Industry‑related trends

Global trends in the power engineering sectorLong-term energy consumption forecast until 2050 (IEA).

Decarbonisation, decentralisation and digital transformation (digitalisation) are the three D trends driving the worldwide electric power industry in the era of Energy Transition 4.0.

Up to 2050, fossil fuels will continue to be the primary energy source in use worldwide. However, taking into account the decarbonisation factor, the share of oil, petroleum products and coal in total energy consumption will decrease, while natural gas and primary electricity consumption will grow by 2035. The share of electric power in final energy consumption will continue to grow, reaching 31% by 2035 and 42% by 2050.

Coal‑fired electricity generation is expected to increase annually by about 4% on average until 2026Electricity 2024. Analysis and Forecast to 2026. International Energy Agency, iea.org.. The primary driver of change in the global perspective will be the growing use of renewable energy sources in China, the country that produces over half of the world’s coal‑fired generation.

As the digital economy grows, a significant volume of digital data is produced, necessitating respective processing and storage power. The expansion of the cryptocurrency industry will be another factor driving the need for computing power.

Both the active growth of distributed generation (including the greater deployment of RES) and the usage of energy storage systems (including hydrogen technologies) reflect the trends towards decentralisation and decarbonisation of the global electric energy system. The long‑term trajectory of sustainable growth will not change in spite of the current energy crisis.

The growth of electricity consumption causes an increase in the grid load and the expansion of electricity use in industry, heating and air conditioning, transport, telecommunications, data processing and storage. Therefore, one of the most important elements influencing the growth of energy consumption is the development of electric transportation.


Alexey Molsky
— Russia has recently launched a number of significant projects pertaining to the advancement of green energy. How does this affect the Company’s operations?

— In 2023, the Rosseti Group provided grid connections to eight RES generation facilities with a total capacity of over 336 MW. These include the Kola WPP, which is the world’s largest polar wind power plant, and facilities in the Stavropol and Krasnodar Territories and Karachay‑Cherkessia. In addition, the Group’s grid companies support the development of green energy by purchasing energy to compensate part of losses from RES generation on the retail market at a cost higher than wholesale market prices.

The power grid complex is fully prepared to ensure the supply of RES capacity. However, we believe that the development of such generation should also take into account the interests and opportunities of other market participants. It may be expedient to create large RES facilities, the capacity of which will be transmitted via main transmission grids over long distances to cover the demand in the UES of Russia.

RES may also be effective in organising power supply to remote areas, including as part of autonomous hybrid power plants (AHPP). Such projects already exist in Siberia and the Far East. In addition, Rosseti, together with equipment manufacturers, is actively involved in the development of micro‑generation by providing turnkey services for the installation of small‑capacity RES generation systems.

Alexey Molsky, Deputy General Director for Investments and Capital Construction

Russian electric power market

Electricity consumption in the Unified Energy System (UES) of Russia in 2023 increased by 1.4% to 1,121.6 billion kWh.Report on the functioning of the UES in Russia in 2023 (based on operational data), SO UPS.

In accordance with the Scheme and Programme of Development of Electric Power Systems of Russia for 2024–2029, the electricity consumption in the UES of Russia is projected to increase by 2029 to 1,274.5 billion kWh, with increase in the maximum capacity consumption to 183,351 MWOrder of the Minenergo of Russia No. 1095 dated 30 November 2023.. Given the anticipated expansion in energy and capacity consumption, the implementation of the planned actions on the development of generating capacities and power grids will ensure the reliable operation of electric power systems.

The Russian economy has undergone structural adjustments and transformation as a result of recent global events. The overall energy consumption in Russia will depend on the behaviour of key sectors of the economy and other significant factors.

Transition from coal and wood heating to electric heating is considered by the state as one of the environmental improvement measures for regions with unfavourable environmental situation under the federal project called Clean Air.


Variation of electricity demand in the UES of Russia, bln kWh

Source: operational data of JSC SO UPS.
Nature
Possible drivers of growth in electricity demand by sector
Sector Demand will grow due to upgrade of ferrous metallurgy capacities.
Agriculture Consumption will increase due to the growth in the number of illuminated and heated greenhouses in the vegetable growing sector, driven by the implementation of the Food Security Doctrine and increased exports of agricultural products.
Construction The implementation of national projects and government programmes aimed at increasing the housing and the number of roads in Russia will lead to an increase in the production of energy‑intensive building materials (including cement).
Trade The most significant contribution to the growth of energy consumption in the trade sector will come from the development of e‑commerce and the associated logistics and advertising infrastructure. Increased demand for data processing, storage and transmission will lead to an increase in the volume of data centre infrastructure commissioned.
Transport Expansion of the electric vehicle and electric bus fleet will require the creation of a developed charging infrastructure and will increase the demand for electr power from electric transport.