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The Siberian Curse:
A Blessing in Disguise
for Renewable Energy?
INDRA OVERLAND
Abstract: This article examines the prospects for the development
of renewable energy in Russia, concentrating on remote northern
settlements as a possible market niche. The article discusses con-
ducive factors and obstacles to the development of renewable en-
ergy in Russia as a whole. It starts by noting many factors conducive
to renewable energy in Russia and then goes on to identify some
major obstacles that nonetheless make it difficult to develop renew-
able energy in the country. The author further examines how these
obstacles might be overcome and an initial foothold be established
by replacing the northern freight system (severnyi zavoz) with locally
produced renewable energy. The article draws on interviews with
Russian scholars, government officials, and business people related
to energy and/or the north, as well as written materials on severnyi
zavoz and renewable energy in Russia.
Keywords: climate change, energy, northern freight, renewable en-
ergy, Russian North
Introduction
In their widely read book, The Siberian Curse: How Communist Planners
Left Russia Out in the Cold, Fiona Hill and Clifford Gaddy argue that So-
viet planners under-priced both energy and labor, leading to policies to
populate and modernize remote parts of the country that were irra-
tional and wasteful.1As a result of these policies, according to Hill and
Gaddy, post-Soviet Russia inherited a demographic pattern of isolated,
Sibirica, Vol. 9, No. 2, Summer 2010: 1–20 © Berghahn Journals
doi:10.3167/sib.2010.090201
ARTICLES
remote towns and settlements that will burden the country for decades
or even centuries.
This article takes a different tack, asking whether the remote settle-
ments in Siberia and other peripheral parts of the country could in fact
prove to be not so much a curse as fertile ground for expanding the use
of renewable energy in Russia. It does not aim to overturn Hill and
Gaddy’s thesis, but rather to complement it by showing that remote
settlements may also have an advantage in one specific area: renew-
able energy. Central to this argument is the northern freight system
[severnyi zavoz] of subsidized goods and transport for Russia’s Arctic,
sub-Arctic and other remote regions with harsh climatic conditions.2
The argument in this article has important implications for climate
policy. Russia has been a reluctant, albeit cooperative, partner in the in-
ternational climate regime, but Russia’s role in activating the Kyoto
Pro-tocol in 2003 was decisive, paradoxically, given the low priority of
climate issues on the Russian policy agenda.3It was Russia’s ratifica-
tion that triggered the activation of the protocol, since the Soviet Union
accounted for a disproportionately large part of 1990 carbon emissions
and parties accounting for 55 percent of 1990 carbon emissions needed
to ratify the protocol for it to enter into force. Major scientists and
politicians in the country, including then President Vladimir Putin,
continued to publicly deny the role of human emissions in climate
change. The Russian debate on climate politics has instead emphasized
the potential for wealth redistribution that lies in the Kyoto mecha-
nisms (for example, through technology transfers), and the Russian ne-
gotiators in the ratification process stressed side-benefits like potential
WTO (World Trade Organization) accession.4As one interviewee for
this article said about Russian decision-makers: “They don’t believe in
climate change. They only believe in dollars they can get hold of right
now.”
As a consequence of the denial of the anthropogenic contribution
to climate change, Russia lags behind other countries, including many
developing countries, in creating the necessary framework to facilitate
the development of renewable energy. Recently President Dmitry
Medvedev has signaled that he takes climate change more seriously,
but even if these signals were to be followed up with substantial ac-
tion, it would take many years to build the necessary framework for
the large-scale development of renewable energy. This article argues
that the replacement of the northern freight system with energy from
renewable sources in remote northern settlements may provide a cru-
cial stepping stone for renewable energy in Russia in the meantime.
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Before discussing the northern settlements and the practice of sev-
ernyi zavoz in the second half of the article, I examine the prospects for
the expansion of renewable energy in Russia as a whole in the first
part. This article draws on 42 interviews, most with Russian actors.
The interviews were carried out by the author with the help of two col-
leagues, and the interviewees were guaranteed that no information or
statements would be attributed to them personally.
Russia’s Renewable Energy Potential
Why pay attention to renewable energy in Russia – a country so richly
endowed with fossil fuels? After all, it holds the world’s largest re-
serves of natural gas, the second largest coal reserves, and the eighth
largest oil reserves. Moreover Russia is the world’s largest exporter of
natural gas, the second largest oil exporter, one of the main nuclear
powers, and the world’s largest overall energy exporter.5Russia’s posi-
tion as an energy superpower is based on its natural abundance of fos-
sil and nuclear fuels – not utopian renewable energy.
This section discusses several factors that nonetheless make Russia
a potentially interesting market for renewable energy. With 142 million
inhabitants, Russia is the world’s eighth-largest country in terms of
population. At a basic level, that in itself bodes well for its potential as
a market for anything, including renewable energy. The economy and
the purchasing power of the population have been growing fast since
1998, and despite a setback during the 2008–2009 financial crisis, Rus -
sian purchasing power is still relatively strong and growing. Since Rus-
sia is a northern country with a cold climate and an energy-intensive
industrial sector, per capita energy consumption will inevitably be
higher than in most other countries, even if today’s high levels of inef-
ficiency were to be reduced.
Russia is by far the world’s largest country in terms of surface area,
covering a total of 17 million km2and 11 time zones, which makes it
difficult to bring together the entire territory under unified electricity
and natural gas grids. An estimated ten million people are not con-
nected to the central grids.6Over 20 million Russian families have
country cottages (dachas).7Many of these are located on the outskirts of
major towns, with ready access to electricity and/or natural gas. How-
ever, many others are more remote and are not connected to the central
grids. In addition, an estimated five million farms are effectively off
line.8Together, this ‘archipelago’ of isolated energy consumers is a po-
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 3
tentially promising market for renewable energy. Similarly remote vil-
lages in India have benefited greatly from alternative energy installa-
tions built by organizations such as the World Bank. In Iraq, the U.S.
military often found it cheaper to use solar panels to power its remote
outposts than to transport traditional fuels over great distances in the
desert. In some cases it may be easier for dacha owners and farmers to
become self-sufficient in energy than to connect to electricity or gas
grids that are far away or are mired in a cumbersome bureaucracy.
Russia’s extensive resource base of fossil fuels and fissile materials
does make it a strong actor in these areas, but the country has an
equally good base of natural resources for renewable energy. It has the
advantage of vast geographic size and variation in climate and terrain,
giving it the potential to develop virtually any kind of renewable en-
ergy. There are large rivers with untapped hydropower potential, large
amounts of sunshine and biomass, and areas with strong winds and
easily available geothermal energy.9Prices for these renewable energy
input factors should therefore be lower than in countries where they
are far scarcer, such as Germany, Japan, or China, all of which are try-
ing hard to develop renewable energy.
Estimates of the potential for renewable energy vary according to
the method of calculation. Russia’s Federal Law on Energy Saving10 de-
fines renewable energy sources as “solar energy, wind, geothermal en-
ergy, natural water movement, and natural heat production” – thereby
excluding traditional large-scale hydroelectricity.11 Estimates of “avail-
able resources” can tell us the energetic equivalent of the total amount
of renewable energy available for extraction. Taking into account the
technological limitations as well as the social and ecological factors
yields what is referred to as the technical potential. What is really deci-
sive – the economic potential – is that part of the technical potential
which is economically justified when one takes into account the costs
of fossil fuels, heat and electricity, equipment, materials, transporta-
tion, and wages.12 This means that the economic potential of renewable
energy sources will increase with the rise in fossil fuel prices.13
It is, however, difficult to ascertain the exact potential of the vari-
ous resources, and estimates diverge. The Energy Charter Protocol on
Energy Efficiency and Related Environmental Aspects (PEEREA) from
2007 provides one set of estimates, as shown in Table 1.
An International Energy Agency survey from 2003 found that wind
energy can be exploited in many parts of Russia – including Arkhan -
gel’sk, Astrakhan, Volgograd, Kaliningrad, Magadan, Novosibirsk,
Perm, Rostov, Tiumen, Krasnodar, Khabarovsk, Primorsk, Dagestan,
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The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 5
Kalmykiia, and Kareliia. According to the same source, the country’s
solar energy potential is greatest and can be best exploited in the
southwest (the North Caucasus, the Black Sea, and Caspian Sea re-
gions) as well as in Southern Siberia and the Far East. The IEA survey
found geothermal resources viable for production in several places,
notably on the Kamchatka Peninsula and Kuril Islands, but also in the
North Caucasus as well as certain locations in Central Russia, Western
Siberia, Lake Baikal, Krasnoiarsk Krai, Chukotka, and Sakhalin.14 In
addition, Russia is the world’s largest producer of biomass, which
means that it also has a tremendous potential for bio-energy.15
Contrasting Russia’s potential for renewable energy with its in-
stalled capacity reveals considerable scope for expansion. Pavel
Bezrukikh, Russia’s doyen of renewable energy studies, has made an-
other widely quoted estimate of the renewable energy potential in the
country.16 He found that the economic potential for development of re-
newable energy sources in Russia could cover 35 percent of the coun-
try’s total primary energy supply. When we compare this with the
current situation, where renewable energy sources account for less
than one percent of Russia’s energy, two points stand out: even if
Bezrukikh and PEEREA’s figures are optimistic, renewable energy
sources are underdeveloped but these energy sources can contribute
tremendously to the energy balance, export potential, emissions trade
potential, and economic development of the Russian Federation. Table
2 shows how little renewable energy capacity has been built in Russia,
apart from large hydro-electric dams.17
Table 1. Russia’s renewable energy potential (Mtoe/year)
Energy source Technical Economic
Small hydro 88 49
Wind 1400 8
Solar 1610 2
Biomass 37 5
Geothermal – 80
Low-grade heat 136 37
Total 3271 181
Source: PEEREA estimates, cited in European Council, The Energy Charter Protocol on
Energy Efficiency and Related Environmental Aspects: Regular review of Energy Effi-
ciency Policies. (Brussels: European Council, 2007).
In addition to its large size and rich resources, there are several
other reasons why Russia might be interested in renewable energy in
the future. For one thing, Russia has much to gain from reducing its
subsidies for natural gas and electricity. Above all, decreased domestic
consumption as a result of higher prices could free up resources for ex-
ports. Almost 67 percent of Russian exports are energy-related.18 The
Russian state and its wholly and partially owned companies consis-
tently try to maintain high exports, in particular natural gas to the EU
market. According to Alexander Medvedev, the head of Gazprom Ex-
port, the aim is to increase natural gas exports to Western Europe to
from 191 billion cubic meters (bcm) in 2007 to 250 bcm by 2020.19 The
Russian Energy Strategy for the Period until 2030, published in November
2009, sets further ambitious targets for energy exports by 2030: natural
gas exports are to increase to at least 349 bcm and oil from around 200
tons in 2007 to 329 million tons in 2030.20 The government and major
companies therefore have an incentive to reduce subsidies and create
more equitable conditions for renewable energy to compete with tradi-
tional sources of energy. That way they can free up more resources to
export to energy-hungry West Europeans.
In addition, Russia has recently lost control over Turkmenistan’s
exports. These passed through Russia until 2009, but are now increas-
ingly being redirected eastward after the first stage of the Turkmenistan-
China gas pipeline was completed in late 2009. This further reinforces
the need to secure enough gas for exports, and expanding renewable
energy may be one way of doing so.
Renewable energy has emerged as a primary tool in the global
strategic race toward a low-carbon economy. China, the EU, Japan, and
the USA are currently vying for the lead. Countries that are successful
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Table 2. Installed renewable energy capacity (MW)
Geothermal energy 73
Small hydro 1,000
Large hydro 46,000
Biomass 1,270
Wind 14
Tidal 0.4
Source: Douraeva, Elena. 2003. Renewables in Russia: From Opportunity to Real-
ity. Paris: IEA. The registered tidal power plant is not currently operative.
in this race will gain economically while also making a contribution to
climate policy that may raise their international political standing and
reduce their dependency on imported energy. Although many central
Russian actors do not accept the tenets about anthropogenic climate
change, Russia may become interested in both the profits and interna-
tional status that are at stake.
Russia’s long tradition of high-quality research in the natural and
technological sciences gives it another advantage with regard to the
development of renewable energy. The country also has an impressive
track record of scientific research specifically on renewable energy
technologies. In the early 1930s, the USSR constructed the first utility-
scale wind turbines in the world. The first Russian atlas of wind energy
resources was published already in 1935. Over 7,000 small-scale hydro -
power stations were built in the late 1940s. Research on photovoltaic
cells was advanced as a result of the space programs, and the first
solar-powered satellite, Sputnik 3, went into orbit in 1958. The 5 MW
Pauzhetskaia geothermal power station was completed in 1967, and a
450 kW tide power station was built in 1968.21 Unfortunately, this tra-
dition suffered in the late 1960s and 1970s, when Soviet central plan-
ners, like their counterparts in the West, came to favor nuclear energy
and fossil fuels. Since then, there has been limited investment or inter-
est in renewable energy in Russia, but several educational and research
institutions and a few small-scale manufacturers of hydroelectric and
windmill parts continue to exist. One area that has survived relatively
well is the photovoltaic sector.22 Under the right conditions these insti-
tutions and companies could be easily reinvigorated and expanded.
Russia may also profit from meeting its international treaty obliga-
tions. The Kyoto Protocol entered into force in 2005. In 2008, the global
emissions trading system became effective. The first period of the pro-
tocol runs until 2012, and the second period will be negotiated during
the coming years, a process that was kicked off with the Copenhagen
climate conference in December 2009. Russia ratified the Kyoto Proto-
col in 2003.
So far, Russia has not had any problems in achieving its Kyoto tar-
get level. The target level of greenhouse gas emissions set for Russia in
the first period of the Kyoto Protocol from 2008 to 2012 is the equiva-
lent of its 1990 emissions. Greenhouse gas emissions were at the high-
est level in Soviet history in 1990, which made this year a logical choice
as Russia’s target level.23 By 1995, emission levels of greenhouse gases
had fallen by approximately 40 percent.24 However, this reduction was
not a result of structural changes or technological improvements in the
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 7
industry that led to actual reduction in emissions from ongoing pro-
duction: it was more the result of factories being shut down due to the
collapse of the Soviet economy in 1991.
After the 1998 financial crash and devaluation of the ruble there
was a rapid economic recovery, and in 2007 GDP reached the 1990 level
(in absolute terms). Although greenhouse gas emissions have not quite
kept pace with the economic rebound after 1998, they too have been
rising fast. Russia is therefore going to have to struggle harder to fulfill
its obligations under the Kyoto Protocol during the coming years. In
addition it is likely to get drawn into a stricter agreement.
The positions of the USA and China, two former non-participants
in the international climate regime, will determine the outcome of the
Copenhagen process to negotiate a follow-up of the Kyoto Protocol. If
one of these countries refuses to join, it is likely that the other will also
opt out. The absence of these two countries would undermine the im-
portance of an agreement and remove much of the pressure on Russia
to join. On the other hand, if China and the USA do reach an under-
standing and underpin the future climate agreement, it will be difficult
for other countries to stay outside such an arrangement. The election of
Barack Obama and China’s impressive investments in renewable en-
ergy both point in this direction, even if the negotiations are likely to
be volatile and protracted. If this assumption is correct, there will be in-
creased pressure on Russia to join other great powers and smaller
countries in the follow-up to Kyoto. This in turn will result in a greater
need to reduce greenhouse gas emissions and to increase the produc-
tion of clean energy.
Obstacles to Renewable Energy in Russia
Counterbalancing the factors noted above that bode well for the future
of renewable energy in Russia, there also are significant limitations on
the emergence of markets for renewable energy in the country. First,
subsidies for natural gas and electricity put renewable energy at a big
disadvantage. Removing these subsidies is difficult: the population has
become accustomed to getting such commodities at low prices since
the Soviet period. Moreover, the people also experienced great hard-
ship in the post-Soviet period and are wary of having their welfare fur-
ther reduced. When the government tried to replace some social
benefits (l’goty) with cash payments in 2005, there was large-scale so-
cial discontent, which forced the government to backtrack on some of
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the measures.25 Attempts to reduce subsidies for natural gas and elec-
tricity might have similar consequences, and it is clear that the Russian
government and the elite do not want to risk becoming unpopular
with large segments of the population if they can avoid it.26
Second, it is difficult to find capital to finance the installation of al-
ternative energy generators in Russia. Securing such capital presents
problems even for many potential users of such technology in well-off
Western countries. In Russia’s current economic conditions, with a
shrinking economy and a struggling banking sector, it will be espe-
cially hard.
Third, there are problems with the reliability of the data that un-
derpin the market picture described above. It proved impossible for
me to verify or find updated data on some of the points above (num-
ber of dachas and farms not connected to central grids, etc.). Statistics
Russia (formerly Goskomstat) has become more closed than it was
only a few years ago, perhaps due to a combination of greater commer-
cialization and increasing suspicion about security threats. Before it
was reformed and unbundled, Russian Joint Stock Company Unified
Energy System (RAO-UES) had data on those who were connected to its
grids, but lacked data on those not connected. It is therefore difficult to
comment on the number of dachas and farms that are not connected to
the central grids for electricity and natural gas. Some interviewees
claimed that most dachas are already connected to the grids; others dis-
agreed with this view, but no reliable data exist. This lack of data is an
obstacle to the development of renewable energy markets, since in-
vestors and innovators are forced to operate in uncharted territory.
These obstacles to the development of renewable energy in Russia
indicate why the efforts of Western actors to cooperate with their Rus -
sian counterparts in this field have largely been fruitless. Even small
joint projects have taken many years to realize, and many have stalled
during the planning or implementation phases. Many interviewees
echoed such experience. There may be two main reasons for this lack
of success. First, among the main drivers for renewable energy interna-
tionally are concerns over anthropogenic climate change, a perspective
that until recently has been rejected by many prominent Russian scien-
tists and politicians.27 As a result it is difficult to find a common lan-
guage. Second, Western actors have tended to focus on setting up
electricity generation capacity for the Russian market, for example by
setting up new windmills imported from abroad, and it has proven dif-
ficult to connect these new sources of electricity to local and regional
grids.28
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 9
Western actors have thus met the obstacles to renewable energy
head-on and failed to take advantage of the positive factors. The ques-
tion both for Russians and Westerners interested in promoting renew-
able energy in Russia is how and where to get a better start. The second
part of this article argues that settlements in the remote northern parts
of Russia may be a niche market and launching pad for renewable en-
ergy. This is also related to the point above about the millions of dachas
and farms that are not connected to central grids.
Low-hanging Fruit: Northern Freight
Northern areas with harsh climatic conditions make up around 60 per-
cent of the territory of the Russian Federation. Population density is
low, less than one person per square kilometer, making it prohibitively
expensive to connect most of these areas to the central grids. Over
6,600 diesel-powered plants with a total capacity of 3.3 GW are in use
in these parts of the country, and they require around two million tons
of diesel annually.29
Northern freight is a system of subsidized goods and transport for
Russia’s Arctic, sub-Arctic, and other remote locations with harsh cli-
matic conditions. Most of the goods transported are foodstuffs and
fuels for heating, electricity generation, and transportation. The system
was established during the first decades of the Soviet period in order
to help populate Russia’s vast Arctic and sub-Arctic expanses, a major
objective for Stalin and, later on, Khrushchev. Northern freight was
one of the three pillars of the Soviet demographic push into the Arctic
– the other two pillars being forced migration to the gulag camps and
special socio-economic benefits like higher wages, longer holidays,
and earlier retirement for those who voluntarily went to live and work
in the northern parts of the country.
Since the collapse of the Soviet Union, the northern freight system
has been maintained as a matter of tradition and in order to avoid the
socio-economic and political destabilization of settlements in the North.
In connection with the financial and monetary crash in 1998 there was
some discussion of scrapping the northern freight system and abandon-
ing many of the remote settlements, but in practice it has continued.30
The centerpiece of the northern freight system is its long-distance
transport of fossil fuels, mainly diesel and coal, to remote settlements.
Most spectacular is the transport of diesel, variously carried out by
river tanker, biplane, helicopter, or tracked vehicle to isolated settle-
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10 Sibirica
ments. Needless to say, this is a costly endeavor. Rental of the Mi-8 or
larger helicopters needed for bulk freight costs at least $1,500 (US) per
hour. In some cases, ships carrying coal or diesel are accompanied by
nuclear icebreakers, at a cost of 600,000 rubles per day, not counting the
subsidies for nuclear fuel.31 In some parts of the Russian Federation,
such as Altai and Tuva, wedged between Kazakhstan and Mongolia,
and Kamchatka in the Far East, over half the regional budget is spent
on fuel included in the northern freight system.32 It has been estimated
that in the Soviet period, 3.5 percent of GDP was spent on various
northern benefits, including northern freight.33 Information is not avail-
able concerning the total cost of Russia’s northern subsidies today and
no interviewees had such knowledge, but in current GDP terms 3.5
percent would correspond to $34.6 (US) billion.34
Investing some of this money in alternative energy applications
would make economic sense. The resources currently devoted to sup-
plying the remote northern villages are staggering. In 2007, the last
year for which data are publicly available, the entire northern freight
included 17.3 million tons of different products, an increase of 2.3 per-
cent from 2006. Out of this, petroleum products made up 2.7 million
tons and coal 1.6 million tons.35 As an example of what the northern
freight of carbon-based fuels involves for one region, we can take the
sparsely populated Yamal Peninsula in northwest Siberia, with a pop-
ulation of 16,000.36 In 2007, this population alone received 200,000 tons
of petroleum products; 20,500 tons of coal; and 40,000 m3of firewood.37
Recent studies have shown that alternative sources of energy are a
viable solution for Russia’s northern settlements. According to Dou -
raeva, combined wind/diesel installations can reduce fuel needs in re-
mote locations by up to 80 percent.38 According to Kreutzmann, both
wind and solar installations could replace the diesel brought in
through the northern freight system.39 Although this would not fully
obviate the need for fuel from the outside world, it could cut it signifi-
cantly, and northern freight expeditions could be reduced to every sec-
ond or third year.
Wind is the most viable source of power in the north and one that
could be put to good use. Remote settlements in the north have the ad-
vantage of being able to use wind power for both electricity and cen-
tral heating. Any surplus electricity can be transformed into hot water
which can be stored in insulated tanks for a while until it is distributed
through the central heating system.40
Perhaps the most significant advantage of these remote northern
settlements as a market for renewable energy is precisely the fact that
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 11
they are not connected to the central electricity and natural gas grids.
Because they are so isolated, renewable energy in these locations will
not compete with subsidized natural gas and nuclear power, and the
owners of renewable energy power plants need not worry about the
technical and legal details of connecting to the grids.
Obstacles to Establishing Renewable Energy
in the Russian North
Despite these factors that can make remote northern settlements attrac-
tive as a breakthrough market for renewable energy, there are also
some significant obstacles. According to several interviewees, one of
the main drivers for the continuation of the northern freight is corrup-
tion. Although it is widely understood that most of the numerous cen-
tral heating and electricity generation plants in the country are highly
inefficient, it is difficult for the central authorities to get an overview
over exactly how inefficient specific utilities are – especially those situ-
ated in remote locations. This leaves considerable scope for misappro-
priation of fuel brought in by northern freight. Since no one knows
exactly how much is actually needed, it is also difficult to know how
much is illegally diverted. However, it is clear that many of the re-
sources provided through the northern freight system find their way
into private hands and then to local or regional markets. In some loca-
tions with largely non-monetized economies this phenomenon is so
widespread that diesel functions as the main currency – as in the road-
less parts of the Kola Peninsula. There, the rural population exchange
reindeer meat and salmon for fuel with soldiers at the local nuclear
submarine base at Gremikha in Murmansk Oblast, in complex barter
arrangements.41
The picture is further complicated by bureaucracy on the part of the
regional and central authorities and hedging on the part of local towns
and settlements. If there is a surplus, local settlements are not allowed
to keep it and are likely to have their quota for the next year reduced
correspondingly. However, it may be difficult for the local settlements
to predict exactly how much fuel they will need, depending on how
cold the winter is and how well the central heating system functions.
The safest option for local settlements is therefore to request more than
is required and then discreetly get rid of any surplus at the end of the
winter. Consequently, it can be difficult to distinguish whether settle-
ments need a lot of fuel because of inefficiency, corruption, or hedging.
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12 Sibirica
Another negative factor for expanding the use of renewable energy
in the northern settlements is that the population is steadily declining.
This is partly due to demographic processes and is partly encouraged
by the Russian authorities.42 On the other hand, this is a gradual proc -
ess and while some remote settlements decline, others will inevitably
expand along with the Russian economy, and new ones will have to be
established in order to take advantage of the country’s vast natural re-
sources. On the Yamal Peninsula, for example, it has been estimated
that the population will increase by 25 percent when Gazprom starts
extracting natural gas from the peninsula’s deposits sometime from
2011 onwards.43
A final potential challenge to the use of renewable energy in the
northern settlements is that their remoteness may make it difficult to
bring in maintenance staff and spare parts for renewable energy instal-
lations when needed. According to one interviewee, this has already
been a problem in some pilot projects. To deal with this challenge, any
introduction of renewable energy in remote locations should be done
as part of a large-scale state-sponsored program, in order to ensure
economies of scale. If small actors come in and set up a few windmills
in remote locations in isolated operations, some of these locations will
probably come to lack the spare parts and necessary competence in
maintenance, making such renewable energy unreliable.
Despite the obstacles outlined above, the towns and settlements
that are the object of the northern freight remain one of the most prom-
ising prospective markets for renewable energy in Russia today. These
settlements could emerge as one of the first realistic market niches for
the profitable implementation of renewable energy in Russia, while
waiting for better framework conditions in the rest of the country. As
such, they could function as a testing ground for renewable energy,
preparing the country and local and foreign actors for any future ex-
pansion in this sector.
Such projects would greatly benefit from the support of the local
and central authorities. In many cases renewable energy would be
more cost-efficient than the northern freight, thus giving the authori-
ties a monetary incentive for moving from severnyi zavoz to renewable
energy. As noted above, corrupt interests will be against such change,
but such interests will be mostly at the local and regional level, and the
authorities and politicians at the federal level should therefore be able
to force through such change. It would be easier for them than the
daunting task of reducing subsidies for natural gas and nuclear power,
to which the population has become accustomed over many decades
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 13
of Soviet and post-Soviet rule and which it tends to see as a birthright.
Thus, if actors at the federal level gradually become more open to the
idea that climate change is man-made and they need to contribute to
doing something about it, this is one of the most likely places for them
to start. There are already signs that President Dmitry Medvedev is be-
ginning to accept Western thinking on climate change.
There is also a role to play for foreign actors, above all in helping
to convince Russian scientists and policymakers that climate change is
anthropogenic and that Russia needs to contribute to limiting it. If they
could bring Russian federal actors onboard, much would follow from
that. Foreign actors can also play important roles in contributing tech-
nology, capital, and organizational skills to renewable energy projects
in remote locations. This might be more rewarding for them than try-
ing to push through large- (or small-) scale wind farms near major
population centers for connection to the large electricity grids, in the
face of insuperable bureaucratic and market power barriers.
Conclusions
This article has analyzed some key conditions for the development of
renewable energy sources in Russia. The vast size of the country com-
bined with the legacy of Soviet regional development policy means
that the electricity grid does not reach all households, particularly
those in the remote north. This creates a potential market niche for re-
newable energy. The current method of supplying these households,
the northern freight system, is heavily dependent on fossil fuels, as
well as being highly expensive and inefficient.
The necessity of focusing on isolated niche markets is underscored
by the continued subsidies for domestic gas consumption. I have laid
out the arguments for and against replacement of the existing system
of northern freight with renewable energy in Table 3.
Actors seeking to develop renewable energy partnerships with
Russia could benefit from focusing on niche markets where competi-
tion from cheap natural gas and nuclear power is avoided. While de-
velopers wait for Russian policy-makers to adopt an energy strategy
that significantly improves the conditions for renewables, working in
niche markets could serve as a stepping stone to future renewable en-
ergy development in Russia on a larger scale. Until a more positive and
proactive attitude to international climate policy spreads among Rus -
sian decision-makers and translates into new administrative and legal
Indra Overland
14 Sibirica
frameworks that promote renewable energy more broadly, this may be
the only such stepping stone in the country. In addition, installing re-
newable energy capacity in the far north could turn Russia’s legacy of
northern outposts into a sustainable form of settlement that mitigates
the consequences of the Siberian curse that Gaddy and Hill outlined.
Indra Overland is acting head of the Department of Russian and
Eurasian Studies at the Norwegian Institute of International Affairs
(NUPI) and associate professor at the University of Tromso, Norway.
He completed his Ph.D. at the Scott Polar Research Institute, Uni-
versity of Cambridge, in 2000 and previously worked for the Norwe-
gian Refugee Council, the Nordic Research Board, and the
Norwegian Ministry of Local Government and Regional Develop-
ment. He specializes in the energy politics of Russia and the former
Soviet Union. He is co-editor of Caspian Energy Politics (Routledge
2010) and co-author of Russian Renewable Energy (Ashgate 2009).
Acknowledgement
I am grateful to Heidi Kjaernet and Nina Kristine Madsen for their
extensive help with data-gathering and interviews, and to the Nordic
Energy Research for funding the research on which this article is based.
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 15
Table 3. Pros and cons of replacing northern freight with renewable energy
Pros Cons
1. No competition from subsidized 1. Parochial interests and corruption
1. gas and electricity via central grids. 1. give local and central actors
2. No need to connect to a large grid, 1. involved in northern freight
1. which is otherwise one of the main 1. incentives to maintain the
1. obstacles to renewable energy 1. existing system.
1. projects in Russia. 2. Potential logistical problems with
3. If efficiency is increased at the 1. spare parts and repairs.
1. same time as renewable energy is 3. The population in remote
1. increased, considerable synergies 1. settlements is declining faster
1. can be achieved. 1. than elsewhere in the country.
4. Renewable energy is already
1. profitable under current conditions
1. in northern freight settlements.
Notes
1. Fiona Hill and Clifford Gaddy, The Siberian Curse: How Communist
Planners Left Russia Out in the Cold (Washington D.C.: Brookings Institution,
2003).
2. Severnyi zavoz is also variously translated as “northern shipment” or
“northern deliveries.” See e.g. Timothy Heleniak, “Migration and Restruc tur -
ing in Post-Soviet Russia,” Demokratizatsiya, (Fall 2001): 1–18.
3. Arild Moe, “The Kyoto Mechanisms and Russian Climate Politics.”
(Presentation at the conference Renewable Energy in Russia: How Can Nordic
and Russian Actors Work Together? Oslo, 8 May 2008).
4. Moe, “The Kyoto Mechanisms”
5. Energy Information Administration, “Russia energy profile.” http://
tonto.eia.doe.gov/country/country_energy_data.cfm?fips=RS (accessed 9
June 2009).
6. Pavel Bezrukikh, “Netraditsionnye vozobnovliaemye istochniki energii.”
Teplovoy Energeticheskii Kompleks, no. 4 (2001): 31–45.
7. Bezrukikh, “Netraditsionnye vozobnovliaemye,” 31–45.
8. Ibid.
9. Elena Douraeva, Renewables in Russia: From Opportunity to Reality (Paris:
IEA, 2003), http://www.iea.org/textbase/nppdf/free/2000/renewrus_2003.pdf
(accessed 9 October 2009).
10. Russian Federation Law on Energy Saving, 3 April 1993 (amended by
Federal Law N42-FZ, 5 April 2003).
11. Anna Brown, “Russian Renewable Energy Market: Design and Im ple -
mentation of National Policy,” Russian/CIS Energy and Mining Law Journal 3, no.
6 (2005): 33–39.
12. Douraeva, Renewables in Russia.
13. This is highly relevant for Russia, which has heavily subsidized natural
gas for domestic consumption.
14. Elena Merle-Béral, “Russia Renewable Energy Markets and Policies:
Key Trends.” http://www.iea.org/Textbase/work/2007/ bestpractice/Merle_
Beral.pdf (accessed 23 July 2009).
15. Brown, “Russian Renewable Energy Market,” 35.
16. Pavel Bezrukikh, quoted in Elena Merle-Béral, “The Wider Perspective:
Russia’s Energy Scene.” (Presentation at the conference Renewable Energy in
Russia: How Can Nordic and Russian Actors Work Together? Oslo, 8 May 2008).
17. In addition to the figures in table 2, there are hydro projects planned
(capacity: 5GW by 2010), as well as wind projects in Kalmykia (23 MW), Kal in -
ingrad (50 MW), and Primorsk (30 MW). Two tidal projects are planned, one at
Mezenskaia (19 GW) and another at Tugurskaia (9MW). Douraeva, Re newables
in Russia. There may also be other projects in the pipeline, but the lack of com -
prehensive data makes it difficult to present a complete overview.
18. World Bank, “Russian Economic Report,” no. 18 (2009): 25.
Indra Overland
16 Sibirica
19. Jakub Godzimirski, “The Northern Dimension of the Russian Gas
Strat egy,” Russian Analytical Digest, no. 58 (2009): 4.
20. Ministry of Energy, “Russian Energy Strategy for the Period until 2030.”
Adopted by Russian Government on 27 August 2009.
21. Douraeva, “Renewables in Russia.”
22. Indra Overland and Heidi Kjærnet, Russian Renewable Energy: The Po -
tential for International Cooperation. (Surrey: Ashgate, 2009).
23. The base year for most countries in the Kyoto Protocol is 1990. This
means that a given country’s emissions in that year are counted as its regular
level of emissions, and any increase or decrease in emissions is calculated in
relation to that year. Being an economy in transition, under Article 3.5 of the
protocol, Russia could, however, have selected an earlier base year. See: Alex -
ander Golub and Elena Strukova, “Russia and the GHG Market,” Climatic
Change, no. 63 (2004): 225.
24. Jonathan D. Oldfield, Russian Nature: Exploring the Environmental Con -
sequences of Societal Change (Surrey: Ashgate, 2005), 56.
25. Michael Rassell and Susanne Wengle, “Reforming the L’goty System:
The Future of Inkind Benefits in Post-Soviet Russia,” Russian Analytical Digest
37 (2008): 6–9; Anastasia Alexandrova, Polina Kuznetsova, and Elena Grishina,
“Reforming In-kind Privileges at the Regional Level in Russia: Political De ci -
sions and Their Determinants,” in Fighting Poverty and Reforming Social Security:
What Can Post-Soviet States Learn from the New Democracies of Central Europe?
eds. M. Cain, N. Gelazis, and T. Inglot (Washington, Woodrow Wilson Inter -
national Center for Scholars, 2005).
26. Indra Overland and Hilde Kutschera, Pricing Pain: Prospects for Re duc -
ing Subsidies for Natural Gas in Russia. RussCasp working paper (Oslo: Fridtjof
Nansen Institute, 2009).
27. Elana Wilson Rowe, “Who’s To Blame? Agency, Causality and Re -
sponsibility and the Role of Experts in Russian Framings of Climate Change,”
Europe-Asia Studies, 61, no 4 (2009): 563–619.
28. Indra Overland and Heidi Kjærnet, Russian Renewable Energy: The Po -
tential for International Cooperation (Surrey: Ashgate, 2009).
29. O. V. Marchenko and S. V. Solomin, “Efficiency of Wind Energy Utili -
zation for Electricity and Heat Supply in Northern Regions of Russia,” Renew -
able Energy 29, no. 11 (2004): 1796.
30. Heleniak, “Migration and Restructuring in Post-Soviet Russia.”
31. Oleg Nikitin, “Kak perevozitsia neft’,” Tekhsovet. 33, no. 2 (2006): 4.
32. Bezrukikh, Netraditsionnye vozobnovliaemye.
33. Heleniak, “Migration and Restructuring in Post-Soviet Russia.”
34. World Bank in Russia, Energy Efficiency in Russia: Untapped Reserves
(Moscow: World Bank, 2008), 341.
35. Rosbalt, “Mintrans Raportuet o Vypolnenii Severnogo Zavoza” (Ros -
balt News Agency Press Release, 2007), http://www.rosbaltnord.ru/2007/09/
28/417963 (accessed 4 March 2009).
The Siberian Curse: A Blessing in Disguise for Renewable Energy?
Summer 2010 17
36. Sergey Krivitsky and Alexander Tsvetinsky, “Oil and Gas Exploration
on the Arctic Shore.” Proceedings of the Eleventh International Offshore and
Polar Engineering Conference, Stavanger: International Society of Offshore
and Polar Engineers, Stavanger, Norway, 17–22 June 2001: 662.
37. Olga Ioffe, “Severnyi Gorizont Rossii,” Tekhsovet 33, no. 2 (2006): 8.
38. Douraeva, Renewables in Russia, 59.
39. Anne Kreutzmann, “The Smell at the End of the World: Nitol Wants to
Produce Silicon in Siberia,” Photon International, no. 11 (2007): 30–47.
40. Marchenko and Solomin, “Efficiency of Wind Energy Utilization,”
1795.
41. Mikhail Oresheta, “Umchi menya, olen,” Poliarnaia Pravda, no 2 (1996):
1–2.
42. A joint program of the authorities and the World Bank started with a
pilot project to resettle people from the three northern towns of Vorkuta, Norilsk
and Susuman from 1998, and was expanded to resettle 600,000 people from
Chukotka, Kamchatka and Sakha.
43. Krivitsky and Tsvetinsky, “Oil and Gas Exploration,” 662.
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