Oversupply in Russian energy industry

Total installed capacity reached around 243 GW in 2015

Autor: Christy Gilmour Okroj Drummond

Economic growth prospects for 2016 and 2017 could be diminished due to an oversupply of electricity in Russia. Optimistic forecasts, given in 2011 by the Energy Forecasting Agency, concerning the demand for electricity motivated an excess in the construction of new generation capacities making investment recovery challenging. At the same time, while the installed capacity is currently estimated at around 243.3 GW, the maximum load of installed capacity in the country has not overpassed 160 GW since 1991.

The amount of new generating capacity installations completed in 2014 stood as the best performance in the last decade.

Despite Russia's efforts to improve renewable energy, development in the sector remains poor. In 2015 renewables only covered 0.5% of the total installed energy capacity in the country and will probably not exceed 3% by 2024. The main reason for this deficient performance is the lack of functioning support measures. Companies have shown a great interest in solar power projects, in contrast to a weak investment in wind and hydroelectric power.

Further information can be found in PMR's report "Construction sector in Russia H1 2016".

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