Page 97 - RusRPTJan22

The plan is to be presented by 1 July 2022. Putin also ordered that it assess grid construction in order to be able to unify OES Vostoka and Siberia.
· Energy strategy. Putin requested that the government commission update Russia’s Energy Strategy to account for decarbonisation through 2050 (vs. 2035 currently), including steps to increase low-carbon and non-carbon generation. This has to be completed by 15 April 2022, and must be accompanied by an updated Energy Efficiency Programme to align it with the low-carbon strategy.
· CCS. The President ordered the government to assess the legislation for storing CO2 underground, and how it is to be applied, by 1 February 2022. Gazprom Neft and the Orenburg authorities are to work out the required support measures on CO2 CCS by 1 April 2022.
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· The carbon trading experiment in Sakhalin is an important step in the development of the national carbon trading system, while its potential expansion to four more regions is even more promising.
· Developing HPP and GAES generation is important for the Russian generation outlook, which is planned to be dominated by low carbon and carbon-free generation by 2050, with coal accounting for only 4% in the mix. RusHydro is working on an assessment of anti-flood HPPs, and also noted its Krapivinskaya HPP assessment, but the projects have to be granted a guaranteed return to create value for the company.
· The energy strategy update would make it possible to align the national energy outlook with the more ambitious targets in the low-carbon strategy.
· CCS projects are getting more traction, with MinEconomy expecting them to be one of the solutions for sectoral decarbonisation. At this stage, there are O&G companies exploring this option.
Along with all these developments, we still believe Russia will choose the cheapest decarbonisation options. These include reducing waste sector and methane emissions, decarbonising the electricity sector with renewables and forestry projects.
The Ministry for Economic Development has drawn up the procedure for determining the payment for services provided by the operator of the register of carbon units and submitted it for approval to the Ministry of Finance, the Federal Anti-Monopoly Service and the Bank of Russia.
In particular, MinEconomy has proposed setting a maximum price for certain operations: opening an account in the register, as well as registering a climate project, can cost no more than RUB18,000, making an entry about the release of carbon units is to cost no more than 1% of the cost of carbon units (the cost of one unit is RUB2,000
97 RUSSIA Country Report January 2022 www.intellinews.com