coal industry:
realization ofa complex ofprogram measures aimed at
stabilization ofthe situation in the coal industry under the
conditions ofreduction in coal production;
completion ofthe industry restructuring;
technical re-equipment and intensification ofcoal production;
augmentation ofcoal beneficiation;
reduction in accident and injury rates at coal mining facilities;
further development ofexport potential ofthe industry.
The second phase ofthe Strategy implementation pertaining to the
coal industry development contemplates formation ofnew coal-producing centers at new coal deposits with favorable mining and geological conditions; equipment ofthe coal industry enterprises with highly
productive machinery and technologies meeting world environmental
standards; elimination ofsystem restrictions at coal products transportation to domestic and foreign markets; development ofthe outsourcing
system; achievement ofthermal hard coal maximum processing taking into consideration domestic market requirements; implementation
ofpilot projects on the basis ofRussian technologies ofhigh-level coal
processing and coal-bed methane production.
The third phase ofthe Strategy implementation pertaining to the
coal industry development contemplates ultimate increase in labor
productivity with meeting the world standards in the sphere ofindustrial safety, labor protection and environmental safety in the
course ofcoal mining and beneficiation; commercial output ofhighlevel processing coal products (synthetic liquid fuel, ethanol, etc.)
and associated resources (methane, underground waters, construction materials).
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7. Electric energy industry

The strategic objectives ofthe electric energy industry development
are the following:
provision ofenergy security ofthe country and its regions;
meeting ofdemands ofthe economy and the population for
electricity (capacity) at affordable competitive prices providing
return on investments in the electric energy industry;
provision ofreliability and safety ofoperation ofthe Russian
electricity supply system under normal and emergency
conditions;
investment and innovative renovation ofthe industry aimed
at provision ofhigh energy, economic and environmental
efficiency ofelectricity production, transport, distribution and
consumption.
Over the past period since the commencement ofimplementation
ofthe Energy Strategy ofRussia for the period upto2020, the demand
for electricity was growing at higher rates as compared with the forecasts, due to the higher rate ofthe Russian economy growth. Meanwhile, commissioning ofnew facilities in the electric energy industry
was substantially behind the forecast contemplated by the stated document, and had not fully satisfied the needs ofgrowing economy.
Within this period, the first phase ofthe industry reformation was
completed: the unified generating company which possesses ofand
manages nuclear power plants the Open Joint-Stock Company
Concern for the Production ofElectrical and Thermal Energy at Nuclear Power Plants was established; the Open Joint Stock Company
RAOUES ofRussia was liquidated and agroup ofindependent companies was established on its basis, including 6 wholesale generating
companies, 14 territorial generating companies, the Open Joint-Stock
Company Federal Grid Company ofUnified Energy System (JSC
FGC UES), the Open Joint-Stock Company RusHydro, the Open
Joint-Stock Company System Operator ofUnified Energy System, the
Open Joint-Stock Company Interregional Distribution Grid Companies Holding, the Open Joint-Stock Company RAO Energy Systems
ofthe East (for management ofthe Far Eastern electric energy industry), the Open Joint-Stock Company INTER RAO UES (for export
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and import ofelectricity), energy sales companies, as well as anumber

ofresearch, design, service and repair organizations.
The commercial infrastructure ofthe wholesale market ofelectricity
(capacity) was established. acommercial operator ofthe stated wholesale market the Open Joint-Stock Company Administrator ofTrading System and aself-regulated organization integrating subjects
ofthe electric energy industry and major consumers ofelectricity and
heat were set up.
The process ofcompetition promotion on the wholesale market
ofelectricity (capacity) was launched; it involves gradual retreat
from state regulation ofprices for electricity and transition to market pricing for all consumers, with the exception ofthe population,
within the price zones ofthe stated wholesale market (ultimate elimination ofthe state regulation ofprices is supposed to have been accomplished by 2011).
The following trends have to be taken into account at consideration
ofthe prospects ofthe electric energy industry development:
change ofgeography ofelectricity consumption in the country
involving shift ofelectricity consumption centers towards
eastern regions ofthe country and the cities ofthe European part
ofRussia;
growth ofseasonal and daily peak loads in the Unified energy
system ofRussia.
The main problems in the stated sphere include the following:
deficit ofgenerating and grid capacities in anumber ofregions
ofthe country;
absence ofelectric grid the Siberia Urals Center with
transfer capacity enabling the efficient use ofthe Siberian water
and fuel energy resources, realization ofeffects oflatitudinal
extent ofthe Unified energy system ofRussia and other system
effects;
non-optimal structure ofgenerating capacities caused by
insufficient amount ofsemi-peak and peak-load flexible
generating plants;
reduction in reliability ofelectricity supply caused by high level
ofdepreciation offixed assets and non-availability ofrequired
investments for their large-scale and timely renovation;
considerable
technological
backwardness
in
creation
and development ofmodern combined heat and power,
environmentally friendly coal and power grid technologies;
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low energy and economic efficiency ofthe industry (low

performance index ofmost thermal power plants, high level
oflosses in electric grids, non-optimal load ofgenerating
capacities in the Unified Energy System ofRussia, in particular,
occurence ofblocked capacities);
extremely high dependence ofthe electric energy industry on
natural gas;
absence offull-scale competitive electricity (capacity) market;
insufficiency ofinvestment resources for development ofelectric
grid infrastructure aimed at connection ofcapacity ofnew
generating objects and technological connection ofconsumers
to electric grids;
cross-subsidization between groups ofelectricity consumers and
between electric and thermal power on the domestic market.
The following principal goals must be realized to achieve the strategic objectives ofthe electric energy industry development:
balanced development ofgenerating and grid capacities
providing the required level ofelectricity supply reliability both
in the country and in its separate regions;
further development ofthe Unified Energy System ofRussia,
in particular, at the expense ofconnecting and uniting isolated
energy systems;
expanded construction and modernization offixed assets
ofthe electric energy industry (electric power plants, electric
grids) aimed at satisfaction ofdemands ofthe economy and the
population for electricity;
development ofcompetitive environment on retail markets
ofelectricity, provision ofeconomic validity ofprices and tariffs
for respective goods and services;
advanced development ofnuclear, coal and renewable electric
energy industry (including hydraulic electric energy industry)
aimed at reduction in the industry dependence on natural gas,
as well as at diversification ofthe fuel and energy balance ofthe
county;
expanded introduction ofnew environmentally-friendly and
highly efficient technologies ofcoal burning, combined cycle
generating units with high performance index, controlled
electric grids ofnew generation and other new technologies for
enhancement ofthe industry efficiency;
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provision ofsurvivability, regime reliability, safety and

controllability ofpower grids, as well as electricity ofrequired
quality;
development ofsmall-scale power generation in areas
ofdecentralized electricity supply at the expense ofenhancement
ofefficiency oflocal energy resources consumption, development
ofelectric grid facilities, reduction in the volume ofconsumption
ofdelivered light oil products;
development and implementation ofa price control mechanism
at the expense oftechnological innovative development ofthe
industry, reduction in expenditures on construction ofgenerating
and grid capacities, development ofcompetition in the electric
energy industry and adjacent industries, as well as at the expense
ofcreating the state system ofmanagement ofthe electric energy
industry development;
reduction in adverse effect ofthe electric energy industry on the
environment by applying the highest technologies.
Substantial growth (by afactor of22.5) ofelectricity production
on the basis ofnuclear and renewable energy is forecasted in the context ofimplementation ofthe strategic initiative on non-fuel energy
development. In general, the share ofnon-fuel energy in the structure
ofelectricity production is planned to be increased by the end ofthe
third phase ofthe Strategy implementation from about 32% (2008) to
at least 38%. Detailed paths and relative rates ofdevelopment ofeach
ofthe specified non-fuel components at various phases ofthe Strategy implementation are subject to adjustment in appropriate program
documents, first ofall, in the Master Plan for Allocation ofthe Electric
Energy Facilities.
Prospective levels ofelectricity production are determined by estimated dynamics ofdomestic demand for it, which will be substantially
ahead ofthe growth ofdemand for primary energy. The rates ofelectricity consumption growth will be determined by regional strategies
ofsocial and economic development, due to which they will be substantially higher in the Eastern Siberia and Far East than average rates in
Russia.
In accordance with the domestic demand estimations, requirements
ofthe countrys energy security provision and enhancement ofelectricity supply reliability, the regional structure ofgenerating capacities
will be formed in the following way.
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In the European part ofRussia:

nuclear power plants with increase oftheir share in the base
part ofelectric load pattern; synchronization ofcommissioning
ofnew nuclear power units with hydroelectric pumped storage
power plants;
thermal power plants with replacement ofgas-fuel-oil steam
power generating units by steam-gas units and decommissioning
ofold equipment. The replacement ofsteam-power units by
steam-gas units will be supported by economic measures,
including imposition ofpayment for carbon dioxide emissions
and direct prohibition ofoutdated equipment use, which fails to
meet modern technological and environmental standards;
steam-gas, gas-turbine and modernized steam-turbine combined
heat-and-power plants ofvarious capacities, including block
stations running on gas and partially on coal (where coal is the
designed fuel);
peak-load hydroelectric pumped storage power plants and gasturbine units.
Meanwhile, generation in the semi-peak part ofload pattern will
be provided by existing thermal power plants (subject to modernization), hydroelectric power plants (under construction) in the Northern
Caucasus with partial removal ofload from the least energy efficient
thermal power plants. Upon completion ofconstruction ofhigh-voltage
electric transit in the direction ofSiberia Urals Center, the capacity ofthe Siberian power plants transmitted by backbone lines ofsuper
high voltage may take part (as far as it is justified by economic efficiency) in meeting requirements ofpeak loads.
In the Siberia and Far East:
hydroelectric power plants, both existing and under construction,
for meeting requirements ofall zones ofelectric load pattern,
with predominance oftheir capacities in semi-peak and peak
parts ofload pattern;
thermal power plants running mainly on coal fuel ofthe
Kuznetsk and Kansko-Achinsk Basins, as well as the Irkutsk
Basin, Transbaikal and Far Eastern deposits (the use ofthermal
gas-fired power plants is only envisaged in these regions for
combined heat-and-power plants in large gasified cities for
reasons ofenvironmental pressure reduction);
development ofthermal gas-fired power plants in regions with
large deposits ofnatural gas (the Khanty-Mansi Autonomous
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Area Yugra and Yamalo-Nenets Autonomous Area), including

with the use oflow-pressure gas reserves left at exhausted
deposits;
use ofenergy ofnuclear sources ofhigh, medium and low capacity
in the areas oftheir potential competitiveness (the Tomsk Region,
High North, Far East, etc.);
development ofsmall-scale energy production on the base
ofrenewable energy, including by replacing local diesel
generation.
The Strategy provides for individual directions ofprospective development for the thermal, nuclear and hydraulic electric energy industry, as
well as for the Unified energy system ofRussia and electric grid complex.
Thus, in the thermal electric energy industry the strategic area
ofthermal coal-fired power plants advanced development will be realized, especially in the Eastern Siberia and Far East.
As aresult, the share ofcoal in fuel consumption by thermal power
plants will be increased by the end ofthe third phase ofthe Strategy
implementation from 26 to 3436%, and the share ofgas, on the contrary, will be reduced from 70 to 6062%.
The prospects ofnuclear electric energy industry are based on the
current situation in construction ofnuclear power plants, as well as on
the following provisions:
in the European part ofRussia, under the conditions ofrising
prices for organic fuel, nuclear power plants with enhanced
security make it possible to close the energy balance, saving
organic fuel;
the development ofnuclear electric energy industry provides
for elaboration ofmore advanced nuclear technologies enabling
energy problems ofmankind to be solved in the future;
the development ofnuclear electric energy industry requires
development and implementation ofmeasures aimed at leveling
load pattern by means ofeconomic incentives for motivating
consumers for more equal use ofelectricity by hours ofthe day in
the regions ofnuclear power plants activity, taking into account
their use in base regime, as well as their parallel operation with
hydroelectric pumped storage power plants.
The main goal ofhydraulic electric energy industry development
for the entire period ofthe Strategy implementation is further development ofrich hydraulic resources ofRussia correlating with demand for
electricity and regimes ofits consumption.
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The predictive assessment ofelectricity production at hydroelectric

power plants is based on the following assumptions:
increase in electricity production at hydroelectric power plants
in the European part ofRussia will be moderate, mainly because
ofcommissioning hydroelectric power plants in the Northern
Caucasus and implementation ofthe program ofhydroelectric
pumped storage power plants construction required for regime
(daily) regulation ofenergy system capacities. Increase in capacity
and electricity production at existing hydroelectric power
plants is predicted, mainly at Cheboksary and Nizhnekamsk
hydroelectric complexes, at the expense ofthe rise in reservoir
levels uptoprojected reference marks;
increase in electricity production in the Siberia and Far East
will be determined by engineering and economic indicators
and competitiveness ofhydroelectric power plants compared
to thermal coal-fired power plants, their environmental impact
and possibilities to cover load pattern. Potential to achieve the
multiplicative effects ofcommissioning new hydroelectric
facilities connected with creation on their base ofindustrial
clusters consumers ofelectricity, produced at hydroelectric
power plants, will also be ofgreat importance in these regions.
Development ofthe following large backbone hydroelectric complexes may become the principal direction ofthe abovementioned multiplicative effects achievement under the appropriate economic and
environmental justification:
Nizhneangarsk hydroelectric complex;
South-Yakutia hydroelectric complex comprising several
hydroelectric power plants on the rivers ofUchur, Timpton,
Aldan and Olekma;
Vitimsk hydroelectric complex;
Nizhneeniseisk hydroelectric complex on the base ofthe Evenki
hydroelectric power plants with the capacity of12 million kW.
Electricity, produced at these hydroelectric complexes will be used
for development ofsubstantial local natural resources, creation ofthe
regional mining and processing industries, and will be transmitted to
the Urals, European part ofRussia and industrial regions ofthe Siberia
and Far East via electric power transmission lines ofdirect and alternate super high voltage current constructed for this purpose.
Specific development ofthese or those generation sources will be
determined by their relative engineering and economic indicators, conENERGY STRATEGY OF RUSSIA for the period up to 2030
95
ditions offuel supply, nature (scale and structure) ofenergy consumption, environmental and social factors. Small-scale energy production
and decentralized electricity supply with active use ofall kinds oflocal
and secondary energy resources will be developing, especially in regions with low load density.
In general, as aresult ofthe development ofgeneration facilities:
by 2030, gas-fired generation facilities will be represented mainly
by steam-gas units with performance index of5355%, gasturbine units or, if necessary, the combination ofthe latter with
awaste-heat boiler;
coal-fired generation facilities will be represented by units
running on supercritical steam parameters with performance
index from 46 to 55% (in the case ofhigh-quality high-calorific
coal use), units equipped with boilers with circulating fluidized
bed, boilers with low-temperature rotation, and acertain number
ofunits running on overcritical steam parameters. Units with
coal gasification and energotechnological units will also be
developed. The total average performance index ofcoal-fired
generation facilities will be about 41%.
Nuclear power plants with water-cooled reactors, fast-neutron reactors with sodium coolant, demonstration reactors with lead and leadbismuth coolants, as well as high-temperature nuclear gas-cooled reactors will operate in the nuclear electric energy industry.
Hydroelectric power plants ofvarious capacities, playing astrategic role and participating in provision ofload pattern satisfaction, are
supposed to be widely used, with concentration thereof in the regions
ofthe Siberia and Far East.
The energy sector based on renewable energy will be developed, in
particular, in the form ofsmall hydroelectric power plants, solar energy
units, geothermal power plants and heat supply units, bio-energy and
wind units, waste-burning and waste recycling energy complexes in
large cities. The usage oftide power is possible.
Heat output will be concentrated at central heating stations with
reduction oftheir role in heat supply at the expense ofdevelopment ofco-generation systems (a gas-turbine unit with awaste-heat
boiler) and autonomous heat supply units. In 2030, the share ofheat
produced at central heating stations in the centralized heat supply
systems will be reduced from 43 (2005) to 35%. This niche will be
occupied by gas-turbine units at central heating stations and autonomous units.
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Units ofdistributed electricity generation in the form ofgas-turbine units and combination thereof with awaste-heat boiler, which
will replace existing boiler-rooms, will be widely developed. The
stated units with acapacity of10 kW to 6070 MW will exercise the
function ofboth local power supply sources and sources ofvariable
part ofthe load pattern satisfaction, thus increasing the installed capacity use factor ofmost powerful energy units. The share ofdistributed generation may achieve 15% ofelectricity production at thermal
power plants.
Thus, in 2030, generation facilities will consist ofpower units using
advanced world technologies and operating them efficiently.
The Unified energy system ofRussia will be developed both by
means ofintegration ofnow isolated energy systems and energy complexes, and by means ofdevelopment ofintersystem and intrasystem
electric grids ofall voltage classes, in particular for electricity export.
For the purpose ofcontrollability enhancement and provision
ofguaranteed reliability offunctioning ofelectric power systems, flexible electricity transmission systems will be widely introduced; besides,
complexes ofautomated emergency protection and dispatching control will be improved. Intersystem direct and alternative current power
transmission lines for electric power and capacity transportation in the
amounts not exceeding reliability requirements ofthe Unified energy
system ofRussia operation from energy-redundant to energy-deficient
regions will be constructed.
The following is supposed to be provided in the sphere ofelectric
grid complex development:
optimization ofconfiguration and increase in transmission
capacity ofbackbone and distribution electric grids enabling
efficient functioning ofthe Unified energy system ofRussia and
systems ofdistributed electricity generation with high indicators
ofoperation reliability;
reduction in depreciation rate ofelectric grids to the average level
ofthe developed countries, including at the expense ofquality
renewal ofequipment stock ofelectric power substations;
reduction in losses in electric grids and enhancement ofelectricity
transportation efficiency, including at the expense ofwide
implementation ofsemi-conductors made from new composition
materials increasing their current-carrying capacity and the
time ofworking life, as well as at the expense ofcreating systems
ofautomated accounting and regulation in electric grids.
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Conditions will be provided for private investments attraction into

the distribution electric grid complex in the amount sufficient for modernization and reconstruction ofelectric grids and provision ofreliability ofelectricity supply to consumers for along-term period, development ofelectric grid infrastructure, including with the purpose
ofprovision ofintersystem power exchange and assistance in economic
growth ofthe relevant territories. Administrative methods ofmotivation
ofgrid companies to raise their efficiency will be replaced by economic
methods; besides, mechanisms ofdistribution grids management consolidation in the regions ofthe Russian Federation will be developed,
including with the use oflicensing the activity on electricity transmission and distribution.
Furthermore, formation ofthe wholesale and retail electricity (capacity) markets will be completed in the electric energy industry,
the appropriate regulatory and institutional conditions for activity
ofsales and power service companies will be provided, including the
following:
change in the procedure ofaccounting and reimbursement
ofexpenses on technological connection to electric grids;
inclusion ofinvestment component into the tariff for provision
ofservices on electricity transmission and into the tariffs ofstate
companies implementing system-wide projects;
enhancement ofcontrol over the group ofpersons overlapping
competitive and natural monopoly types ofactivity in the electric
energy industry;
creation ofconditions for unhindered access ofsales organizations
to the wholesale electricity (capacity) market;
creation ofconditions for entering into bilateral agreements with
market (deregulated) prices between new electricity generating
and consuming entities in non-price zones and isolated
territories;
creation ofconditions for functioning ofa system making it
possible for aconsumer to choose an electricity supplier;
adoption oflegislative acts regulating the procedure ofholding
regular and special contests for attribution ofthe guaranteeing
supplier status.
Measures will be taken for improvement oftariff regulation in the
sphere ofnatural monopolies (on the base oftariffs providing return
on investments, payment for transfer capacity reserve, hourly tariffication, etc.). Simultaneously, the economic responsibility ofpowENERGY STRATEGY OF RUSSIA for the period up to 2030
98
er generation facilities and the grid complex facilities for meeting

ofguaranteed standards ofreliability and consumer service quality
will be introduced.
The state long-term tariff policy in the electric energy industry will
be based on the following principles:
extended application ofmarket pricing mechanisms in the stated
sphere, as well as self-regulation mechanisms;
prevention offailure in implementation ofthe state strategic plans
aimed at rise ofliving standards ofthe population and growth
ofcompetitiveness ofRussian enterprises due to unreasonably
high specific costs ofenergy supply ofthe population and
enterprises;
maintenance and improvement offorms and mechanisms ofthe
state participation in regulation ofsources ofinvestments into the
electric energy industry with the purpose ofprovision ofsufficient
investment attractiveness ofprojects aimed at development
ofgeneration and grid facilities (based on the principles ofreturn
on investments made by the state, in particular, under the
conditions ofstate-private partnership);
application on the electricity (capacity) and heat markets
ofpricing mechanisms providing market players with potential
return level not lower than in other sectors ofeconomy with
comparable risk level;
predictability oflong-term tariff policy and its coordination with
other components ofthe state energy policy: the policy in the
sphere ofenergy efficiency and energy saving, as well as in the
sphere ofrational fuel and energy balance promotion.
The share ofelectricity production cost in its mean retail price for
end users at the initial phases ofthe Strategy implementation is contemplated to reach 6065% the range ofvalues considered to be rational in accordance with the current international experience. Taking
into account that electricity prices have grown sharply in Russia in the
latest years, and that continuation ofthis trend will make the countrys
economy non-competitive, it is necessary to stop the abovementioned
sharp growth ofprices, elaborate and implement measures on provision ofoptimal development and operation ofelectric energy systems,
reduction in losses and wide introduction ofefficient technologies at
the first phase ofthe Strategy implementation. It should provide limited growth ofthe average mean retail price for electricity for end users at further phases ofthe Strategy implementation uptothe level
99
of910US cents per 1 kWh by the end ofthe third phase (as calculated
in permanent prices of2008).
Substantial enhancement ofenergy efficiency ofthe industry will
be provided, including at the expense ofreduction in specific fuel consumption for electricity and heat production at thermal power plants,
as well as at the expense ofreduction in losses (expenses for energy
transportation) in electric grids.
Stage-by-stage adjustment offorecasted electricity consumption in
correlation with the forecasted prices for electricity in the Russian Federation are provided for.
At the first phase ofthe Strategy implementation the demand for
electricity will be determined by consequences ofthe crisis, which
started in 2008, as well as by the capabilities ofthe economy to swiftly
overcome them.
Meanwhile, such trend will not lead to decrease in the rates
offixed assets renewal in the electric energy industry, the replacement ofwhich is vitally important for successful long-term functioning ofthe industry. Steam-gas units with high performance index
will become the main type ofgeneration facilities to be constructed.
Works will be performed for development ofcoal-fired power units
with super-critical parameters. Enhanced safety reactors will be installed at nuclear power plants.
Important area at the first phase ofthe Strategy implementation will
be modernization ofgas-fired thermal power plants operating by steampower cycle and transmission them to steam-gas operation cycle. In
this case the withdrawal ofold capacities and low efficienct out-of-date
equipment from operation will be performed.
Legislative base will also be created for attraction ofprivate investments into development ofall kinds ofgeneration. The state program for
construction ofnuclear and hydroelectric power plants will be implemented, including under the conditions ofstate-private partnership.
In the sphere ofelectric grid complex development the priority areas
will be the following:
audit ofelectric grid complex and creation ofdistribution electric
grids monitoring system from the viewpoint ofreliability and
sufficient transfer capacity provision;
reconstruction and engineering re-equipment ofelectric grids on
the base ofnew electric grid technologies providing their reliable
and efficient operation and advanced equipment corresponding
to the level ofthe best foreign analogues;
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optimization ofconfiguration and enhancement ofreliability

ofbackbone and distribution electric grids for the purpose
ofenhancement ofoperation efficiency ofthe Unified energy
system ofRussia.
The Unified energy system ofRussia will be developed both by
means ofintegration ofisolated power systems or power systems with
weak electric connections, and by means ofdevelopment ofintersystem and intrasystem electric grids ofall voltage classes, including for
electricity export.
The process ofcontrolled liberalization and creation ofcompetitive
domestic electricity and capacity market will be completed. It will provide price signals for suppliers and consumers ofelectricity and capacity with the purpose ofinvestment decision-making. Institution ofguaranteed suppliers and the system ofa targeted social support ofthe
population in respect ofelectricity supply will be developed. Transparent and predictable conditions will be created for long-term fuel supply
ofpower plants, in particular, natural gas supply, as well as for priority
use ofcoal in the electric energy industry where it is justified from the
viewpoint ofeconomy and environment.
At the second phase ofthe Strategy implementation nuclear power
plants will be commissioned, large-scale renewal offixed assets and
development ofnew energy infrastructure will take place in the Eastern
Siberia and Far East.
Industrial implementation ofnew steam-gas units with high performance index and coal generation units on supercritical steam parameters will be continued. In the nuclear electric energy industry, the
serial production and commissioning ofwater-cooled reactors, as well
as fast-neutron reactors will be expanded, and production facilities for
provision ofclosed fuel cycle realization will be established. Renewable
energy will be developed. Indicators ofenergy, economic and environmental efficiency will be substantially improved at the expense ofinvestment and innovative renewal ofthe industry.
At the third phase ofthe Strategy implementation the electric energy
industry will be characterized by expanded introduction oftechnological innovations into traditional segments ofthe industry and dynamic
development ofnon-fuel energy against the background ofslowdown
in the growth rates ofdemand for electricity at the expense ofenhancement ofthe general energy efficiency ofthe Russian economy. Industrial
development ofcoal-fired power generating units ofnew technological
generation, coal gasification units and energy technological complexes
101
will start in the sphere ofthermal generation. The performance index

ofthermal power plants will become at average 1.2 times as high as that
ofthe year 2005.
At the stated phase the following activities will be developed: construction oflarge hydroelectric power plants in the east ofthe country;
usage ofsmall-scale nuclear power facilities, including floating nuclear
power plants, in the regions ofthe High North and Far East, as well as
module high-temperature gas-cooled reactors with the purpose ofproduction ofelectricity, municipal heat and high-temperature heat for
technological purposes, including for hydrogen production.
8. Nuclear fuel cycle and nuclear electric

energy industry
The strategic objective ofthe nuclear fuel cycle development is formation ofthe whole integrated complex ofnuclear electric energy industry, its fuel and energy base, environmental safety ofnuclear power
plants and nuclear industry, as well as scientific management ofthis
complex in accordance with economically reasonable requirements
ofthe country.
The nuclear electric energy industry is capable ofits fuel base
reproduction. This key peculiarity ofthe industry determines the
adequate priority ofthe nuclear electric energy industry in the future, which is characterized by tightening ofenvironmental requirements to energy activity and stabilization ofhydrocarbon capacities ofthe fuel and energy complex. Under these conditions, for the
purpose oftimely preparation and development ofappropriate areas
ofthe nuclear electric energy industry, serial nuclear power plants
with fast-neutron reactors and related facilities ofclosed nuclear fuel
cycle will be established alongside with traditional thermal neutron
reactors.
Explored and potential reserves ofnatural uranium, accumulated
reserves ofregenerated uranium, existing and developing capacities
ofnuclear fuel cycle, subject to justified investment and export-import
policy in this sphere, will provide the anticipated parameters ofnuclear
electric energy industry development in the stated period. The longterm technological policy contemplated in the Strategy with introduction and development ofnuclear power technologies ofnew generation,
including fast-neutron reactors and technologies ofclosed nuclear fuel
cycle, will eliminate fuel restrictions for the nuclear electric energy industry in along-term outlook.
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Taking into account the targeted scales ofthe industry development,

the following key goals are supposed to be solved:
enhancement ofefficiency and competitiveness ofthe nuclear
electric energy industry, reduction in the level ofspecific capital
investment, provision ofthe safety level compliance with modern
standards;
promotion ofunified complex including fuel and raw material
resources energy production waste disposal;
development ofan industrial investment policy and target
programs which are to provide sustainability, renewal and
increase in efficiency ofthe existing potential and development
ofthe nuclear fuel base and facilities for recycling and disposing
ofradioactive wastes;
implementation ofhighly technological and economically sound
projects ofenergy complexes in line with the modern level
ofsafety and reliability, including on the base ofinnovative
technologies;
development ofRussian energy machinery production and
construction and assembly complex.
An important component ofthe state strategy ofthe nuclear fuel
cycle and nuclear electric energy industry development is the enhancement ofthe Russian nuclear technologies export potential:
promotion ofnuclear power plants, nuclear fuel and electricity
export.
Areas and phases ofthe state energy policy implementation with respect to the nuclear electric energy industry development envisage, in
particular, the following.
Increase in electricity production at nuclear power plants shall be
performed on the basis ofthe following:
implementation ofprojects on nuclear power plants construction
(completion ofpower-generating units on existing sites at the
first phase ofthe Strategy implementation, construction thereof
at all phases, including at the second and third phases in
cooperation with third party investors);
increase in output and extension ofoperating life ofexisting
power-generating units; program ofintensification and increase
in operating ratio ofinstalled capacity at all phases.
Formation and development ofbasic energy equipment engineering
on the basis ofthe following:
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development ofstandard designs ofserial power-generating

units (stage-by-stage standard designs ofAES-2006, fast-neutron
reactor);
development ofnew types offuel for power-generating units
ofnuclear power plants and its promotion onto western markets
(licensing, signing ofcontracts for delivery offuel assembly
to Europe and the USA, implementation oftrial operation
programs);
elaboration and construction ofpower-generating units ofthe
4th generation (construction ofpower-generating unit BN-800
at Beloyarsk nuclear power plant and elaboration oftechnical
projects for fast-neutron reactors with liquid-metal coolant).
Development ofnuclear fuel cycle on the basis ofthe following:
development ofgas-centrifuges ofnew generation;
modernization ofseparation-sublimation complexes (meeting the
requirements ofRussian nuclear power plants and preservation
ofRussias leading positions on the world market ofservices on
uranium enrichment);
enhancement offabrication economic efficiency (providing
competitiveness ofRussian nuclear fuel on world markets).
Development ofthe resource base ofthe nuclear electric energy industry on the basis ofthe following:
development ofuranium deposits;
increase in mining at combined deposits;
exploration and exploitation ofnew deposits in the most promising
uranium-rich regions ofthe world (providing aggregate uranium
mining at the level ofat least 6 thousand tons per year by the end
ofthe first phase, and 17 thousand tons per year by the end ofthe
second phase ofthe Strategy implementation);
establishment offacilities for the new types offuel production;
development and promotion ofthe closed fuel cycle conception
implementation.
Development ofthe nuclear electric energy industry production
base on the basis ofthe following:
provision ofrequired volumes ofequipment deliveries for nuclear
power plants, minimization ofmonopoly pressure (establishment
ofalternative suppliers ofpower equipment, including by forming
alliances with foreign companies);
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enhancement ofeconomic efficiency ofpower engineering

enterprises operating under the jurisdiction ofthe State Atomic
Energy Corporation Rosatom and their entrance to allied
markets.
Creation ofinfrastructure for management ofthe nuclear power
plants life cycle by establishing unified state systems ofspent nuclear
fuel management and radioactive waste management, as well as by developing technologies ofnuclear power-generating units decommissioning.
9. Heat supply
The strategic objectives ofthe heat supply development are the following:
achievement ofthe high level ofcomfort in residential, public
and industrial premises, including growth in volume and quality
ofthe complex ofservices on heat supply (heating, cold supply,
ventilation, air conditioning, hot water supply), high level,
corresponding to the level ofthe leading European countries,
ofthe countrys population and economy provision with this
complex ofservices at affordable prices;
radical increase in engineering level ofheat supply systems on the
basis ofinnovative highly efficient technologies and equipment;
reduction in nonproductive losses ofheat and fuel;
provision ofcontrollability, safety and economic efficiency
ofheat supply;
reduction in negative impact onto the environment.
The results ofthe Energy Strategy ofRussia for the period upto2020
implementation in the field ofheat supply should be recognized unsatisfactory. Over the past period the situation in the stated field deteriorated despite anumber ofadopted resolutions which turned out to be
not sufficiently supported by the required organizational measures,
material and technical resources and financial assets.
Over the past period the indicators ofdepreciation ofheat supply
fixed assets grew upto6570%, the operation ratio ofinstalled heating
capacity ofelectric power plants dropped to the amount not exceeding
50%, the length ofheat supply networks reduced by 7% (by more than
13.5 thousand km), losses in heat supply networks increased from 14 to
20%, and electricity consumption for heat-carrier transfer grew significantly as well (upto40 kWh/Gcal).
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The main problems in the stated field include the following:

unsatisfactory state ofheat supply systems characterized by high
depreciation offixed assets, especially ofheat supply networks
and boiler rooms, insufficient reliability ofoperation, large
energy losses and negative impact onto the environment;
demand for intensive investment to provide reliable heat supply
and simultaneously limit the growth ofprices for heat supply
services;
organizational dissociation ofheat supply systems and consumers
oftheir services: absence ofthe unified state policy in this sector,
first ofall research and development and investment policy;
demand for institutional reconstruction ofthe whole heat supply
system in order to help it overcome the crisis and successfully
function in market environment.
The following key goals must be completed to achieve strategic objectives in the stated sphere:
development ofheat supply in Russia and its regions on the basis
ofcentral heating with the use ofmodern economically and
environmentally efficient co-generation units with wide range
ofcapacities;
expansion ofcentral heating on the basis ofsteam-turbine, gasturbine, gas-powered and diesel units to the area ofmedium and
low thermal loads;
optimal combination ofcentral and decentralized heating with
separation ofthe corresponding zones;
maximum use ofgeothermal energy potential to provide heat
supply ofisolated regions rich with geothermal resources (the
Kamchatka Peninsula, Sakhalin Island, Kuril Islands);
development ofsystems ofthermal power centralized-distributed
generation with various types ofheat producers located in areas
ofheat consumption;
modernization and development ofdecentralized heat supply
systems with application ofhighly efficient condensation gas and
coal boilers, co-generation, geothermal, heat-pump and other
units, as well as automated individual heat generators ofnew
generation for burning various types offuel;
improvement ofcombined heat and power plants operation
regimes aimed at maximum reduction in electricity production
by condensation cycle, shift ofits production to suburban thermal
power plants for the purpose ofoperational economy;
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change ofthe heat supply systems structure, including rational

combination ofsystem and element redundancy, equipment
with automatic devices and measuring instruments in the
frames ofautomated systems ofdispatching control over normal
and emergency regimes ofoperation thereof, transition to the
independent pattern ofheat loading connection (ventilation and
air conditioning) and closed system ofhot water supply;
combined operation ofheat sources for mutual heat supply
networks with optimization oftheir operation regimes;
reconstruction ofcombined heat-and-power plants, boiler rooms,
heat supply networks and heat sources, thermal hydraulic regimes
adjustment, enhancement ofconstruction-and-assembly and
repair works quality, timely performance ofscheduled measures,
equipment ofconsumers with stationary and mobile heat supply
units as reserve and (or) emergency heat supply sources;
development oflegislative base providing efficient interaction
between heat producers, organizations performing its
transportation and distribution, as well as consumers under
market conditions.
Prospected structure, as well as volumes ofheat production and
consumption for the stated period are aimed at maximal satisfaction ofRussias economy demands. They also take into account deurbanization processes, which has already started, including shift
ofindustrial production beyond the boundaries ofurban areas
and active development ofindividual low-rise housing, the share
ofwhich is planned to amount to 5255% ofall residential properties to be commissioned. Low-rise housing, as arule, will be provided with individual heat generators, while high-rise buildings
with centralized (partly with decentralized) heat sources. The main
increment ofheat output in the centralized heat supply systems will
be provided by thermal power plants, the share ofwhich in the total
volume ofheat production in the centralized heat supply systems
will grow from 44 to 4950% by the end ofthe third phase ofthe
Strategy implementation. Besides, the use ofwaste-heat utilization
units and renewable heat sources on the basis ofgeothermal and
solar energy and biomass will be increased. As aresult, the share
ofboiler rooms in heat output in the centralized heat supply systems will be reduced from 49 to 40% by the end ofthe third phase
ofthe Strategy implementation.
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Nuclear power plants with module high-temperature gas-coolant reactors will also be used in the heat supply industry for industrial heat
production, production ofhydrogen, synthetic liquid fuel, etc.
Energy saving in the heat supply industry will be executed in the
following main areas:
heat production: increase in performance index ofboiler, heating
and other units on the basis ofmodern technologies offuel
burning, co-generation ofheat and electricity, increase in the
operating ratio ofthermal capacity, development ofdistributed
heat generation systems with involvement ofrenewable energy
resources, increase in engineering level, automation and
mechanization ofsmall heat sources, equipment thereof with
systems ofaccounting and regulation ofheat power consumption,
as well as reasonable division ofcentralized and decentralized
areas ofheat supply;
heat transportation systems: reduction in heat losses and heat
carrier leaks as aresult ofheat supply networks reconstruction
on the basis offactory-assembled heat pipelines use, efficient
methods oflaying thereof, modern locking and control devices,
automated units and regime management systems, as well
as organization ofoptimum operation regimes ofheat supply
networks, heat sources and consumers;
heatconsumptionsystems:accountingandqualitycontrolofconsumed
heat power, reconstruction and new construction ofbuildings with the
use ofheat resistant structures, thermal automation, energy efficient
equipment and heat pipelines, as well as high technological efficiency
ofthe whole process ofheat consumption, affordability ofits control
and the possibility to manage it.
As aresult, specific heat losses will be reduced at least by half (from
19 to 810% by the end ofthe third phase ofthe Strategy implementation), fuel economy in the amount ofat least 40 million tons ofcoal
equivalent will be provided by 2030.
The projected development ofheat supply will require implementation ofsuch measures as establishment and improvement ofcompetitive market environment, promotion ofadvanced Russian equipment
for heat supply systems development, enhancement ofmanagement
ofthese systems and support in investment attraction into the heat supply sector provided by the state and regional authorities.
At the first phase ofthe Strategy implementation, tightening ofheat
supply services standards will be provided due to optimization ofsysENERGY STRATEGY OF RUSSIA for the period up to 2030
108
tems structure, combination ofcentralized and decentralized heat supply, enhancement ofreliability, safety, energy and economic efficiency
ofheat production, transportation and consumption at the expense
ofmodernization ofproduction assets and heat supply networks, as well
as provision ofconsumers with accounting and regulation systems.
Within the stated period development and commencement ofstageby-stage implementation ofprogram measures aimed at radical improvement ofthe heat supply industry should be realized. The measures, among other things, provide for the following:
development offavorable conditions for private investments
attraction in the heat supply sector, including introduction ofthe
method ofeconomic return on investment;
optimization ofthe tariff system (transition to mandatory
application ofa double-rate tariff, application oflong-term tariffs
under bilateral contracts) with due account for interests ofheat
producers and heat consumers both;
development ofmandatory requirements to the equipment
produced and used in the stated sector, as well as to enhancement
ofenergy efficiency ofbuildings;
rational application ofstate support mechanisms, including in
the context ofstate-private partnership.
At the second phase ofthe Strategy implementation large-scale reconstruction and technical re-equipment offixed assets will be performed, including economically efficient replacement ofheat supply
networks and central heating network equipment in the regions where
such replacement is economically justified. Systems ofdecentralized
(individual) heat supply will be widely developed at anew technological level, including with the use ofrenewable heat sources.
Heat power market will be established and relationships between
its players will be harmonized. Processes ofenhancement ofthe heat
supply energy efficiency and introduction ofinnovative highly efficient
process flows in the industrys organization will be further developed.
At the third phase ofthe Strategy implementation heat supply will
achieve high levels ofenergy, economic and environmental efficiency.
The population will be provided with high level ofheat comfort corresponding to that ofthe countries with similar natural and climatic conditions (Canada, Scandinavian countries). Further development ofthe
industry will follow the course ofexpanded involvement ofnon-hydrocarbon energy sources into the heat production and use ofhighly efficient automated process flows ofthe heat supply organization.
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10. Use ofrenewable energy and local

energy resources
The strategic objectives ofthe renewable energy and local energy
resources use are the following:
reduction in growth rates ofanthropogenic load onto the
environment and resistance to climatic changes under the
condition ofnecessity to satisfy growing energy consumption;
rational use and reduction in growth rates ofexisting fossil fuels
consumption under the condition ofinevitable exhaustion ofits
reserves;
preservation ofhealth and quality oflife ofthe population by
means ofslowdown in growth rates ofenvironmental pollution
from fossil fuel use; reduction in the state expenditures on health
protection;
reduction in growth rates ofexpenses for distribution and
transportation ofelectricity and fuels and in the resulting losses;
involvement ofadditional fuel and energy resources into the fuel
and energy balance;
enhancement ofenergy security and reliability ofenergy supply
at the expense ofits increasing decentralization.
According to current assessments, the technical potential ofrenewable energy in Russia amounts to at least 4.5 billion tons ofcoal equivalent per year. It mainly includes potential ofsolar and wind energy and
exceeds the current energy consumption in the country by more than
4 times. Economic potential ofrenewable energy depends on existing
economic conditions, cost, availability and quality offossil fuels reserves,
as well as on regional peculiarities. It changes in the course oftime and
must be specially assessed in the process ofpreparation and implementation ofspecific programs for and projects on development ofrenewable
energy (taking into account the comprehensive assessment oftheir specific contribution into achievement ofthe stated strategic objectives).
In the future it is planned to provide rational and economically justified growth ofvarious types ofrenewable energy use for electricity and
heat production, as well as to expand the use ofalternative kinds offuel
in transportation and energy sector.
In accordance with the Guidelines ofthe State Policy in the Sphere
ofEnhancement ofEnergy Efficiency ofthe Electric Energy Industry on
the Base ofRenewable Energy Use for the Period upto2020, the target
ofthe stated period is the increase in the share ofelectricity, produced
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on the base ofrenewable energy (apart from hydroelectric power plants

with installed capacity over 25 MW), in the structure ofelectricity production and consumption from 0.5 to 4.5% roughly. In order to achieve
the projected volumes ofelectricity production on the base ofrenewable energy, commissioning ofgenerating facilities (small hydroelectric power plants, wind, tide, geothermal power plants, thermal power
plants using biomass as one ofthe fuels, other kinds ofelectric units)
with an aggregate installed capacity upto25 GW should be realized
within the stated period.
In order to realize this goal, it is required to develop acomplex
ofmeasures ofthe state policy in the stated sphere providing for the
system state support and harmonized with projected and actual growth
rates ofrenewable energy development. The stated growth rates shall
also be harmonized with construction ofrequired infrastructure, enhancement ofcompetitiveness ofelectricity production on the base
ofrenewable energy, as well as with rational involvement ofrenewable
energy into the fuel and energy balances ofindividual regions.
For these purposes it is planned to develop and regularly adjust
master plans for allocation ofpower generation facilities working on the
base ofrenewable energy in the Russian Federation, with due account
for layout ofproductive forces, prospects ofsocial and economic development ofthe regions, development ofresource base, including the list
ofprojects for new generation facilities construction and reconstruction
ofexisting ones operating on the base ofrenewable energy.
At the third phase ofthe Strategy implementation, under the condition ofgrowing electricity production, it is planned to provide at least
the constant share ofrenewable energy in its structure, which corresponds to the annual production by 2030 ofat least 80100 billion kWh
on the base ofrenewable energy.
In general, the state policy in the field ofrenewable energy use for
the period upto2030 will provide for the following:
coordination ofmeasures in the sphere ofelectric energy industry
and renewable energy development;
rational implementation ofstate support measures for
development ofrenewable energy, in particular, by means
ofpayment for electricity produced with the use ofrenewable
energy and sold on the wholesale market, with due account for
markups above the wholesale market equilibrium price, as well
as by means ofreimbursement ofthe payment for technological
connection to the networks;
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development ofthe complex ofmeasures for the state support

ofthe manufacturing industry and research institutes aimed at
provision ofthe renewable energy sector with Russian equipment,
components and advanced technologies, including with the
use oftransfer oftechnologies and localization ofmanufacture
ofcomponents for electric power plants running on renewable
energy at Russian enterprises;
creation offavorable conditions for attraction ofoff-budget
investments for new generation facilities construction and
reconstruction ofexisting ones operating on the basis
ofrenewable energy; use ofventure capital funds for investing
into the facilities in the renewable energy sector;
support ofdevelopment ofsmall enterprises operating on the
energy service market in the renewable energy sector;
provision ofaccess to information on elaboration and
implementation ofmeasures on renewable energy sector
development;
execution ofengineering and technological control and
supervision over compliance with safety requirements in the
process ofrenewable energy use.
The use oflocal energy resources in the regional energy balances is
insufficient at present. In 2008, the share ofpeat in the fuel and energy
balance ofRussia was less than 1%, the share ofother hard fuels, including various wastes, and wood fuel for heat supply were within the range
from 3 to 4%.
Peat is one ofthe most important and promising local fuel. Main areas ofthe peat utilization will be satisfaction ofmunicipal and household needs, as well as requirements ofagriculture and related industries.
Upon increase in the volumes ofpeat production and modernization
oftechnological base ofthe peat industry, its efficient use at thermal
power plants will become possible.
Along with traditional areas ofits use as fuel and fertilizer, the peat,
due to its multisided natural features, will also be used in medicine
and oil industry, which will require to form an appropriate legislative
base, as well as development and application ofrational forms ofstate
support ofthe peat industry, including the issues ofappropriate target
programs elaboration, subsidizing ofinterest rates payable on loans for
production development incurred by the peat industry entities, etc. This
will enable facilitation ofintroduction ofmodern highly efficient technologies and equipment for mining, agglomeration and burning ofpeat
112
products for the needs ofsmall and medium energy enterprises, as well
as increase the share ofpeat use in the fuel and energy balance ofpeatproducing regions from the current insignificant amounts (as arule not
exceeding 12%) to at least 810%.
The state policy in the sphere oflocal energy resources use for the
period upto2030 will provide for the following:
restoration and support ofdevelopment oflocal energy resources
production, establishment ofthermal power plants and boiler
rooms running on these sources (peat, wastes offorestry and
wood processing industries), including in hard-to-reach and
remote areas;
creation offavorable conditions for energy production on the
basis ofmunicipal wastes.
Implementation ofthe stated policy, along with the development
ofautonomous energy sector and use oflocal hydrocarbon and coal resources, will make it possible to reduce the share ofdelivered energy
resources in regional fuel and energy balances by afactor of1.31.5,
while at present this share amounts to about 45%.
11. Forecast ofinvestments into the fuel and energy

complex development
The development ofvarious industries ofthe fuel and energy complex, renewable energy, centralized heat supply, autonomous energy
sector and energy saving will require large investments in the amount
ofUS$2.42.8 trillion at constant prices ofthe year 2007.
The major sources ofinvestments will include own funds, profits
ofjoint-stock companies (Russian (in the main) and foreign) with attraction ofloans and assets raised from additional share issue. In the course
ofexisting nuclear and hydroelectric power plants modernization and
construction ofnew ones, as well as in the cases when, due to regional
peculiarities, energy companies are not self-sufficient and investmentattractive, state assets will also be raised in accordance with approved
program documents.
The predictive assessment ofrequired investments are indicated in
Appendix 4 to the Strategy.
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VII. Regional and interindustrial

aspects of the fuel and energy
complex development
1. Regional peculiarities ofthe fuel and energy
complex development
The development ofthe fuel and energy complex in the Russian regions is based on the key provisions ofthe Concept for the Enhancement ofRegional Policy in the Russian Federation and master plans for
development ofindividual industries ofthe fuel and energy complex
and will be implemented with due account to the existing energy potential ofthe territories.
Central federal district

The volumes ofprimary energy consumption in the Central federal
district will grow and by 2030 will have exceeded the level of2008 by
the factor of1.41.6. Simultaneously, the own production ofprimary
energy will grow and will have overcome the level of2008 by the factor
of1.9. As aresult, the self-sufficiency rate ofthe district will have been
raised to 1719%.
At the first phase ofthe Strategy implementation, the replacement ofsteam-power generating units with steam-gas ones, loading and modernization ofexisting coal-fired generating units,
decommissioning ofold equipment ofcombined heat-and-power
plants, as well as construction ofnew combined heat-and-power
plants with steam-gas units will be performed in the electric energy industry ofthe region. Nuclear electric energy industry will
be further developed. Capacities ofoil refineries will be modernized. Construction ofthe gas pipeline Northern Areas ofthe Tyumen Region Torzhok will be completed. High emphasis will be
put on realization ofthe structural potential ofenergy saving at the
expense ofaccelerated growth ofthe service sector and low energy-intensive industries.
At the second and third phases ofthe Strategy implementation
energy production will grow at the expense ofconstruction ofnuclear power plants and hydroelectric pumped storage power plants
synchronized therewith in their operation, as well as thermal power
plants with steam-gas generating units. The use ofcoal from the Siberian federal district, as well as local energy resources (coal, bioENERGY STRATEGY OF RUSSIA for the period up to 2030
114
mass, peat) will be slightly increased. In the field ofenergy saving,

low-cost measures ofits technological potential implementation will
prevail.
By the end ofthe third phase ofthe Strategy implementation the
construction ofbackbone high-voltage power transmission lines for
electricity transportation from the Eastern regions ofthe country to its
European part, including to the Central federal district, will have been
completed. Key positions in the sphere ofenergy saving will belong to
high-cost measures ofits technological potential implementation.
In 2030, the Central federal district will be an energy-deficient region with developed electric energy industry, oil refining and oil chemistry. The role ofnuclear power generation, as well as the use oflocal
energy resources, will be significantly increased. The energy saving
potential will be practically entirely implemented. Electric power connections ofthe district with the Unified power system ofthe Siberia will
become stronger.
North-Western federal district

By 2030, the volumes ofprimary energy consumption in the NorthWestern federal district will have exceeded the level of2008 by the factor of1.41.6. The primary energy production will grow at higher rates
in the regions (by 2030, the level of2008 will have been overcome by
the factor of2.52.7), as aresult, the North-Western federal district will
no more be an energy-deficient region by the end ofthe second phase
ofthe Strategy implementation, and by 2030, the level ofthe regions
provision with primary energy will have reached 114128%.
At the first phase ofthe Strategy implementation, the volume
ofprimary energy production will grow at the expense ofincrease in
oil and gas production in the Timano-Pechorskaya area and thermal
coal in the Republic ofKomi. Active works on putting oil and gas deposits into operation on the continental shelf ofthe Arctic seas will
be continued. The nuclear electric energy industry will be further
developed. Construction ofthe second line ofthe Baltic pipeline
system, gas pipelines Severniy Potok (Nord Stream) and Northern Areas ofthe Tyumen Region Torzhok, sea crude oil loading
terminals in the ports ofPrimorsk and Ust-Luga will be completed.
Measures will be taken on energy independence provision ofthe
Kaliningrad Region. The growth ofprimary energy consumption
will be reduced primarily at the expense ofstructural energy saving
potential realization.
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At the second phase ofthe Strategy implementation, the development ofStockman gas condensate deposit will play the leading role in
the growth ofenergy production in the region. aliquefied natural gas
plant will be built on the coast ofthe Barents Sea. apart ofgas produced on the continental shelf ofthe Arctic seas will be delivered to the
unified system ofgas supply. The nuclear and hydraulic electric energy
industries will be further developed.
Construction ofa new oil refinery will be completed in the Leningrad Region. The region will turn from energy-deficient to energy-redundant, and export ofenergy resources to other regions ofthe country and abroad will be developed. Measures aimed at technological
potential realization will prevail in the sphere ofenergy saving, wastes
oftimber processing complex will be used to the fuller extent.
At the third phase ofthe Strategy implementation, active development ofoil and gas deposits on the continental shelf ofthe Arctic seas
and development ofenergy transportation infrastructure will be continued in the region. Modern innovative technologies will be widely
applied in the energy saving sphere.
In 2030, the North-Western federal district will be alarge energyredundant region, performing deliveries, including transit deliveries,
ofoil, natural gas, including liquefied natural gas, and electricity to
the energy-deficient regions ofthe country and abroad. Energy efficiency ofthe regions economy will be raised significantly thanks
to realization ofthe structural and technological energy saving potential. The level ofenergy security provision will be increased due
to diversification ofthe fuel and energy balance and non-fuel energy
development.
Southern federal district

Growth ofthe primary energy consumption (by afactor of1.51.6
as compared with the level of2008) and substantial increase in the primary energy production (by afactor of2.12.2 as compared with the
level of2008) will take place in the Southern federal district, which will
cause the achievement ofself-reliance ofthe region on its own primary
energy resources (at the level of8997%).
At the first phase ofthe Strategy implementation, additional loading and modernization ofexisting coal-fired generating units, replacement ofsteam-power generating units with steam-gas ones and decommissioning ofold equipment ofcombined heat-and-power plants
will take place in the electric energy industry. The use oflocal energy
116
resources (biomass, geothermal waters) will be further developed.

Construction ofthe oil-product pipeline Yug (South) and modernization ofthe crude oil loading terminal in the port ofNovorossiysk
will be completed. Significant priority will be given to the implementation ofthe energy saving potential, primarily the structural one (at
the expense ofaccelerated growth ofthe service sector and low energy-intensive industries).
At the second phase ofthe Strategy implementation, the nuclear and
hydraulic energy industry will be further developed. Modernization
ofthe oil refinery in Tuapse will be completed. Export ofRussian energy resources to the countries ofEurope via the territory ofthe Southern
federal district will be increased: construction ofthe gas pipeline Yuzhniy Potok (South Stream) will be completed, the transfer capacity
ofthe Caspian Pipeline Consortium will be increased, anew sea port
on the Black Sea coast with highly productive coal terminal will be constructed.
At the third phase ofthe Strategy implementation, electricity production at nuclear and hydroelectric power plants, as well as on the
base oflocal energy resources, will be increased. Thermal coal from
the Siberian federal district and natural gas from the Urals federal district will be primarily used to cover energy deficit ofthe region. Energy
transport infrastructure, as well as technological energy saving will be
further developed.
By 2030, the energy efficiency ofthe Southern federal district economy will have grown significantly. The share ofnuclear and hydraulic
power generation, as well as local energy resources in the structure
ofthe fuel and energy balance will have increased in the region. Not
only will the energy security ofthe region be provided, by also its importance as atransit export center providing deliveries ofRussian energy resources to the world market be enhanced on the base ofthe developed energy transport infrastructure.
Volga federal district

The growth ofprimary energy consumption (by the factor of1.21.4
in 2030 as compared with the level of2008) will be accompanied by reduction in primary energy production (7080% in 2030 as compared
with the level of2008) in the Volga federal district. As aresult, the energy shortage in the region (self-sufficiency ofthe Volga federal district
with primary energy will amount to 5053% in 2030) and its dependence on energy deliveries from the outside will grow.
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At the first phase ofthe Strategy implementation, the gradual reduction in oil and gas production will take place in traditional energy-producing regions. The electric energy industry will witness the
replacement ofsteam-power generating units ofthermal power plants
with steam-gas ones, additional loading and modernization ofexisting
coal-fired generating units, commissioning ofnew steam-gas combined
heat-and-power plants. Electricity production at existing hydroelectric
power plants will be increased at the expense ofthe water level rise in
reservoirs at Cheboksary and Nizhnekamsk hydraulic systems uptothe
projected marks. By the end ofthis phase, the first stage ofa new oil refinery in the Republic ofTatarstan will have been commissioned.
At the second phase ofthe Strategy implementation, oil and gas
production will be increased in the Caspian Region against the
background ofthe further reduction in oil production in the VolgaUrals area. Along with processing ofown hydrocarbons, the processing ofthe hydrocarbons mined at oil and gas deposits in the
Western Siberia will be increased. New electric energy industry
technologies on the base ofburning ofsolid fuel with wide fraction structure will be introduced. Construction ofpipeline systems
running from deposits to be put into operation to existing oil and
gas processing and chemical facilities will be completed. Oil and
gas from the Urals federal district, as well as coal from the Kuznetsk coal basin will be used to cover energy shortage. Measures
on technological energy saving potential implementation will be
developed significantly.
At the third phase ofthe Strategy implementation, the stabilization
ofoil and gas production volumes in the Caspian region and further reduction in oil production in the Volga-Urals area will take place. For the
purpose ofgrowing energy shortage coverage, by the end ofthe second
phase the capacities ofhigh voltage backbone transmission lines will
be used to transport electricity from the eastern regions ofthe country. High-cost measures will be widely used in the technological energy
saving sphere.
By 2030, the share ofoil and gas in the fuel and energy balance
structure will have been reduced, while the share ofcoal and the energy ofhydroelectric power plants will have been increased. The energy
security in the region will be based on the maximum possible realization ofstructural and technological energy saving potential and interregional energy links provided by means ofextended and modernized
energy transport infrastructure.
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Urals federal district

The stabilization ofprimary energy production, accompanied with
the growth ofconsumption thereof, will be witnessed in the Urals
federal district, especially at the third phase ofthe Strategy implementation (by afactor of1.31.6 in 2030 as compared with the level
of2008). In spite ofsome decrease in the rate ofself-sufficiency, the
Urals federal district will still be the main energy-producing region
in the country.
At the first phase ofthe Strategy implementation, the stabilization
and gradual reduction in oil production is expected in the region. Measures on utilization ofassociated petroleum gas will be actively developed. Reduction in the gas production volumes will be compensated by
development ofnew deposits in the Nadym-Purtaz district and on the
Yamal Peninsula. Works on pipeline systems construction from existing and newly commissioned deposits to oil and gas refining facilities
and oil chemistry plants will be accelerated. Construction ofnew gas
processing and gas chemical complexes will be commenced. Energy
development ofthe Circumpolar Urals will be realised, in particular,
in the context ofthe project The Industrial Urals the Polar Urals.
Works on reconstruction oftrunk oil and gas pipelines will be performed. Construction ofthe gas pipeline Northern Areas ofthe Tyumen Region Torzhok will be completed. Gasification ofthe Western
Siberia will be continued.
At the second phase ofthe Strategy implementation, the stabilization ofoil and natural gas production in the region will go on. Active
development ofgas deposits on the Yamal Peninsula and in the Gulfs
ofOb and Taz will compensate the reduction in gas production in the
traditional gas-producing areas. Extensive gas processing industry
and oil chemistry will be created in the region to utilize and transport
wet gas and gas condensate. Low-pressure gas ofexhausted large
deposits will be used for the needs ofgas chemistry and electric energy industry in the region. Development ofuranium ore deposits in
the Kurgan Region will be commenced (the Closed Joint-Stock Company Dalur).
At the third phase ofthe Strategy implementation, gas production
on the Yamal Peninsula and in the Gulfs ofOb and Taz will grow significantly, while gas production volumes in the Nadym-Pur-Taz district
ofthe Tyumen Region will experience further reduction. The use ofgas
as avaluable chemical product will be expanded, production ofsynthetic liquid fuel from gas will be commenced.
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In 2030, the Urals federal district will hold its position ofthe main
oil and gas producing region ofRussia delivering energy carriers to
energy-deficient regions ofthe country and abroad. Energy efficiency ofthe region will be enhanced, the energy saving potential will
be realized, environmentally friendly and efficient methods ofenergy production will be used in complicated natural and climatic
conditions.
Siberian federal district

By 2030, the primary energy production in the Siberian federal
district will have been increased by afactor of3.23.9 as compared
with the level of2008, and its consumption volumes will have been
increased by afactor of1.41.6. As aresult, energy self-sufficiency
ofthe region will have been increased from 42% in 2008 to 99100%
by 2030. The deliveries ofthe primary energy to other regions ofthe
country and abroad will also have grown.
At the first phase ofthe Strategy implementation, oil and natural gas production will be increased in the Siberian federal district.
Development ofoil deposits in the Krasnoyarsk Territory (VankorSuzunsk center) and the Irkutsk Region will be continued. Active
measures on utilization and complex use ofassociated petroleum
gas will be taken. Preparation for development oflarge gas fields
will be deployed. Creation ofnew oil and gas chemical centers will
be commenced. Coal production will grow in the Kansk-Achinsk
coal basin, while its stabilization will take place in the Kuznetsk coal
basin. The construction ofthe oil pipeline Eastern Siberia Pacific
Ocean will be continued. Works on gasification ofindustrial facilities and communal housing will be undertaken. Production ofheat
and electricity on the base ofrenewable energy will be developed in
isolated industrial centers.
At the second phase ofthe Strategy implementation, volumes
ofoil production and especially ofnatural gas production will go
on growing. Exploitation ofthe Krasnoyarsk (on the base ofSobinsko-Paiginskoye and Yurubcheno-Tokhomskoye deposits) and the
Irkutsk (on the base ofKovyktinskoye deposit) gas centers will be
commenced. Large oil and gas chemical complexes will be established. Special priority will be given to the most rational use ofmulticomponent hydrocarbons, including utilization ofhelium. Hydraulic
and thermal coal-fired power generation based on the use ofmodern
innovative technologies ofsolid fuel burning will be further develENERGY STRATEGY OF RUSSIA for the period up to 2030
120
oped. Large hydroelectric power plants will become the base for formation ofterritorial energy and industrial complexes in the region.
Resource base ofthe nuclear electric energy industry will be actively
developed on the base ofuranium deposits in the Zabaikalye Territory and the Republic ofBuryatia. The coal industry will be further
developed, including at the expense ofdevelopment ofnew deposits in the Republic ofTyva and the Zabaikalye Territory. Deliveries
ofcoal to the European regions ofRussia will be increased, which
will require the increase in transfer capacity ofrailroads westwards.
The use ofrenewable energy in remote and isolated regions ofthe
Siberian federal district will be expanded. Gasification ofthe region
will be continued.
At the third phase ofthe Strategy implementation, the growth
ofoil and natural gas production will be continued. Gasification
ofthe region will be completed. Construction ofinterregional backbone electric grids for electricity transportation to the European
part ofRussia will be realized.
In 2030, the region will firmly hold the top position in Russia in
coking and thermal coal production, the second position in oil and
gas production, one ofthe the leading positions in Russian oil chemistry, and will also play the leading role in deliveries ofhelium onto
the Russian and world markets.
Thanks to the development ofenergy transport infrastructure and
use ofrenewable energy, not only the energy security ofall regions
ofthe Siberian federal district will be provided, but also sustainable
deliveries ofenergy resources to the energy-deficient regions ofthe
country and abroad will be organized.
Far Eastern federal district

Thanks to substantial growth ofprimary energy production, the
Far Eastern federal district will turn from energy-deficient to energy-redundant and export-oriented region at the first phase ofthe
Strategy implementation. By 2030, the volumes ofprimary energy
production will have grown by afactor of4.4 as compared with the
level of2008.
Extensive industrial base will be created in the region on the basis
ofown energy and resource base with the use ofmodern technologies,
including energy saving technologies. The primary energy consumption will have been increased by afactor of1.71.9 as compared with
the level of2008.
121
At the first phase ofthe Strategy implementation, the development

ofoil and gas deposits ofthe Sakhalin Region (on the continental shelf
ofthe Sea ofOkhotsk) and oil deposits in the Republic ofSakha (Yakutia) (Talakanskoye, Verkhnechonskoye deposits) will be continued.
Special priority will be given to the comprehensive utilization ofassociated petroleum gas and other components ofextracted hydrocarbons,
in particular, helium. The implementation ofprojects Sakhalin-1 and
Sakhalin-2, as well as export ofRussian liquefied natural gas to the
countries ofthe Asia-Pacific region will go on. Coal mining in the region will be increased (primarily at the expense ofdeposits in the South
Yakutia). Construction ofthe first stage ofthe oil pipeline Eastern Siberia Pacific Ocean will be completed. Crude oil loading terminals in
the ports ofNakhodka and De-Kastri, as well as coal terminals in the
ports ofVanino and Vostochniy will be modernized. Production ofheat
and electricity on the base ofrenewable energy will be developed in remote and isolated areas. Construction ofa windfarm may take place in
the south ofthe Primorskiy Territory (the Russkiy and Popov Islands).
Gasification ofthe southern areas ofthe Far Eastern federal district will
be continued on the base ofnatural gas, produced at Sakhalin. Export
ofelectricity to China will be commenced.
At the second phase ofthe Strategy implementation, volumes ofoil
and gas production will be increased. Development ofthe continental
shelf ofthe Sea ofOkhotsk will be continued (projects Sakhalin-3,
Sakhalin-4, Sakhalin-5, and Sakhalin-6). New oil and gas chemical centers will be established, an oil refinery will be constructed in the
Primorskiy Territory. Works on gasification ofindustrial facilities and
communal housing, construction ofexport gas pipelines to the countries ofthe Asia-Pacific region will go on. Production and export ofliquefied natural gas will be expanded. Construction ofthe oil pipeline
Eastern Siberia Pacific Ocean will be completed. Exploitation ofElginskoe coal deposit in the Republic ofSakha (Yakutia) will be commenced. The growth ofcoal production will demand increase in transfer capacity ofrailroads westward and eastward both (for export to the
countries ofthe Asia-Pacific region). The electric energy industry will
enjoy accelerated growth rates, predominantly at the expense ofcoalfired thermal and hydroelectric (included into energy and industrial
complexes) power plants, as well as combined gas-fired heat-and-power
plants in cities. The Central power region ofthe Republic ofSakha (Yakutia) is contemplated to be connected with the Unified power system
ofthe East ofRussia.
122
At the third phase ofthe Strategy implementation, development

ofthe Yakutia gas center (Chayandinskoye, Srednebotuobinskoye,
Taas-Yuryakhskoye and other deposits), hydrocarbon deposits on the
Magadan shelf area and on the Western-Kamchatka sector ofthe Pacific
Ocean will be commenced. Coal production at existing deposits will be
increased, new deposits in the Magadan Region will be commissioned.
Works on connection ofisolated power regions ofthe Republic ofSakha
(Yakutia) and the Magadan Region to the unified power grid will be
continued. Creation ofthe eastern gas transportation network will be
completed, which will make it possible, if necessary, to connect it to the
unified system ofgas supply. Large-scale development ofelectric grids
aimed, among other issues, at the solution ofthe strategic task ofunifying energy systems ofthe Siberia and Far East, will be accomplished.
In 2030, the Far Eastern federal district will be alarge energy-redundant region, fully providing its own demands for primary energy,
including in remote areas at the expense oflocal energy resources and
renewable energy use, and exporting them to the countries ofthe AsiaPacific region. Energy security ofthe Far Eastern federal district will
be totally provided, energy efficiency ofits economy will be largely enhanced.
2. Interaction ofdevelopment ofthe fuel and energy

complex and sectors ofthe industry
The role ofthe fuel and energy complex in the system ofits interaction with the industry is determined by two types ofeconomic relations:
the fuel and energy complex as asupplier offuel, energy, raw materials,
and the fuel and energy complex as aconsumer ofthe finished products ofrelated sectors ofthe industry.
At present the industry consumes over 50% offuel and energy resources produced in the country and about 60% ofelectricity.
The main volume ofindustrial goods consumption in the fuel and
energy complex consists ofproducts ofmetallurgy (first ofall, pipes),
manufacturing (power equipment, electrotechnics, equipment for oil,
gas and coal industries) and chemical industry (reagents, catalytic
agents).
Feedbacks in this system have special significance. Due to high energy intensity ofcertain sectors ofthe industry, limitation ofdeliveries
or unreasonably high prices for fuel and energy resources may lead to
limitation ofproduct deliveries to the fuel and energy complex and influence the economy growth in the country as awhole.
123
The Russian fuel and energy complex reliably satisfies the demands ofindustry for energy and raw materials. Still there are risks
ofnegative impact produced by sharp rise in prices for fuel and energy resources on the industry development. First ofall, this concerns
the sectors using fuel as raw materials (agricultural chemistry, iron
and steel industry).
Russian industry satisfies the demands ofthe fuel and energy complex for equipment and materials at the level of8085%. The situation
is especially complicated with deliveries ofequipment and catalytic
agents for oil refining. The share ofRussian products constitutes only to
3040% in this sphere. Difficult situation exists with deliveries ofRussian machinery to the coal industry.
The key problems ofpower machinery engineering are the shortage
offacilities for production ofrequired nomenclature ofsteam-gas and
gas-turbine generating units, as well as ofhighly efficient and environmentally friendly coal-fired generating units, and also substantial scientific gap ofRussian turbine engineering. Provision ofthe electric energy industry with Russian steam-gas and gas-turbine generating units
does not exceed 50%.
Although some kinds ofRussian equipment dont yield to foreign
equivalents in technical characteristics and reliability, the substantial
part ofthe equipment produced by Russian companies compares poorly by quality and (or) price parameters. Meanwhile, repair ofRussian
equipment under complicated natural and climatic conditions ofthe
country is much cheaper and presents less technical difficulties than
the repair ofimported analogues.
The development ofpower machinery will be based on appropriate
industrial strategy, where the main emphasis will be made on the following:
production oflow-speed steam turbines with the capacity
of1200 MW for nuclear power plants with reactors VVER-1200,
hydraulic turbines with the capacity of1000 MW, steam turbines
and steam boilers for coal-fired generating units running on ultra
supercritical steam parameters, steam boilers using advanced
coal burning technologies with circulating fluidized bed under
pressure, gas turbines with the capacity of65 MW, highly
economical gas turbine units for gas transportation system,
equipment for hydrocarbons production and transportation on
developing the continental shelf ofthe Arctic seas and equipment
for renewable energy use;
124
organization oflicensed production ofproducts which cannot

be developed by Russian scientists and engineers in the nearest
34 years (serial production ofgas turbines with the capacity
of270290 MW and anumber ofothers) at Russian facilities.
The forecasted development ofthe fuel and energy complex opens
awide prospect for the development ofmodern equipment and materials production in Russia, creates opportunities for accelerated
innovative development ofsuch sectors ofthe Russian industry as
manufacturing, defense complex, metallurgy, chemical industry and
construction complex. This area is important for realization ofthe
state economic policy aimed at priority development ofdeeply processed goods production.
The most important factor ofthe growth ofdemand for Russian
equipment and materials for the fuel and energy complex is the enhancement oftheir competitiveness, which is to be provided at the expense ofthe following:
improvement ofdesign and manufacturing technologies ofpower,
oil-and-gas and mining transportation equipment, methods and
systems oftheir quality and reliability enhancement and costs
reduction;
production ofequipment and materials with the use
ofnanotechnologies providing innovative resource-saving and
energy-saving development of the fuel and energy complex;
development ofchemical technologies and processes, systems
for integrating chemical and energy industries, as well as for
equipping energy sector with modern reagents and catalytic
agents;
expansion ofassortment and improvement ofproperties
ofconstruction materials and standard units, including pipes
for over-pressure pipelines, steam pipelines and boiler rooms
running on steam with the pressure over 300 atmospheres and
temperature of570 degrees Celsius;
development and implementation ofefficient automated systems
supporting the entire cycle ofcreation ofperfect hardware,
systems, algorithms and software for management.
The system ofequipment and material purchase by the companies
ofthe fuel and energy complex will be based on competitive bidding
and in most cases realized by means ofopen tenders.
125
Interaction ofentities ofthe fuel and energy complex and the industry contemplates the use ofvarious forms ofcooperation, including the
following:
joint programs ofscientific and technological cooperation and
import substitution;
performance offield tests ofnew equipment and materials;
implementation ofbrand import technologies with gradual
reduction in the share ofimported components;
introduction ofindustrial standards tightening requirements to
working capacity and safety ofthe equipment.
Achievement ofthe stated objectives, use and development ofthe
Russian industrys potential for the energy sector require both state
support and improvement ofeconomic mechanisms oflong-term relationships between the fuel and energy complex and related sectors,
providing selection ofindustrial developments, which are more promising for the fuel and energy complex.
Taking into account the expansion offoreign manufacturers on the
Russian market ofequipment for the fuel and energy complex, the policy ofRussian manufacturers protection by means ofcustoms and tariff
regulation will be pursued, especially at the first phase ofthe Strategy
implementation.
One ofthe most important areas ofimprovement in cooperation between the industry and the fuel and energy complex is the long-term
provision ofdeliveries ofmachinery and metallurgical units with high
degree ofcompleteness and prefabrication. Implementation ofthis area
is necessary to reduce volumes ofconstruction and assembly works
for the purpose ofproviding projected commissioning ofnew facilities
and facilities under reconstruction and other production facilities, the
amount ofwhich is growing in all sectors ofthe fuel and energy complex. Organization ofthe system ofhigh-quality service ofthe equipment provided by manufacturers within the whole period ofits operation is also required.
It is necessary to create and develop modern information system
ofinteraction between entities ofthe fuel and energy complex and
the industry (specialized databases, information, analytical and reference systems, Internet-gateways, electronic trade grounds, etc.). It is
reasonable to use modern information technologies as an instrument
oforganization and support ofall participants involved in the process
ofdevelopment, production and use ofequipment and materials for
126
the fuel and energy complex enabling enhancement ofthe efficiency oftheir operation at the expense ofacceleration ofthe processes
ofproduct research and development, reduction in costs in the processes ofequipment production and operation, as well as improvement ofequipment maintenance.
One ofimportant tasks is the solution ofan import substitution problem (production ofimport substituting products and parts for imported
machinery). In 2030, the needs ofthe fuel and energy complex sectors
are to be satisfied primarily at the expense ofRussian equipment. As
ofthe end ofthe first phase ofthe Strategy implementation, the share
ofimported machinery in the volume ofpurchased equipment shall not
exceed 12%, as ofthe end ofthe second phase not more that 8%, and
it will have been reduced to 35% by 2030. It is forecasted that Russian
industry will have assimilated upto9598% ofthe product range for
the fuel and energy complex.
The volumes ofinvestments and construction and assembly works
are to grow substantially in the fuel and energy complex and in all its
sectors in order to satisfy the forecasted demand for fuel and energy.
According to the estimates, annual volumes ofconstruction and assembly works in the fuel and energy complex may be increased by afactor
of22.5 by 2030. This will require increase in capacities ofconstruction industry. For the purpose ofwork acceleration and reduction in labor costs directly on construction sites, it is necessary to enhance prefabrication grade ofconstruction materials, as well as the productivity
ofmechanical means.
127
VIII. Expected results and the Strategy

implementation system
1. Expected results
As aresult ofmeasures provided by the Strategy, the Russian energy sector will make the fundamental contribution into the transition to
sustainable innovative development ofthe Russian economy and provide for the following:
extended reproduction ofRussias cumulative energy potential;
necessary development ofenergy infrastructure;
stimulation ofinnovative development ofrelated sectors.
Russia will become aregional leader in the sphere ofEurasian energy security provision on the base ofthe following:
efficient influence on provision ofstable and predictable price
situation on regional energy markets;
rationalization ofenergy flows in Eurasia by means ofactive use
ofRussian energy infrastructure and its full-scale economic and
technological integration with the Eurasian system ofenergy
communications;
enhancement oflong-term stability ofenergy demand and
supply in Eurasia at the expense ofthe Russian energy export
development and active dialogue with countries-producers and
countries-consumers ofenergy resources in the region.
The Russian energy sector will undergo qualitative changes and become amodern, highly technological, efficient, sustainably developing
complex, the most important component ofwhich will be not just natural resources potential, but rather human and innovative potential.
The following aspects will be provided in accordance with the Strategy:
guaranteed energy security ofRussia and its regions;
full-scale participation ofRussia in global energy security system
formation, including at the expense ofdiversification ofthe
energy export destinations;
reduction in the countrys economic well-being dependency on
the oil and gas sector with the reduction in the fuel and energy
complexs share in the structure ofthe gross domestic product
from 30 to 18%;
decrease in energy intensity ofthe gross domestic product at
least by afactor of2.3;
128
optimization ofthe structure ofthe Russias fuel and energy

balance with reduction in the share ofgas in domestic energy
consumption from 52 to 4647% and increase in the share ofnonfuel energy from 11 to 1314%;
energy development ofnew regions;
development ofsocial partnership between the energy business
and the society;
enhancement offinancial and economic sustainability and budget
efficiency ofbusiness entities ofthe fuel and energy complex,
provision oftheir stable investment sufficiency;
innovative renewal ofproduction assets and energy infrastructure,
creation and development ofnew kinds ofenergy and energy
technologies;
environmental safety and efficiency ofdevelopment and
functioning ofthe fuel and energy complex with limitation ofthe
amount ofgreenhouse gases emissions by 2030 uptothe level
of100105% as compared to the level of1990.
Generally, implementation ofthe Strategy and ofthe state energy
policy stated in the Strategy will make it possible to satisfy demands
to the energy sector resulting from the projected transition ofthe countrys economy to the innovative path ofdevelopment and enhance leading positions ofRussia on the world energy markets.
2. The Strategy implementation system

The system ofthe Strategy implementation is based on the following
principles:
interdependent implementation of2 processes: main provisions
ofthe state energy policy realization and specification ofthe
most important measures on the energy sector development;
determination ofthe most important guidelines and concentration
ofavailable resources for their achievment at each phase ofthe
Strategy implementation;
organization ofsystematic advanced monitoring ofthe Strategy
implementation at the background ofthe progress and results
ofthe social and economic development ofthe Russian Federation
for comparison ofactual and expected results ofthe state
energy policy realization with indicators ofthe integrated plan
(roadmap) ofmeasures on its implementation and forecasted
indicators ofthe fuel and energy complex development.
129
Adherence to the mentioned principles will make it possible not only

to compare actual results ofthe fuel and energy complex activity with
the target indicators ofthe Strategy, but also to perform adjustment
ofcurrent guidelines ofthe state energy policy, keeping its main objective preserved. This must be one ofthe most important mechanisms
ofreduction in risks ofthe Strategy implementation.
The system ofthe Strategy implementation also provides for the following:
adoption oflegislative acts providing for implementation ofthe
main provisions ofthe Strategy;
inclusion ofrequired measures providing the Strategy
implementation into the plan ofactions ofthe Government ofthe
Russian Federation aimed at realization ofguidelines ofthe
social and economic development ofthe Russian Federation for
the corresponding period;
consideration ofthe basic provisions ofthe Strategy at
development ofcorporate and regional strategic documents and
preparation ofinvestment plans and programs in the energy
sector;
improvement ofthe system ofperformance indicators ofthe state
energy policy;
information and analytical support ofthe Strategy implementation
monitoring system on the basis ofstate information resources,
attraction ofvarious socio-political entities and associations,
representatives oflegislative power, mass-media, scientific
centers and institutes;
timely detection and system analysis ofoccurring changes for
the purpose ofpreventing and overcoming negative trends which
influence the energy security ofthe country.
Measures ofthe state energy policy provided for by the Strategy are
classified by the following areas:
enhancement ofgeological exploration works on new territories
and waters;
stimulation ofprivate investment attraction into geological
exploration works and subsoil use;
stimulation ofefficient subsoil use on the basis offull and
comprehensive extraction ofhydrocarbons from subsoil;
130
development ofthe market ofindependent

engineering in the sphere ofsubsoil use;
services
and
improvement ofthe state control over the level ofeconomic

concentration on energy markets;
establishment and development ofRussian systems ofexchange
trade in all kinds offuel and energy resources;
formation ofefficient and stable tariff and pricing systems on
energy markets;
reduction in the share ofgas in the structure ofdomestic energy
consumption and increase in the share ofnon-fuel energy in the
structure ofthe fuel and energy balance;
rationalization ofexport and domestic consumption offuel and
energy resources;
promotion ofproduction, export and domestic consumption
ofenergy carriers with high added value;
improvement ofinteraction between federal and regional
authorities in the energy sector;
state support ofregional and interregional energy infrastructure
development;
stimulation ofcomprehensive development ofthe regional
energy sector;
establishment ofthe sustainable national innovative system in
the energy sector;
provision ofreliable energy supply to the countrys population at
socially affordable prices;
expansion ofreal interaction between the energy business and
the society in solution ofthe problems ofthe energy sector
development;
development and enhancement ofefficiency ofthe human
potential use in the energy sector;
consideration ofRussias national interests in the context ofthe
developing system ofworld energy markets operation;
diversification ofthe export energy markets;
diversification ofexport commodities structure, increase in the
volume ofexport ofproducts with high added value;
131
provision ofstable conditions on export markets, including

guarantees ofdemand and justification ofprices for main
products ofthe Russian energy export;
enhancement ofpositions ofleading Russian energy companies
abroad;
provision ofefficient international cooperation in risky and
complicated projects implemented in Russia (including shelf
projects under the Arctic conditions).
The integrated plan (roadmap) ofthe state energy policy measures
for the period upto2030 providing for the Strategy implementation is
given in Appendix 5.
The report on the progress ofthe implementation ofmeasures provided in the Strategy is submitted to the Government ofthe Russian
Federation annually. In the context ofthe stated report, analysis and
preparation ofthe following offers are made:
provision ofthe major strategic guidelines achievement: energy
security, energy efficiency, budget efficiency and environmental
safety ofthe energy sector;
performance ofthe main groups ofthe state energy policy
measures provided by the Strategy;
provision
ofachievement
ofthe
strategic
indicators
ofdevelopment ofthe fuel and energy complexs industries.
Improvement and specification ofthe Strategy to be performed at
least once in 5 years with simultaneous prolongation ofits timeframes.

132
APPENDIX 1
to the Energy Strategy ofRussia for the period
upto2030
Key development indicators ofthe economy and fuel and energy
complex ofRussia in 2008 and forecast ofthe Energy Strategy
ofRussia for the period upto2030*
Indicators
Gross domestic product

growth
(in % as compared to 2000)
2008
forecast ofthe
Energy Strategy
ofRussia for the
period upto2020
actual
figures
The ratio ofactual and

forecasted indicators
ofthe Energy Strategy
ofRussia for the period
upto2020 (%)
148.4
165.1
111.2
Industrial production growth

141
146.7
104
Average annual world market

price ofoil (Urals)
($US/barrel)
24
94.6
394.1
Average annual contract price

ofgas ($US/1,000 m3)
120
353.7
294.8
Growth ofprimary energy

production
123.2
126.4
102.6
Primary energy production

(million tons ofcoal
equivalent)
1,747
1,797.8
102.9
Oil production
(million tons)
476
487.6
102.4
Gas production
(billion m3)
638
663.6
104
Coal production
(million tons)
300
326.1
108.7
Electricity production
(billion kWh)
1,009
1,037.2
102.8
Primary energy consumption

equivalent)
1,043
990.9
94.9
Growth ofprimary energy

consumption
(in% as compared to 2000)
115.4
110.2
95.5
133
Indicators
Liquid fuel consumption

equivalent)
Gas consumption
equivalent)
Solid fuel consumption
equivalent)
Electricity consumption
(billion kWh)
Growth ofenergy export (in%
as compared to 2000)
Total energy export (million
tons ofcoal equivalent)
2008
forecast ofthe
Energy Strategy
ofRussia for the
period upto2020
actual
figures
The ratio ofactual and

forecasted indicators
ofthe Energy Strategy
ofRussia for the period
upto2020 (%)
218
187.3
85.9
516
525.7
101.9
195
175
89.7
980
1,019.6
104
146.9
150.2
102.2
805
882.7
109.6
332
360
108.4
250
32
247.5
97.5
99
304.7
78
66.7
85.5
76.4
71.5
93.6
including:
oil and oil-products (million
tons)
gas (billion cub. m)
coal (million tons)
specific energy intensity (in%
as compared to 2000)
specific electricity intensity
*According to optimistic scenario ofthe Energy Strategy ofRussia for the period
upto2020.

134
Forecast ofthe domestic demand for main energy resources

for the period upto2030*
Indicators
Domestic primary energy
consumption (million tons
ofcoal equivalent)
same
Domestic oil consumption
(refining) (million tons)
same
Domestic gas consumption
(billion m3)
same
Domestic solid fuel
ofcoal equivalent)
same
Domestic consumption
ofelectricity (billion kWh)
same
2005
actual
2008
actual
Phase
1
Phase
2
Phase
3
949
991
100
104
106117
122132
145165
208
236
232239
249260
275311
100
113
112115
120125
132150
443
457
478519
539564
605641
100
103
108117
122127
137145
167
174
168197
198238
248302
100
104
98115
116140
145177
941
1,020
100
108
1,0081,107 1,1601,250 1,3751,565
1,0411,218 1,3151,518 1,7402,164

111130
140161
185230
* This and the following tables show the variation range ofboth the overall figures and
their separate components without generating complex low and high scenarios.
135
Forecast ofthe Russian energy export for the period upto2030

Indicators
Total energy export
(million tons ofcoal equivalent)
same
including:
crude oil
(million tons)
natural gas
(billion m3)
coal
electricity
(net export, billion kWh)
2005
actual
2008
actual
Phase
1
Phase
2
978
1,013
865
883
913943
100
102
106109 113117
253
243
243244 240252 222248
256
241
270294 332341 349368
58
70
7274
7475
6974
12
17
1825
35
4560

136
Phase
3
974985
113114
APPENDIX 2
to the Energy Strategy ofRussia
Indicators ofenergy security
Phase 1
at least 10%
Phase 2
Energy per capita consumption growth,
at least 20%
Phase 3
at least 40%
Electricity per capita consumption growth,

at least 13%
at least 43%
at least 85%
Engine fuel per capita consumption growth
at least 23%
at least 41%
at least 70%
Reduction in average depreciation rate ofbasic production assets
by 10%
by 10%
by 5%
Liquidation ofdeficit and maintenance ofstable reserves ofelectricity- and heat
generation facilities, including maintenance ofpower plants spare capacity at the
level of17% ofthe overall installed capacity ofpower plants in the UES ofRussia
Indicators ofenergy efficiency ofthe economy

Phase 1
Phase 2
Phase 3
Gross domestic product specific energy intensity
no more than 78%
no more than 57%
no more than 44%
Creation ofadditional energy potential for economic development
at least
at least
at least
100 million tons ofcoal
equivalent per year
equivalent per year
equivalent per year
Creation ofhigh-technology segment ofenergy services at the rate of
at least
at least
at least
200 bln. RUR per year
Average annual decrease in specific losses and auxiliaries at energy enterprises
(in% as compared to the preceding year)
at least 1%
at least 1%
at least 0.5%
Decrease in specific fuel consumption for heat generation by boiler rooms
at least 2%
at least 6%
at least 10%
137
Indicators ofeconomic and budget efficiency ofthe fuel

and energy complex
Phase 1
Phase 2
Phase 3
Creation ofdynamically stable and predictable institutional and legal environment

for the energy sector functioning
Harmonization ofthe fuel and energy complex contribution into the country's
budgetary system tax revenues and into total amount ofinvestments into fixed
capital, providing financial and economic stability ofenergy companies when
performing the budgetary obligations
Indicators ofenvironmental security ofthe fuel

and energy complex
Phase 1
Phase 2
Phase 3
Reduction in specific indicators ofpollutants emission into the atmosphere, waste
waters discharge and wastes generation by the energy sector enterprises
at least 25%
at least 40%
at least 50%
Greenhouse gases emission level
no more than 83%
no more than 90%
no more than 105%
Associated petroleum gas utilization ratio
95%
95%
95%

138
APPENDIX 3
to the Energy Strategy ofRussia
Indicators ofstrategic development ofmineral resource
baseofthe fuel and energy complex for the period upto2030
Indicators/directions
Phase 1
Phase 2
Oil reserves increment (million tons)
Russian Federation total
1,854
5,597
including:
Western Siberia
1,205
2,500
Eastern Siberia
165
1,200
European North
91
330
Natural gas reserves increment (billion m3)
4,100
5,400
including:
Western Siberia
1,200
2,100
Eastern Siberia
480
1,400
the seas ofRussia
350
1,700
Deep drilling (thou. meters)
Phase 3
5,122
2,500
1,200
200
6,500
3,000
1,200
2,000
7,350
24,100
39,850
3,300
12,250
2,300
including:
Western Siberia
Timano-Pechorskaya area
700
1,600
1,800
Eastern Siberia
1,250
3,300
6,100
the seas ofRussia
850
2,150
3,200
Exploration seismology (thou. km)
730
1,180
1,500
including:
Western Siberia
240
350
500
Eastern Siberia
190
270
350
the seas ofRussia
180
350
500
Coal reserves increment (%)
Average annual growth ofbalance reserves
0.50.8
11.5
23
The share ofcoal balance reserves economically
efficient for extraction according to the world
4850
5558
6065
standards
Uranium reserves and resources increment
Ensuring ofreserves increment by 2030 to the extent of(million tons):
1150, 2300; forecast resources 11,200, 22,000, 31,700
139
Indicators ofstrategic development ofthe oil complex

2008
Phase
(actual)
1
Efficiency ofsubsoil use
Oil recovery rate (%)
30
3032
Oil production
The share ofthe Eastern Siberia
3
1012
and Far East in oil production (%)
Oil transportation
Capacity gain ofthe trunk pipelines
for oil supply to the far-abroad countries
2
3652
Oil refining
Refining depth (%)
72
79
Light oil products yield (%)
57
64
Nelson complexity index
4,3
6
(units)
Oil products per capita consumption
0,5
1
(ton/person)
Oil and oil-products export
The share ofthe eastern direction in the
total volume ofoil and oil products export
8
1011
(%)
Phase
2
Phase
3
3235
3537
1214
1819
6167
6570
8283
6768
8990
7273
6,5
8,5
1,11,3
1,31,6
1415
2225
Indicators ofstrategic development ofthe gas industry

for the period up to2030
2008
(actual)
Gas production
The share ofthe new regions in total gas
2
production (%)
including:
Yamal
Eastern Siberia and Far East

2
The share ofindependent gas producers
and vertically integrated oil companies
17
intotal gas production (%)
Phase 1
Phase 2
Phase 3
1314
2123
3839
6
78
9
1214
2324
15
20
2526
27

140
2008
(actual)
Gas transportation
Trunk pipelines length increase
3
The share ofreconstructed working gas
pipelines (%) in total length ofthe unified
4
system ofgas supply
Gas export
The share ofthe Asia-Pacific region in the
export structure (%)
The share ofliquefied natural gas in

export structure (%)
Phase 1
Phase 2
Phase 3
810
1315
2023
1011
1213
2526
1112
1617
1920
45
1011
1415
Indicators ofstrategic development ofthe coal industry

2008
Phase
(actual)
1
Coal production and transportation
The share ofnewly commissioned
4
56
capacities in coal production (%)
The share ofthe eastern regions ofthe
country (Kansko-Achinsk basin, Eastern
33
3839
Siberia, Far East) in coal production (%)
Sea port coal terminals capacity
110
125
Coal processing
Thermal bituminous coal enrichment
32
3540
coverage (%)
Calorific value ofdomestically consumed
0,62
0,65
coal fuel
Technical progress and innovations
The share ofprogressive extraction
technologies in total coal production:
underground mining method
25
3540
(mine-lava)
open-cut mining
(continuous and cyclical-and-continuous
20
3035
mining)
The share ofcoal used for deeply
processed coal products recovery in total
volume ofcoal production (%)
Phase
2
Phase
3
1520
2530
4142
4647
150
175
5560
6570
0,7
0,75
5560
6570
4050
60
1,5
58
141
2008
Phase
Phase
Phase
(actual)
1
2
3
Economic efficiency ofthe coal industry
Increase in coal production per one
person employed in the industry
110
150
250260 375420
The rate ofbreakage face load increase
120
135140 200250 400450
Environmental efficiency ofthe coal industry
The level ofsoil reclamation relative to
50
60
6570
100
annual dislocation volume (%)
The rate ofdirty discharge relative to
87
8085
7060
3035
overall discharge (%)
Water rotation ratio
0.7
0.73
0.80.85 0.90.95
Indicators ofstrategic development ofthe electric energy industry

2008
Phase
Phase
(actual)
1
2
The share ofnon-fuel energy in the
at least
32.5
at least 35
electricity production structure (%)
34
Fuel supply ofthermal power plants
The share ofgas in the fuel supply
70.3
7071
6566
structure (%)
The share ofcoal in the fuel supply
26
2526
2930
structure (%)
Energy security and electricity supply reliability
The probability ofthe Russian power
at least
at least
0.9960
systems deficit-free operation
0.9990
0.9991
Efficiency ofelectric energy industry
Coal-fired power plants performance
at least
at least
34
index (%)
35
38
Gas-fired power plants performance
at least
at least
38
index (%)
45
50
Nuclear power plants performance
at least
at least
32
index (%)
32
34
Specific fuel consumption for electricity
no more no more
production at thermal power plants,
333
than 315 than 300
grams ofcoal equivalent/ kWh
(99)
(94)
(90)
Losses in power grids (percentage
no more no more
13
ofelectric supply to the grid)
than 12
than 10

142
Phase
3
at least
38
6062
3436
at least
0.9997
at least 41
at least 53
at least 36
no more
than 270
(81)
no more
than 8
Indicators ofstrategic development ofthe heat supply

2008
Phase
Phase
(actual)
1
2
Energy security and the heat supply reliability
no more
no more
Heat supply cut-off rate, 1/year
0.27
than
than 0.25
0.20
Heat supply cut-off rate due to the fault
no more no more
0.06
ofsources, 1/(sourcesyear)
than 0.05 than 0.03
Renovation ofheat supply network
at least
at least
2
(percentage oftotal length)
10
40
Innovative development ofthe heat supply
The share ofsystems equipped with new
at least
at least
highly effective operation technologies
10
40
80
(%)
Efficiency ofthe heat supply
Fuel heating power utilization at heat and
at least
at least
5
power plants (in% as compared to 2005)
15
40
Average specific fuel consumption at
no more no more
99
boiler rooms (in% as compared to 2005)
than 98
than 94
Increase in energy efficiency ofbuildings
at least
at least
5
10
30
Heat losses (percentage oftotal heat

production)
19
no more
than 16
no more
than 13
Phase
3
no more
than 0,15
no more
than 0.01
at least
90
100
at least
50
no more
than 90
at least
50
no more
than
810
143
APPENDIX 4
to the Energy Strategy ofRussia for the period
upto2030
Forecasted fuel and energy balance ofRussia
2005
2008
(actual) (actual)
949
991
100
104
Phase
1
1,008
1,107
106116
495
181
167
106
526
187
175
103
528573
195211
168197
117127
gas
52.2
53.1
51.8
52.3
liquid fuel (oil and condensate)
19.1
18.9
1919.4
solid fuel (coal, etc.)
17.6
17.7
16.717.8 17.119.1
non-fuel
11.2
10.4
11.511.6 11.211.8 11.814.3
865
883
913943
to the CIS countries
177
162
including gas
to far-abroad countries
including gas
Energy reserves increment
Total energy consumption
Resources (million tons ofcoal
equivalent)
including:
import
110
688
184
91
720
190
-1
10
1,813
1,884
1,813
1,884
80
83
Domestic energy consumption

same (in% as compared to 2005)
including (million tons ofcoal
equivalent)
gas
non-fuel
same (%)
Energy export (million tons

of coal equivalent)
including:
Phase
2
1,160
1,250
122131
Phase
3
1,375
1,565
144164
592619
240245
198238
130147
656696
309343
248302
163224
49.551.1 44.547.7
19.620.7
21.9
22.5
1819.3
978
1,013
974985
172175
174179
153171
101103
741768
210235
100105
804834
281287
90106
803832
311317
1,923
2,052
1,923
2,052
2,140
2,266
2,140
2,266
2,363
2,542
2,363
2,542
96100
9293
8687

144
including gas
Total primary energy
production (million tons ofcoal
equivalent)
including (million tons ofcoal
equivalent):
2005
2008
(actual) (actual)
64
64
Phase
1
7680
Phase
2
7980
Phase
3
8081
1,733
1,803
1,827
1,952
2,047
2,173
2,276
2,456
100
104
105113
118125
131142
gas
736.5
760.9
784853
919958
1,015
1,078
667.2
694.2
691705
718748
760761

non-fuel
same (in%):
202.8
126.5
221.8
126.1
212260
134140
246311
156164
282381
219236
gas
42.5
42.2
42.9
43.7
43.9
44.6
38.5
38.5
36.137.8

non-fuel
11.7
7.3
12.3
7
11.613.3
6.97.7
44.1
44.9
34.4
35.1
1214.3
7.28
3133.4
12.415.5
9.59.6
The forecast ofphase-by-phase oil production development

2005
2008
(actual) (actual)
Phase
1
486
495
103
105
Phase
2
505
525
107
112
Phase
3
530
535
113
114
Total oil production (million tons)
470.2
487.6
100
103.7
24.5
29.1
3235
3536
4243
52.7
49.2
4.9
54.1
52.6
4.8
Tyumen Region
320.2
319
Tomsk Region
Eastern Siberia
Far East
14.1
0.2
4.4
13.7
0.5
13.8
4950
4547
711
282
297
1213
2133
2325
4445
3641
1920
275
300
1112
4152
3031
3436
2529
2122
291
292
1011
7569
3233
including
(million tons):
North,
North-West
Volga Region
Urals
Caucasus, Caspian Sea Region
145
The forecast ofphase-by-phase oil refining and major oil products

output for the period upto2030
2005
2008
(actual) (actual)
Phase
1
232
239
112
115
Phase
2
249
260
120
125
Phase
3
275
311
132
150
151
155
4647
179
188
5557
106
111
2529
Total refining
(million tons)
208
237
100
113,8
engine fuel
100.2
114.1
gasoline
32
35.8
133
140
4143
diesel fuel
60
69
7983
9091
fuel oil
56.7
63.9
4850
4042
Production by oil product types

(million tons):
Forecast ofthe required capital investments into the oil complex

development for the period upto2030
($US billion, at constant prices ofthe year 2007)
Capital investments
Total
including:
exploration and production
refining
transportation
Phase
1
Phase
2
Phase
3
162165
134139
313321
Total
2009 2030
609625
110111
2122
3132
109112
89
1718
272278
1819
2324
491501
4750
7174
The forecast ofphase-by-phase gas production development

for the period upto2030 (billion m3)
2005
(actual)
2008
(actual)
Phase
1
Phase
2
Phase
3
641
664
685745
803837
885940
585
600
580592
584586
608637
Nadym Purtazovsky
582
592
531559
462468
317323
Ob-Taz bay
07
2021
6768
Gas production total

including:
Tyumen Region
including the following
regions:

146
2005
(actual)
2008
(actual)
Phase
1
Phase
2
Bolshekhetskaya valley
Yamal
Tomsk Region
European regions
Phase
3
910
2425
3032
1244
7276
185220
67
56
45
46
46
5491
116119
131137
Caspian Sea Region

Stockman deposit
820
023
2022
5051
2122
6971
Eastern Siberia
913
2655
4565
Far East
3440
6567
8587
3136
3637
5051
including:
including:
Sakhalin Island
Forecast ofthe required capital investments into the gas industry

Capital investments
Total
including:
production
transportation
underground gas
storage facilities, gas
conversion, etc.
Phase
1
150155
Phase
2
131136
Phase
3
284299
Total 2009
2030
565590
4546
7375
4345
6365
98103
141149
186194
277289
3234
2526
4547
103107
The forecast ofphase-by-phase coal production development

for the period upto2030 (million tons)
Coal production
including coking
including:
Donetsk basin
Urals basin
Pechora basin
2005
(actual)
299
69
2008
(actual)
326
66
Phase
1
314350
7084
Phase
2
365410
9094
Phase
3
425470
101106
8
5
13
7
4
13
56
23
1213
78
34
1213
58
58
1213
147
Kuznetsk basin
Kansko-Achinsk basin
Eastern Siberia
Far East
2005
(actual)
166
37
37
32
2008
(actual)
184
46
40
32
Phase
1
174186
4555
4046
3238
Phase
2
190195
5587
5354
3946
Phase
3
201205
90115
5860
4457
The forecast ofphase-by-phase electricity production

2005
2008
(actual) (actual)
Electricity consumption,
domestic demand,
(billion kWh)
Electricity export
net balance, (billion kWh)
Total electricity production
(billion kWh)
including:
nuclear power plants
generating facilities on
renewable energy and
hydroelectric pumped storage
power plants
condensation power plants
heat and power plants
Electricity production structure
(%):
power plants
Phase
1
Phase
2
Phase
3
941
1,021
1,041
1,218
1,315
1,518
1,740
2,164
12
16
1825
35
4560
953
1,037
1,059
1,245
1,350
1,555
1,800
2,210
149
163
194220
247282
356437
175
167.5
181199
224240
319422
277
352
322
385
299423
385403
432592
441447
620873
478505
15.7
15.7
17.618.3 18.218.3 19.719.8
18.3
16.1
1617.1
29.1
31.1
28.234
3238.1
34.4
39.5
36.9
37.1
32.4
36.4
28.3
33.1
21.628.1
15.416.6 17.719.1

148
The forecast ofphase-by-phase change ofRussian power plants

installed capacity (by generation types)
for the period upto2030 (million kWh)
Total installed capacity

including:
power plants
2005
(actual)
216.3
2008
(actual)
224.9
Phase
Phase
Phase
1
2
3
239267 275315 355445
23.7
23.8
2833
3741
5262
46.2
47.2
5559
6673
91129
67.1
79.3
68.4
85.5
6783
8992
73103
9899
100148
106112
Forecasted thermal power plants fuel demand for the period

upto2030 (million tons ofcoal equivalent)
Total fuel demand

including:
gas
solid fuel
(coal, etc.)
fuel oil
2005
(actual)
286
2008
(actual)
304
Phase
1
296333
Phase
2
348388
Phase
3
416460
194
214
210222
233237
265266
77
79
74101
97137
131185
56
67
67
Forecast ofthe required capital investments into the electric

energy industry development for the period upto2030
Total
including:
hydroelectric power plants
with capacity over 25 MW and
power plants
thermal power plants
(condensation power plants and
heat and power plants)
electric grids
Phase
1
122126
Phase
2
110233
Phase
20092030
3
total
340529
572888
2930
1328
5881
100139
1718
815
3092
55125
3233
46112
122145
200290
4445
4378
130211
217334
149
The forecast ofphase-by-phase consolidated heat balance change

in Russia
for the period upto2030 (million Gcal)
2005
(actual)
2008
(actual)
1,977
1,938
1,431
1,380
power plants
628
601
central boiler houses

nuclear heat and power plants
and nuclear heat supply plants
secondary energy resources
unconventional sources
Decentralized heat supply
sources
including:
boiler houses
autonomous sources
Total heat losses
701
676
46
68
1215
91
7
93
5
98107
45
107116
410
118135
635
541
537
530550 510530 510540
192
349
355
187
350
334
Total consumption
1,622
1,604
180190 150160 140150

350360 360370 370390
310320 230270 180190
1,589
1,745
1,950
1,655
1,760
1,960
Total production
Centralized heat supply
sources
including:
Phase
1
1,899
1,975
1,369
1,425
Phase
2
1,975
2,030
1,465
1,500
Phase
3
2,130
2,150
1,610
1,620
680
785830
690
661688 659686 640654
601620
Forecast ofthe required capital investments into the development

ofthe fuel and energy complex and energy supply ofRussias
economy for the period upto2030
Fuel and energy complex

total
including:
oil industry
gas industry
coal industry
electric energy industry
Energy supply spheres
total
Phase
1
Phase
2
Phase
3
2009
2030
total
449456
391523
9791,196
1,8192,177
162165
150155
1213
122126
134139
131136
1416
110233
313321
284299
4247
340529
609625
565590
6876
572888
8598
125142
329356
547588

150
including:
renewable energy *
centralized heat supply
autonomous energy
energy saving in the economy
Total for the Strategy
implementation
Phase
1
Phase
2
Phase
3
2009
2030
total
79
4143
89
2937
2428
3839
8
5567
534554
516665
8297
6872
2427
155160
1,308
1,552
113134
149152
4143
244259
2,366
2,765
*Except the hydroelectric power plants with the capacity over 25 MW.
Comparison ofthe Strategy's basic ranges offorecasts

withpredictive estimates ofthe alternative innovative scenario
envisaging swifter growth ofthe economy's energy efficiency
andfocus on the environment
2030
Indicators
The share in the gross domestic

product (%)
energy-intensive sectors
(metallurgy, chemistry, etc.)
fuel production
Gross domestic product energy
intensity (in% as compared to
2005)
electricity intensity (in% as
compared to 2005)
Greenhouse gases emission
Total domestic energy
ofcoal equivalent)
including gas
Electricity consumption,
domestic demand
(billion kWh)
the Strategy's
basic ranges
offorecasts
predictive
estimates
ofthe
alternative
innovative
scenario
The ratio between

alternative scenario
predictive
estimates
and the Strategy's
basic range
offorecasts (%)
10.410.6
6667
3.53.6
2,8
7880
4446
39
8589
5960
52
8788
94105
80
7685
1,3751,565
1,195
7687
656696
590
8590
1,7402,164
1,580
7391
151
2030
Indicators
Total primary energy production

including gas
(billion kWh)
including by thermal power
plants
Total fuel consumption by power
plants (million tons ofcoal
equivalent)
including gas
Total energy export (million tons
ofcoal equivalent)
including gas (billion m3)
Investment into the fuel and
energy complex development
($US billion, at constant prices
ofthe year 2007)
the Strategy's
basic ranges
offorecasts
predictive
estimates
ofthe
alternative
innovative
scenario
The ratio between

alternative scenario
predictive
estimates
and the Strategy's
basic range
offorecasts (%)
2,2762,456
2,130
8794
1,0151,078
960
8995
1,8002,210
1,620
7390
1,0981,382
995
7291
414460
357
7886
265266
240
9091
974985
1,010
103104
349368
346
9499
1,8192,177
1,610
7489

152
153
Phase 2
Phase 3
Subsoil use and management ofthe state subsoil fund
1. Enhancement ofgeological exploration works on new territories and waters
Increase
in
the
influence
ofstate
State support ofgeological exploration
Acceleration ofthe reserves increment on
institutions on formation and implementation works on perspective territories on new territories and waters in the structure
ofthe programs for geological exploration the basis ofdirect state participation; ofmineral resource base reproduction.
ofperspective
territories
and
waters provision ofstate guarantees to subsoil
Increase in the share ofthe continental
(continental shelf).
users; provision oftax holiday for the shelf in the reserves reproduction:
Elaboration and introduction ofspecial tax investments projected payback period
for oil to the level ofat least
regulations for developing the reserves ofthe and the investment tax credit
1015%
continental shelf ofRussia
for gas to the level ofat least
2025%
2. Stimulation ofprivate investment attraction into geological exploration works and subsoil use
Elimination ofsuperfluous administrative
Introduction ofrent taxation ofthe
Development
ofthe
state-private
barriers for geological exploration works subsoil users performing geological partnership in subsoil use
realization through introduction ofstandard exploration works
subsoil use projects and reduction in the
number ofstate expertise
Stabilization oftax policy in the sphere
Ensuring the ratio ofannual increment
Stable (at least twofold for the period)
ofsubsoil use and creation ofconditions for ofdiscovered fuel and energy resources growth ofprivate investment volumes in
transition to rent taxation ofthe subsoil users. as aresult ofgeological exploration subsoil use and geological exploration
Ensuring ofthe rights ofboth subsoil owner, works and the annual production volume works (the share ofprivate investments in
and subsoil user, including introduction ofmajor fuel and energy resources (oil, geological exploration works at least
oftransparent system ofsanctions for license gas, coal, uranium) >1
80%)
agreements infringement
Phase 1
Master plan ("roadmap") ofthe state energy policy measures for the period upto2030,
ensuring the Strategy implementation
to the Energy Strategy ofRussia for the period upto2030
APPENDIX 5

154
Phase 1
Phase 2
Phase 3
3. Stimulation ofefficient subsoil use on the basis offull and comprehensive extraction ofhydrocarbons from subsoil
Creation ofthe national register offuel and
State support for introduction
Tax stimulation ofthe expanded
energy resources on the basis ofharmonization ofinnovative hydrocarbon extraction production ofsuperviscous oil, natural
ofthe Russian and international classification technologies raising the oil recovery bitumen, low pressure gas in old deposits
offuel and energy resources.
rate
and complex use ofthe resources ofcoal
Improvement ofthe mechanisms ofthe state
deposits, including the projects for
control over fulfillment oflicense agreements,
degassing methane utilization
ensuring ofaccounting ofprobabilistic nature
ofreserves estimation and possibility ofits
adjustment for the purpose ofmost rational
field exploitation.
Improvement
ofthe
tax
legislation
stimulating full and comprehensive extraction
ofhydrocarbons.
Development and introduction ofuniform
principles for fuel and energy resource
deposits management at all phases: from
prospecting to beginning ofconservation or
liquidation ofa deposit due to achievement
ofthe maximum possible recovery rate
ofhydrocarbons at the existing technological
level ofdevelopment methods
State support for introduction ofinnovative
hydrocarbon extraction technologies raising
the oil recovery rate.
Tax
stimulation
ofthe
production
ofsuperviscous oil, natural bitumen, low
pressure gas in old deposits
Maintenance ofthe oil recovery rate at the
Increase in the oil recovery rate to 35
level of3032%
37%
Increase in the share ofnon-conventional
Increase in the share ofnon-conventional
gas in total gas production volume to 10%
gas in total gas production volume to 15%
Maintenance ofthe associated petroleum
Maintenance
ofthe
associated
Maintenance ofthe associated petroleum
gas utilization rate at the level ofat least 95% petroleum gas utilization rate at the gas utilization rate at the level ofat least
level ofat least 95%
95%
155
5. Improvement ofthe state control over the level ofeconomic concentration on energy markets
Toughening ofthe antimonopoly law for the
Establishment ofthe integrated system
Enhancement ofthe efficiency ofstate
purpose ofsuppressing the cartel agreements ofthe energy markets monitoring based control over the level ofeconomic
on the fuel and energy resources market and on the state information resources ofthe concentration
technological monopolizm (including the fuel and energy complex
questions ofconnecting to transport networks
and grids)
Ensuring
oftransparent
and
Transparent and nondiscriminatory
Elimination ofregional and technological
nondiscriminatory access to the energy access to the energy infrastructure for monopolizm
infrastructure
(among
other
issues all participants ofthe market
obligating the enterprises which manage the
infrastructure to provide the information on
availability or absence offree capacity).
Creation ofthe state information system
ofthe fuel and energy complex
Development ofdomestic energy markets
Phase 1
Phase 2
Phase 3
4. Development ofthe market ofindependent services and engineering in the sphere ofsubsoil use
Stimulation
ofRussian
independent
Development
ofservices
and
engineering companies creation.
engineering market in the sphere
State support for the import ofkey complex ofsubsoil use
technologies with obligations for their
localization
Increase in the share ofan independent
Increase in the share ofan independent
segment in the sphere ofservices and
segment in the sphere ofservices and
engineering to 20%
engineering to 50%

156
Phase 2
Phase 3
6. Establishment and development ofRussian systems ofexchange trade in all kinds offuel and energy resources
Stimulation
ofprivate
companies
Stimulation
ofthe
expansion
participation in exchange trade in energy ofexchange trade in energy carriers
carriers through obligatory reservation on Russian trading floors which carry
oftransport systems capacity for exchange out accounts in roubles through the
trade provision, obligatory execution ofa part following:
ofstate purchases ofenergy carriers through
involving
foreign
companies
exchange mechanisms.
producing and consuming energy
Development ofthe regulatory and legal resources (including from the CIS
framework allowing integration ofstock countries) in operations on the Russian
exchange pricing mechanisms into the pricing exchange trade grounds;
ofenergy carriers on the whole.
engaging wide range ofinvestors,
Development oftrade in energy derivatives including the population, in investing
(futures, options and other) using the Russian in energy derivatives ofthe Russian
Federation currency
exchange trade grounds
Increase in the share ofexchange trade in
Increase in the share ofexchange trade in
energy carriers to 510% ofthe domestic
energy carriers to 1520% ofthe domestic
market volume
market volume
Phase 1
157
Phase 2
Phase 3
7. Formation ofefficient and stable tariff and pricing systems on energy markets
Enhancement ofthe system oftargeted
Creation ofthe state reserves ofoil, oil
Formulation ofa stable pricing policy
social assistance to the population in the products and natural gas for organized meeting the interests ofproducers and
context ofthe measures for cross-subsidization commodity interventions in order to consumers ofenergy resources
liquidation
stabilize the energy markets under the
Controlled liberalization ofprices for energy conditions ofcrises
carriers (including for gas and electricity)
on the domestic market while retaining state
regulation ofthe tariffs for gas and electricity
transportation.
Development ofthe regulatory and legal
framework defining the principles for the
state reservation offuel and energy resources
for organized commodity interventions in
order to stabilize the energy markets under
the conditions ofcrises. Cross-subsidization
liquidation
Completion ofliberalization ofdomestic
Completion ofliberalization ofthe
markets ofthe electricity and gas
domestic market ofheat supply
Phase 1

158
Promotion ofa rational energy balance
Phase 2
Phase 3
8. Reduction in the share ofgas in the structure ofdomestic energy consumption and increase in the share ofnon-fuel energy
in the structure ofthe fuel and energy balance
Development and introduction ofthe
Maintenance ofeffective and stable
Active development ofrenewable and
economic mechanism ofeffective interfuel interfuel competition based on the non-hydrocarbon energy as awhole based
competition for replaceable energy carriers system ofadvanced monitoring ofthe on introduction ofadvanced technologies
(gas/coal).
prices for replaceable energy carriers and use ofthe state-private partnership
State support and direct funding ofnuclear (gas/coal).
mechanisms
power generation development in the
State support ofnuclear and coal-fired
country.
power generation development
State support ofthermal coal-fired power
generation development (stimulating taxation,
accelerated
depreciation,
preferential
lending, insurance ofrisks, simplification
ofland allocation procedures, etc.).
Implementation ofthe policy ofrenewable
energy development based on the following:
creation ofthe institutional basis for
renewable energy use in the energy sector;
stimulating taxation ofpower plants and
heating sources operating on renewable
energy;
introduction ofthe system of guaranteed
connection and access to electric grids for the
power plants operating on renewable energy
Ensuring ofthe gas and coal domestic prices
Ensuring ofthe gas and coal domestic
ratio of1.82.2
prices ratio of2.52.8
Reduction in the share ofgas in the fuel and
Reduction in the share ofgas in the
Reduction in the share ofgas in the fuel
energy balance to 5152%
fuel and energy balance to 4849%
and energy balance to 4647%
Increase in the share ofnon-fuel energy in
Increase in the share ofnon-fuel energy
the fuel and energy balance to 1112%
in the fuel and energy balance to 1314%
Phase 1
159
Phase 1
Phase 2
Phase 3
9. Rationalization ofexport and domestic consumption offuel and energy resources
Alignment ofexport customs duties on
Establishment ofeffective and stable
dark and light oil products for the purpose
system for optimization ofexport and
ofraising the economic efficiency ofdomestic
domestic consumption offuel and energy
projects on deep oil processing.
resources based on acknowledgement
Ensuring ofequal profitability ofenergy
ofthe world and domestic prices, current
carriers delivery to domestic market and for
requirements ofenergy security and
export at the expense of:
geopolitical interests ofthe country
rational regulation ofcustoms duties;
economically feasible increase in the
domestic prices for energy carriers
Advanced
growth
ofdomestic
Decrease in rates ofgrowth ofthe export
consumption ofmajor fuel and energy offuel and energy resources with low added
resources (oil, gas, coal)
value (oil, natural gas, crude coal, etc.)
10. Promotion ofproduction, export and domestic consumption ofenergy carriers with high added value
Stimulation ofenhancement ofthe quality
Stimulation ofthe output and export
State
support
for
development
ofengine fuel and oil refinery depth based on ofgas-chemistry and petrochemistry ofsynthetic liquid fuel production from
the following:
products
all types ofenergy resources (natural gas,
toughening the quality standards ofengine
coal, biomass, etc.)
fuel;
differentiating the excise rates, stimulating
the production ofquality fuel;
encouraging the upgrade ofoil- and
gas-processing complexes in the Russian
Federation
Implementation ofa complex ofprogram
Increase in export offuel and energy
measures for petrochemistry and gasresources with high added value (engine
chemistry development in the Eastern Siberia
fuel, gas-chemistry, petrochemistry, coaland Far East.
chemistry products, etc.)
State support ofpilot projects for processing
and deep conversion ofcoal
Exclusion the fuel ofgrade lower than 4
Exclusion the fuel ofgrade lower than
Increase in the oil refinery depth to at
from circulation.
5 from circulation.
least 8990%
Increase in the oil refinery depth to at least
Increase in the oil refinery depth to at
7879%
least 8283%

160
The regional energy policy
Phase 2
Phase 3
12. State support ofregional and interregional energy infrastructure development

State support for construction and
State support for regional energy
Implementation ofthe regional strategic
expansion ofthe regional and interregional infrastructure development according initiatives ofthe state and business on
energy infrastructure
to the type ofregional energy the terms ofstate-private partnership
State support for modernization and development.
regarding the development ofthe Yamal
optimization ofthe operational mode ofthe
Maintenance
ofsustainable Peninsula, Arctic regions, Eastern Siberia
existing regional energy infrastructure.
functioning ofthe existing regional and and Far East
Establishment ofthe obligatory system inter-regional energy infrastructure and
ofseasonal reservation offuel for problem provision ofstate support for building
regions. Ensuring ofrequired throughput the new one
capacities
ofthe
energy
transport
infrastructure (gas pipelines, power grids)
during peak periods ofenergy consumption
Elimination ofbottlenecks in the energy
Minimization ofthe distortions in energy
supply ofregions
supply between the energy-deficient and
energy-redundant regions ofthe country
11. Improvement ofinteraction between federal and regional authorities in the energy sector
Legislative differentiation ofpowers and
Strengthening ofthe joint control over
Establishment ofsustainable interaction
responsibilities in the sphere ofenergy observance by business entities ofthe system between the federal and regional
saving, reliability and safety ofenergy supply, federal and regional legislation in the authorities in the sphere ofenergy policy
and also regulation measures in the energy energy sector
sector between the federal, regional and local
authorities
Harmonization ofthe federal programs
Coordination ofthe federal programs
Efficient
system
ofpowers
and
and strategies ofdevelopment ofindividual ofthe energy sector development and responsibilities division between federal,
industries ofthe fuel and energy complex the programs for social and economic regional, and local authorities in the
with the programs and strategies ofsocial and development ofthe regions
energy sector
economic development ofthe regions.
Optimization ofthe system offinancial
relations between the federal centre and
resource-producing regions
Phase 1
161
Phase 2
Phase 3
14. Establishment ofthe sustainable national innovative system in the energy sector
Formation ofthe basis ofthe national
Advanced development ofdomestic
Wide introduction ofdomestic energy
innovative system in the fuel and energy innovative technologies in the fuel and innovations based on the principles
complex based on the following:
energy complex based on the following: ofproject
management
ofinnovative
establishment
ofthe
technological
establishment
oftechnical
and solutions development and implementation
forecasting system in the energy sector;
implementation zones and technological with participation ofthe state and private
the state support for import ofkey complex parks;
companies
technologies and purchase ofinnovative
assistance to the development
foreign assets (technological donors) in the ofventure business in the sphere
fuel and energy complex;
ofinnovations in the energy sector
13. Stimulation ofcomprehensive development ofthe regional energy sector

Development and implementation ofthe
Establishment
ofa
sustainable
Formation ofthe regional energy systems
regional energy programs (including energy energy supply system in hard-to-reach on the basis ofeconomically efficient
saving programs).
and remote territories on the basis combination oflocal and delivered energy
Stimulation ofdevelopment ofregional ofexpanded and efficient utilization resources use, optimum functioning
small and medium businesses in the sphere oflocal energy resources
ofthe regional and interregional energy
ofenergy services.
infrastructure, reduction in the harmful
Promotion oflocal fuel and energy
environmental impact
resources use (renewable energy, local kinds
offuel, wastes, etc.) with their subsequent
involvement into the regional fuel and energy
balances.
Optimization ofregional heat supply
systems on the basis ofeconomically efficient
combination ofcentralized and decentralized
heating
Increase in the share oflocal energy
Qualitative increase in the level
Increase in the share oflocal energy
resources in the regional fuel and energy ofregional energy security
resources in regional fuel and energy
balances to 10%
balances to 20%.
Optimization ofthe territorial structure
ofregional fuel and energy resources
production and consumption
Innovative and scientific-and-technical policy in the energy sector
Phase 1

162
Phase 2
Development ofstimulating taxation
for engineering, design, and other
companies
(including
industrial
ones), which introduce the advanced
(innovative) technologies in the energy
sector
Phase 3
Increase in the shares ofRussian equipment

Increase in the share ofRussian
Increase in the share ofRussian
ofworld technological level in the total equipment ofworld technological level equipment ofworld technological level to
deliveries ofequipment for the fuel and to 30%
50%
energy complex to 20%
Phase 1
establishment ofunited system ofscientific
and design and experimental centers,
functioning on the principles ofstateprivate partnership and providing the entire
process from the development to commercial
implementation ofinnovations in the fuel and
energy complex;
state support for renewable energy use and
research works aimed at increase in economic
efficiency ofthe projects for renewable energy
use;
development and implementation ofa
complex ofprogram measures aimed at
human resources retaining and development
163
The social policy in the energy sector
Phase 2
Phase 3
15. Provision ofreliable energy supply to the countrys population at socially affordable prices
Increase in the reliability ofenergy supply
Establishment
ofefficient
and
to the population, communal housing transparent
system
ofmechanisms
and budgetary institutions based on the controlling and regulating growth
following:
ofenergy prices for the population
improvement
ofthe
regulatory
and
legal framework aimed at increase in the
responsibility ofenergy supply to the
population;
elimination ofdepartmental energy supply
to the population at the expense oflarge
industrial enterprises and organizations.
Enhancement ofthe regulation ofretail
energy prices (gas, electricity, heating) for the
population taking into account development
ofthe system oftargeted social assistance and
increasing quality ofthe system rationing the
consumption offuel and energy resources
used by the population for communal needs
Minimization ofthe energy failures and
Decreasing the share ofhouseholds
Decreasing the share ofhouseholds
cutoffs number in the communal housing
expenditures on energy (gas, electricity, expenditures on energy (gas, electricity,
Decreasing the share ofhouseholds heating) to the level not exceeding heating) to the level not exceeding
expenditures on energy (gas, electricity, 1213%
810%
heating) to the level not exceeding 15%
Phase 1

164
Phase 2
Phase 3
17. Development and enhancement ofefficiency ofthe human potential use in the energy sector
Restoration ofthe united Russian system
Establishment
ofsustainable
selfofpersonnel training for the fuel and energy
regulative system ofhuman resources
complex based on the development ofstatereproduction for the fuel and energy
private partnership in attraction and training
complex through stimulation ofpersonnel
ofyoung specialists ofthe low and medium
mobility and enhancement ofthe principles
grades.
ofhuman resources project management
Extended reproduction and attraction
in the fuel and energy complex
ofhuman resources for development ofnew
areas ofthe Eastern Siberia, Far East, Yamal
Peninsula and continental shelf ofthe Arctic
seas based on the following:
establishment ofthe system ofspecialized
regional centers for specialists training in the
fuel and energy complex;
provision ofthe entire social setting for the
personnel in the difficult natural conditions
ofthe new areas development, including
rotational method through use ofmobile
systems ofthe social infrastructure
16. Expansion ofreal interaction between the energy business and the society in solution ofthe problems ofthe energy sector
development
Promotion ofpublic energy companies
Promotion in increasing the number
Establishment ofthe centers for social
establishment through assistance in obtaining ofpublic energy companies and control ofthe public energy companies
the state guarantees and credits, investment expansion ofthe range ofactivity activity, ensuring overall accounting
insurance.
ofpublic energy companies, stimulation ofthe population interests during longInvolvement ofthe population in the ofthe increase in the volume offinancial term planning ofpublic energy companies
public companies management through investments ofthe population in the development (environment, social sphere,
pension funds and other forms ofcollective assets ofenergy companies.
etc.)
investments.
Increase in the number ofpublic
Involvement ofthe population in discussion energy companies.
oflarge energy projects in the regions,
Increase in the volume offinancial
obligatory accounting ofthe local population investments ofthe population in the
interests during their implementation
assets ofenergy companies
Phase 1
165
The foreign energy policy
Phase 2
Phase 3
Increase in the share ofpersons ofthe
age under 40 in the employed personnel to
4050%.
Increase in the share ofpersons with
higher (professional) technical education
in the employed personnel to 7080%.
Increase in the personnel mobility
18. Consideration ofRussias national interests in the context ofthe developing system ofworld energy markets operation
Development ofthe concept and program
Development
and
co-ordination
Unification and harmonization ofthe
ofthe energy markets reorganization for ofthe documents on the rules fundamental
regulatory
and
legal
reflecting fundamental factors ofthe demand ofenergy markets functioning (in the principles ofthe national legislation and
and supply and decreasing the role ofshort- format ofcorresponding international international law, regulating cooperation
term factors and speculative behavior.
organizations), the rules ofenergy on the world energy markets
Elaboration ofinitiative proposals for companies access to the infrastructure
updating the existing and formulating and activity types on the world
new international legal documents in the energy markets (both on bilateral and
energy sector, including development multilateral basis)
ofinternationally-recognized rules oftransit
and establishment ofthe mechanism for
transit risks insurance
Settlement ofthe legal status problems
Elaboration ofthe framework system
Establishment
ofeffective
system
in disputed regions, including the Arctic, oflegal regulations in the energy sector, oflegal instruments ensuring the balance
Caspian and South China Seas, etc.
aimed at increasing the stability ofthe ofinterests ofthe countries which export,
Complex monitoring ofthe international world energy markets
import and provide transit offuel and
energy cooperation.
energy resources
Overcoming ofnegative consequences
ofthe world economic crisis and decreasing
the risks on the energy markets
Phase 1
Increase in the share ofpersons ofthe age
under 40 in the employed personnel to 30%.
Increase in the share ofpersons with higher
(professional) technical education in the
employed personnel to 60%

166
Phase 2
Phase 3
20. Diversification ofexport commodities structure, increase in the volume ofexport ofproducts with high added value
Monitoring ofthe world energy markets
Promotion
ofnew
technological
State support for raising the share
and regular estimation ofprospective demand possibilities for the export structure ofenergy resources with high processing
for the Russian highly-processed energy diversification, including enhancement rate (added value) in the Russian energy
resources
ofefficiency ofthe processes ofgas export structure (reasonable customs
conversion into the engine fuel, duties, state guarantees, risks insurance,
transportation ofgas in the form etc.)
ofcompressed gas, gas hydrates, etc.
Increase in the share ofliquefied natural gas
Increase in the share ofliquefied
Increase in the share ofliquefied natural
in the total gas export to 67%.
natural gas in the total gas export to gas in the total gas export to 1415%.
Decrease in the share ofprimary energy in 1011%.
Decrease in the share ofprimary energy
the energy export to no more than 85%
Decrease in the share ofprimary in the energy export to no more than 70%
energy in the energy export to no more
than 80%
19. Diversification ofthe export energy markets

Assessment ofthe prospective directions
Rationalization ofthe geography
Participation ofRussia in the formation
ofthe energy markets diversification
ofenergy production in the Russian ofa global energy infrastructure, including
Federation taking into account the expansion ofthe infrastructure for fuel
regional export markets and expansion and energy resources delivery to the
ofRussia's participation in the regional new markets and increase in the share
energy alliances
ofthe infrastructure not linked to specific
delivery routes (the ports, supertankers,
liquefied natural gas deliveries, etc.)
Increase in the share ofthe Asia-Pacific
Increase in the share ofthe AsiaIncrease in the share ofthe Asia-Pacific
countries in the structure ofthe Russian Pacific countries in the structure ofthe countries in the structure ofthe Russian
energy export to 1617%.
Russian energy export to 2122%.
energy export to 2627%.
Increase in the volumes ofthe Russian gas
Retaining ofthe volumes ofthe
Retaining ofthe volumes ofthe Russian
export to the countries ofEurope
Russian energy export to Europe
energy export to Europe
Phase 1
167
Phase 2
Phase 3
21. Provision ofstable conditions on export markets, including guarantees ofdemand and justification ofprices for main products
ofthe Russian energy export
Development ofthe system oflongDiversification
ofthe
energy
Establishment ofeffective international
term contracts for the Russian fuel and production structure, active participation system ofexpert analysis and forecasting
energy resources delivery and restriction ofRussia in technological developments ofmajor processes on the energy markets,
ofspeculative activity on the energy markets. and exchange ofinformation about ensuring higher stability and objectivity
Increase in equity participation ofthe Russian progress
in
key
technological ofthe corresponding estimations
companies in the existing infrastructure ofthe developments
Russian energy resources transit and delivery
and construction ofan effective alternative
infrastructure
Establishment ofRussian system for
monitoring and assessment ofthe global
processes in the energy sector and critical
threats to stability on the Russian energy
export markets.
Signing ofmultilateral and bilateral
intergovernmental agreements on fuel and
energy resources transit, unification ofenergy
systems technical operation, and technical
regulation in the energy sector
Increase in the number ofenergy exchange
trade grounds; promotion ofinternational
exchange trade in oil and oil products
with settlements in the Russian Federation
currency.
Establishment
ofthe
national
price
indicators ofthe Russian oil and oil product
grades.
Establishment ofthe state oil reserve ofthe
Russian Federation
Phase 1

168
Phase 2
Phase 3
Stable and favorable conditions for the
Russian energy export
22. Enhancement ofpositions ofleading Russian energy companies abroad

Development
ofmutually
beneficial
Development and implementation
Formation ofglobal production strings
exchange ofenergy assets and other forms ofthe
programs
ofactions
co- ofenergy supply with participation
ofinternational
cooperation
with
the coordinated
with
other
external ofRussian companies and companies
countries consumers ofRussian energy economic directions for strengthening ofthe countries consumers ofRussian
resources.
the positions ofRussia in the regional energy resources.
Signing ofintergovernmental cooperation energy cooperation (the countries ofthe
Enhancement ofthe division oflabor
agreements with due account for promotion European Union, Asia-Pacific region, and efficiency ofproduction and export
ofRussian energy companies interests.
Middle East, Africa, Central and South offuel and energy resources and energy
Mastering ofthe advanced management East Asia, Latin America, China)
technologies
ofcomplex energy projects, innovative energy
technologies, including joint development
and introduction in Russia ofenvironmentally
friendly technologies and equipment
Phase 1
Lowering ofthe risks ofthe Russian energy
carriers transit and transportation to the
export markets.
Sustainable long-term demand for the
Russian energy resources on the export
markets.
Establishment ofthe system for monitoring
the rates ofdevelopment and diversification
offuel and energy resources production
169
Information, political and economic

support ofRussian energy companies
abroad
Phase 3
Stable presence ofone Russian energy
company in the top three leading world
energy companies and in the top five world
companies and two Russian companies in
the top ten according to both ratings
Achievement
ofrational
volumes
ofextraction and reproduction ofoil and gas
reserves on the continental shelf and in other
extremely difficult conditions
Large-scale participation
companies
in
foreign
implementation
ofRussian
projects
Increase in the share ofdirect foreign

investments into the overall structure investments into the overall structure investments into the overall structure
ofinvestments into the fuel and energy ofinvestments into the fuel and energy ofinvestments into the fuel and energy
complex to at least 5%
23. Provision ofefficient international cooperation in risky and complicated projects implemented in Russia (including shelf projects
under the Arctic conditions)
Formation offavorable, stable, transparent
Enhancement ofthe competitiveness
and mutually beneficial conditions for ofRussian companies in the specified
attraction
offoreign
investments
and sphere ofcomplex energy projects
competent foreign partners in the frames implementation
ofinternational cooperation
Phase 2
Pursuing offlexible policy with
transnational
corporations,
active
cooperation
ofRussian
companies
with new national corporations and
other players on the international
market (service companies, financial
companies).
Strengthening ofthe Russian nuclear
electric energy industry positions on
the global markets ofnuclear power
generation, reactor building, fabrications
offuel, production, conversion and
enrichment ofnatural uranium
Information, political and economic support
Information, political and economic
ofRussian energy companies abroad
support ofRussian energy companies
abroad
Phase 1
CONTENT
Editors.......................................................................................................... 3
I. Introduction .......................................................................................... 10
Ii. Current results ofthe energy strategy ofRussia
for the period upto2020 implementation,
objectives and goals ofthe strategy................................................. 12
Iii. Major trends and projections ofsocio-economic development
in Russia for the period upto2030................................................... 17
Iv. Prospects ofdemand for russian energy resources........................20
1. Promotion ofthe demand for fuel and energy
on the domestic market............................................................20
2. Russia on world energy markets.............................................. 21
V. State energy policy.............................................................................. 24
1. Principles ofthe state energy policy
and its implementation phases................................................ 24
2. Main strategic guidelines........................................................28
3. Subsoil use and management ofthe state subsoil fund.........36
4. Development ofdomestic energy markets...............................38
5. Promotion ofa rational fuel and energy balance................... 40
6. Regional energy policy............................................................. 41
7. Innovation and scientific-and-technical policy
in the energy sector.................................................................. 43
8. Social policy in the energy sector............................................ 53
9. Foreign energy policy............................................................... 55

170
Vi. Prospects and strategic initiatives ofthe fuel

and energy complex development................................................... 59
1. Fuel and energy balance ofRussia
for the period upto2030.......................................................... 59
2. Strategic initiatives ofthe fuel and energy complex
development.............................................................................. 59
3. Development ofthe resource base in the fuel
and energy complex................................................................. 62
4. Oil complex...............................................................................66
5. Gas industry.............................................................................. 74
6. Coal industry............................................................................ 83
7. Electric energy industry........................................................... 89
8. Nuclear fuel cycle and nuclear electric energy industry..... 102
9. Heat supply.............................................................................. 105
10. Use ofrenewable energy and local energy resources......... 110
11. Forecast ofinvestments
into the fuel and energy complex development.................... 113
Vii. Regional and interindustrial aspects
of the fuel and energy complex development..............................114
1. Regional peculiarities
of the fuel and energy complex development........................114
2. Interaction ofdevelopment
of the fuel and energy complex
and sectors ofthe industry.................................................... 123
Viii. Expected results and the strategy implementation system..... 128
1. Expected results...................................................................... 128
2. The strategy implementation system..................................... 129
Appendix 1................................................................................................ 133
Appendix 2................................................................................................ 137
Appendix 3................................................................................................ 139
Appendix 4................................................................................................ 144
Appendix 5................................................................................................ 153
171
Ministry ofEnergy ofthe Russian Federation
ENERGY STRATEGY ofRUSSIA

FOR THE PERIOD UP TO 2030
Editor G. Safronova
Layout, makeup: P. Kolokolnikov
Size 60x84/16 Poster paper
Offset printing
Sheets 11,5
Approved for printing: 12.04.2010
Circulation: 500
Printed in "PAC Energiya"

172

ENERGY STRATEGY of RUSSIA

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ENERGY STRATEGY of RUSSIA

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06.71.

Ministry ofEnergy ofthe Russian Federation

ENERGY STRATEGY ofRUSSIA

(622.323+622.324+622.33+621.311) 2030 (470)

Institute ofEnergy Strategy, 2010

founded. They were composed ofleading Russian scientists and specialists.

A.N.Dmitrievsky, director ofthe Institute ofOil and Gas Problems

2008. The procedure ofapproval ofthe project with interested federal

course ofits development on the basis oftarget guidelines, rather than

ENERGY STRATEGY OF RUSSIA for the period up to 2030

GOVERNMENT ofTHE RUSSIAN FEDERATION

Prime Minister ofthe Russian Federation

ENERGY STRATEGY OF RUSSIA for the period up to 2030

Energy strategy ofRussia

ENERGY STRATEGY OF RUSSIA for the period up to 2030

on an analysis ofthe current trends and the new system challenges to

ENERGY STRATEGY OF RUSSIA for the period up to 2030

II. Current results ofthe Energy

ofthe energy sector into improvement offoreign economic activities

modernization and construction ofa new energy infrastructure

ENERGY STRATEGY OF RUSSIA for the period up to 2030

III. Major trends and projections

ENERGY STRATEGY OF RUSSIA for the period up to 2030

When forecasting the basic predictions in the Strategy (hereinafter

priority development ofinnovative low-energy intensive sectors and

ENERGY STRATEGY OF RUSSIA for the period up to 2030

IV. Prospects ofdemand for Russian

2. Russia on world energy markets

global energy security are increasingly understood and supported in

ENERGY STRATEGY OF RUSSIA for the period up to 2030

V. State energy policy

introducing asystem ofadvanced technical regulations,

Basic production assets and infrastructure ofthe energy sector will

2. Main strategic guidelines

sole dependence ofthe Russian economy and its energy sector

transportation ofenergy resources between different regions

energy audits establishing energy passports for organizations

improving the amortization policy by providing an accelerated

promoting technological modernization, innovative development

Developing asystem ofprospective regulations, standards and

3. Subsoil use and management

the geography ofhydrocarbon production in Russia is changing by

increase in reliability offuel and energy reserves accounting and

4. Development ofdomestic energy markets

disparities ofdomestic energy prices for main energy resources;

5. Promotion ofa rational fuel and energy balance

promotion ofproduction, export and domestic consumption

6. Regional energy policy

energy connections between the regions were strengthened by

realization, energy reliability and safety provision, regulation

7. Innovation and scientific-and-technical policy

During the implementation ofthe Energy Strategy ofRussia for the

experimental-industrial production ofpower plants on fuel

rapid development ofrenewable energy and improvement ofthe

provision ofscientific and technological support to improve the

radical technical renewal ofcoal production (including equipping

designing electrical conductors on the basis ofnew composite

Nuclear Fuel Cycle and Nuclear Energy Industry:

developing interconnected complex oftechnological subsystems in

provision offundamental science funding in energy field, aimed

8. Social policy in the energy sector

general decrease in the human potential level in the fuel and

improving and implementing principles ofproject management

9. Foreign energy policy