Global energy challenges and the national economy: stress scenarios for Russia

Abstract

Purpose This paper aims to study the ongoing and emerging technological changes in the global energy sector from the frequently neglected perspective of their potential destructive impact on the Russian economy. Design/methodology/approach Having reviewed existing global energy forecasts made by reputable multilateral and national government agencies, major energy corporations and specialised consulting firms, the authors noticed that most of them are by and large based on the extrapolation of conventional long-term trends depicting gradual growth of fossil fuels’ demand and catching-up supply. Unlike this approach, the paper focuses on the possible cases when conventional trends are broken, supply–demand imbalances become huge and the situation in the global energy markets is rapidly and dramatically changing with severe consequences for the Russian economy, seriously dependent on fossil fuels exports. Revealing these stress scenarios and major drivers leading to their realisation are in the focus of the research. Based on the Social, Technological, Economic, Environmental, Political, Values (analytical framework) (STEEPV) approach, the authors start from analysing various combinations of factors capable to launch stress scenarios for the Russian economy. Formulating concrete stress scenarios and assessing their negative impact on the Russian economy constitute the next step of the analysis. In conclusion, the paper underlines the urgency to integrate stress analysis related to global energy trends into the Russian national systems of technology foresight and strategic planning, which are now in the early stages of development. Findings The analysis of global energy market trends and various combinations of related economic, political, technological and ecological factors allowed to formulate four stress scenarios particularly painful for the Russian economy. They include the currently developing scenario “Collapse of oil prices”, and three potential ones: “Gas abundance”, “Radical de-carbonisation” and “Hydrogen economy”. One of the most important conclusions of the paper is that technology-related drivers are playing the leading role in stress scenario realisation, but it is usually a specific combination of other drivers (interlacing with technology-related factors) that could trigger the launch a particular scenario. Research limitations/implications This study’s approach is based on the assumption that Russia’s dependence on hydrocarbons exports as one of the main structural characteristics of the Russian economy will remain intact. However, for the long-term perspective, this assumption might not hold true. So, new research will be needed to review the stress scenarios within the context of radical diversification of the Russian economy. Practical implications This paper suggests a number of practical steps aimed at introducing stress analysis as one of the key functions within the energy-related sectoral components of the Russian national systems of technology forecasting and strategic planning. Originality/value The novelty of this paper is determined both by the subject of the analysis and approach taken to reveal it. In contrast to most of research in this area, the main focus has been moved from the opportunities and potential benefits of contemporary technology-related global energy shifts to their possible negative impact on the national economy. Another important original feature of the approach is that existing global energy forecasts are used only as a background for core analysis centred around the cases when conventional energy trends are broken.

Driving Innovation through Energy Efficiency: A Russian Regional Analysis

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“…In the end, resource-dependent countries implement a fairly typical economic policy of pumping the economy with money in the short term, hoping to make an economic breakthrough [14]. As a rule, they tend to restrain significant currency inflows during periods of high global market conditions, so as not to provoke inflationary surges (for example, Russia in 2002-2008).…”

The Future of the Italian Electricity Generation Sector. An Analysis of the Possible Strategic Models

“…release various scenarios for the energy sector. It can be said that often these international forecasts could be defined as largely conventional in the sense that they are based upon the assumption that the current or emerging socioeconomic and science and technology trends are going to remain relevant in the long term [Kuzminov et al, 2017]. Furthermore, the scenarios published by outstanding international organizations, even though they are independent, are often under the political influence of different interest groups.…”

“…Furthermore, the scenarios published by outstanding international organizations, even though they are independent, are often under the political influence of different interest groups. On the other hand, taking into account all the limitations, these scenarios are based upon the most comprehensive energy databases and up-to-date information, thus they can be taken as a reliable foundation upon which to develop further studies [Kuzminov et al, 2017]. In the present paper, the scenarios provided by the European Network of Electricity Transmission System Operators (ENTSO-E) are considered.…”