Integration of global energy systems discussed at Russian Grids round table at SPIEF 2014

Integration of global energy systems discussed at Russian Grids round table at SPIEF 2014 23.05.2014

Key aspects of the integration of global energy systems were discussed at a round table organized by Russian Grids at the St. Petersburg International Economic Forum on Friday 23 May, 2014. Are there alternatives to the integration processes in the energy sector? Can power companies handle them on their own? Is governmental support adequate to ensure both stability and development of infrastructure? Those are the questions the round table participants tried to answer.

Andrei Sharonov, dean of the Skolkovo Moscow School of Management, opened the session by noting that according to many leading economists and energy experts, two mutually exclusive trends were simultaneously in play now: globalization of markets and also decentralization of control over energy systems and their maximum commitment to the consumer.

"The pressure on infrastructure monopolies is increasing, especially on the demand side. New risks have arisen because of significant deterioration of infrastructure on the one hand and a massive surge of technology on the other. Also, growth rate slackens from time to time, requiring an integrated approach to electrical infrastructure strategy," said Sharonov.

Budargin said in his speech that nowadays, all power systems fulfilled three basic functions: modernizing, creating smart grids and ensuring a balance between supply and demand. "It is a very expensive solution, and we can not rely solely on rates, which puts everything on the shoulders of the consumer. Integration processes can give you just the effect you're looking for," he said.

In Budargin's opinion, smart-grid projects may be the only way to achieve integrative development. He noted that a successful introduction of smart grids depends on the dimensions of the area in which they are used. "We ran into this problem in the regions. You cannot build smart grids into closed energy systems. The more room you have to work with, the more success you will have. Thus, integration is the only realizable path to a competitive environment for separate energy systems," said the head of Russian Grtids.

Dr. Christoph Frei, the secretary general of the World Energy Council, directed the attention to the necessity of having integration processes in every region. Integration processes are very time-consuming, so during the interim, everyone needs to come to a shared understanding of how to resolve matters of energy security, energy access and the environment. "All three aspects must be considered simultaneously. Before shifting to global processes, each country has to devise its own policies in these areas,” Frei said.

Rosatom's general director, Sergey Kiriyenko, said integration provides a high degree of assurance and confidence when energy projects are undertaken. As an example, he cited international nuclear projects planned for the next 100 years. Because of the long duration of those projects, he said, the people involved are forced to take the path of integration. "Integration takes relationships between countries to a new level. Regardless of the political situation, obligations are always fulfilled," said Kiriyenko. He agreed with other round table panelists that in this day and age, there is no choice but to integrate.

As Deputy Energy Minister Vyacheslav Kravchenko pointed out, Russia has already set off on a path of integrating processes, particularly the collaboration it has begun in the Asia-Pacific region. That way, he said, even if a definitive technological disintegration occurs, the processes of integration can happen at other levels. "Energy can be decoupled from spillovers, and integration can occur at the ideological level, at the level of market models, for instance. Europe is now studying the Russian model and talking about implementing the market for power," said Kravchenko.

Jorgen Kildal, an E.On BoD member who oversees the company's Russian line, and ERDF chief executive Philip Monloubou also stressed integration in their speeches. In Monloubou's opinion, when speaking of integration processes, we should not forget about the end user. "Integration should meet the everyday consumer expectations, which increase day by day. In their interests, we have to ensure energy quality, reliability and security," he said.

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