Gas and Electricity

Natural gas and electrical power occupy a central place in the Russian economy. First, these industries are striking in their sheer size and scope. Russia possesses roughly one third of the world’s natural gas reserves, mostly concentrated in 20 large fields, and currently supplies one fourth of all gas on the world market. Russia’s electrical power infrastructure, consisting of 214.3 million kilowatts of generating power, 43.4 thousand kilometres of high voltage grid, and 2 627 thousand kilometres of low voltage grid, represents the largest such structure in the world. The volume of Russian electricity production is second only to that of the United States. Roughly, 30 per cent of all federal budgetary revenues came from the taxation of gas and electricity in 2000, while natural gas also accounted for 20 per cent of all Russian export revenues. While most industrial branches of the Russian economy experienced sharp decline for most of the 1990s, gas production remained relatively stable and the electricity sector maintained more than enough capacity to service demand (Figure 21). Gas and electricity are also very closely linked in Russia, not only as potential substitute energy sources, but because almost 40 per cent of natural gas supplied domestically goes toward the generation of electricity.

OECD Economic Surveys: Russian Federation 2002

Gas and Electricity

Regulation and Reform