The year 2025 has started. In Russia it is still holidays, the West began working week.
What are the main trends we have in the power industries across the World today? The hype of energy transition with all those famous green deals, Inflation reduction act, Hydrogen projects around the globe, ESG agendas as a kind of new religion is gradually slowing down, waning away, and we all feel that, even if we don’t want to believe our feelings.
We had many hypes in last 10 - 15 years, just name it – Smart grid as a silver bullet for all the problems, then DERs and Demand Response along with energy saving and conservation, Energy transition as crystal ball of the bright future, and lastly it became AI, Data centers, Mining with their huge demand for electricity and simultaneous concerns that there is not enough energy on the globe, and especially across countries which are relatively poor in fuel resources such as Western Europe.
It was them, those countries, first and foremost initiated and widely promoted renewables in power production, advanced green agenda all over the world, led us to the current energy transition which is probably generally justified but to a certain extent is a pure hype, a kind of fever with all inevitable negative side effects.
The problem is that all those efforts and developments need a global approach across the world, since environment does not recognize political and even geographical borders, and globalization as phenomena is an inherent part of energy transition agenda. But since 2014 this approach has been being gradually at first and then abruptly disrupted in 2022, ripped off and paradoxically it was initiated and carried out by exactly same forces, politicians and countries which initiated all these globalist agendas, which invested so much into the new green religion propagation over the world, working so hard that it sometimes looked as a pure propaganda.
We know what had happened in 2022, we may evaluate it differently, but the matter of fact is that the West and European union in particular had started this war of total sanctions disrupting and ruining the global system of energy security and energy transition as a part of this process.
As a result we can see today a lot of problems in Europe, where prices for power and energy in general are getting extremely volatile and sometimes are threatening to bury the entire idea of European Single electricity market, we see the situations when some countries and regions face potential and real energy shortages, we can see quite solid signs of deindustrialization in many European countries, and not only peripheral ones but core ones, as Germany which has always been a locomotive of the EU economy.
Yes, it’s true, these tendencies, these crises often have become drivers for new technologies advancement as it happens with batteries systems flourishing on several European markets, as well as for instance efforts to shorten bid intervals and pricing time formation units in Nord pool, which makes markets more liquid and less volatile, but in general it just provides some temporarily reliefs for current energy problems not resolving the core of them - the disruption of energy security on the globe.
On the other side of these barricades is Russia with all its great potential for providing energy resources for the world but artificially limited in its capacity to do so, and at the same time needed in technologies to face huge challenges related to necessity to completely rebuild its power sector within next 20-30 years. And now Russia wants to fulfill this strategic task on its own, being cut off from western technologies, western partners and suppliers which used to have a lucrative market there, but failed to bring healthy competition and genuine relations which could have created a solid base for Russia’s integration to the West, both economically and politically.
This is a two ways street, of course, Russia is also not an angel but results of such policies of both sides are on the table. They are both losing, economies are in crisis, for Russia because of that the cost of power industry renovation is going to be much higher and the process is much less competitive and much more complicated. Russia as a country becomes less market based, more authoritarian in all senses and that of course changes the balance in the world in general, liberal market ideas in Power industry are on retreat.
In the middle of those antagonistic sides, we can see such countries like Kazakhstan, Uzbekistan and Central Asia where there are no efficient markets had been built during all post-Soviet years, but which are also facing similar to Russia's problems, even worse since they don't have any infrastructure to move on down this road.
The pathways they have chosen so far can't be considered as effective and sustainable. Most of the projects in Central Asia are built by foreign companies which seek the profit in the first place, structuring projects in a way that doesn't bring technologies to the countries and engage minimum local workforce, the lengthy projects allow to minimize prices but create conditions for assets to become stranded in future. Besides these projects often are structured as exterritorial ones, when investors repatriate all earnings abroad not providing countries with technologies and education, thus making them totally dependable on investors attitude and kindness. And that might be dangerous as we may see it in case of anti-Russian sanctions today.
In general, all these unilateral sanctions by the group of the countries or individual countries which are unleashed in recent years in contradiction with international law and UN Charter, which are based on the evaluation of world events and developments from these countries’ standpoints, are totally destructive for the world development in the long run. We are not in the kinder garden, where some kids from richer families bring their expensive toys and share them to play with others, but when they don’t like someone, they just take their toys back as a punishment. The current western sanctions against Russia look exactly this way. They are counterproductive in all senses and aspects. They are detrimental for both sides and for prosperity of the world in general. All conflicts have their roots and reasons. They must be identified and worked with to be eliminated. It’s time to comprehend this simple truth.