New energy era
Moscow, June 23, 2017
Similar to food and water, energy is a basic necessity that helps strengthen economies and retain stability of socio-political systems. It's this necessity which in the next several decades will be posing major challenges to infrastructures, behavioral patterns, institutional frameworks and business models.
Denis Borisov, Project Manager from the Moscow office of Roland Berger, presented our company's view on the future of the global power and water industries at the annual AtomExpo 2017 congress, along with other high-profile speakers from governmental bodies, business majors and international associations, incl. Ministry of Energy of Russia, IAEA, IRENA, World Bank, Fortum, Electronuclear, General Electric, Siemens, ABB, Huawei, Dow, Veolia, Lagerwey and ReGen.
Denis participated in three round tables:
1) "Nuclear power: power of the future or relic of the past?" (panel participant);
2) "Clean water as ecological sustainability factor" (guest speaker);
3) "New energy. Integration into the global supply chain" (guest speaker).
The third round table on new energy is of particular interest, taking into account RB's notable recent project work in the renewables domain in Russia.
The round table was focused on Russia's recent first steps in renewables and how to tackle existing bottlenecks (incl. high demand for carbon fiber, lack of sizeable civil works contractors, early stages of equipment localization and smart grids development) to both make RES a success domestically and further expand internationally.
Speaking of the global perspective, in his speech Denis highlighted the need to understand emerging challenges for international majors before answering the question of how Russia can succeed in the global renewables market. In this respect Denis outlined 3 global competitive shifts:
1. more free-market environment when it comes to legislation and pricing,
2. more accessible market and more visible presence of non-specialized non-energy players entering it (e.g. TMT and IT companies, startups),
3. more intense competition between fuel and power unit types within the energy mix.
In response to these competitive shifts the largest players in the industry had already started sizeable consolidation moves aimed at joining financial, intellectual and technological resources via partnerships (e.g. Adwen) and M&A deals (e.g. Acciona-Nordex, Siemens-Gamesa). The ultimate goal of such joined effort is to secure technical and technological differentiation in the global RES market as the key competitiveness factor.
In order to establish itself as a RES market leader Russia would need to be ready to play the increasingly tense market rules and make venture-type investments, incl. adjacent technological segments such as energy storage, virtual power plants, demand side management and AI solutions.
We at Roland Berger retain positive outlook of the forthcoming industry shifts and will continue rendering our intellectual support to energy majors in the world of VUCA – Volatility, Uncertainty, Complexity and Ambiguity.
- Photos iZonda/iStock