Nelly Segisova is the CEO of SCT Group providing strategic advice bringing advanced “smart city” technologies to regional infrastructure upgrade projects in Russia. SCT Group also conducts sustainable growth and development research. Previously, Segisova was Project Director, Russia at Xynteo, advising on low carbon solutions and responsible for public and private partnerships for resource-efficient growth in Russia. She also worked at the Russian Energy Agency where she headed international cooperation efforts, and produced a number of high-profile papers and leadership events on the low-carbon agenda.
Q1: What are the challenges facing low carbon growth in Russia? What is your organisation doing to promote sustainable development in Russia?
A: Over the last several years the subject of sustainable development has become increasingly important in Russia. This is evident from the ongoing reform of energy efficiency and environmental legislation in Russia, civil society initiatives and new, greener, business practices. In addition to the environmental legislation, the low-carbon development path was defined in 2009, when the Federal Law “On Energy Saving and Improvement of Energy Efficiency” was passed in state parliament. This law is constantly being updated by regular decrees, whereby the government gradually imposes more advanced regulations on the population and industry such as mandatory energy metering and energy audits.
The Russian government has long stated its strategic goals are to modernise and improve the efficiency of the economy at large. The necessity of moving away from a solely extractive economy is well understood by decision-makers. Policies which aim to increase the efficiency of resource use and preservation already exist. Examples include the Concept of Long-Term Development of Russian Federation (2008), the Concept for Long-Term Socio-Economic Development of the Russian Federation through to 2020 (“Strategy 2020”) (2012), the Basic Principles of State Environmental Development Policy of the Russian Federation through to 2030 (2012) and Russia Energy Strategy 2030. There is great scope for international cooperation in this field with regards to technology and developing the clean industry.
There is still a long way to go towards sustainable development and the green economy in Russia. It is very important to take a systematic approach to understand the practice and perspectives of sustainable development from economic, ecological and social aspects. Given that Russia is such a rich country in terms of natural resources, their intensive development is expected. The two main challenges in this are improving energy efficacy of resource extraction and the energy efficiency of the wider economy. There is vast potential for modernising energy consumption where efficiency measures could lead to savings. To advance manufacturing and infrastructure, it is imperative to use advanced technology and knowledge intensive industries wherever possible. This requires advanced methods of management and strategic thinking.
The way to incentivise the development of quality staff in the field is through education – all parties must feel that they are part of the modernising process and understand why it is crucial that Russia develops greener industries. It is difficult but essential to get leaders from the government, civil society and private enterprises thinking about sustainability. A green economy in Russia requires a long period of economic transformation and modernisation, structural and technological change and most importantly the formation of a "new" responsible citizen.
As a consultant, our company specialises in the currently niche area of smart city technologies. Our aim is to bring advanced “smart city” technologies to regional infrastructure upgrading projects in Russia. We work on integrating products of international companies into infrastructure projects and can synergise with other corresponding technologies for projects where each can find their place in the same market. This allows companies to essentially cooperate with their potential competitors. We also put a lot of effort to raise awareness of the sustainable technological solutions already available in Russia or internationally, as well as highlight to small and medium enterprises the importance of thinking about energy efficiency and sustainability.
Q2: You implemented advanced "smart city" technologies and regional infrastructure projects in Russia. Can you share with us some case studies and key takeaways?
A: During the first project it is imperative to get the division of labour correct and create an effective blueprint for future projects. The first try is always the most difficult, as it is a crucial experiment – especially from the angle of government and public relations. A perfect situation is when bureaucrats who would pose potential barriers are talked to in such a fashion that they begin to help the project along. This complicated process requires local expertise.
A successful project of ours was developing a long term partnership with a local company in Yakutia region and advising them on introducing energy efficient technologies and ESCO principles for modernisation projects on public buildings. We also provided legal support and mediation services. As a result, we observed an efficiency improvement rate of more than 50% as well as a much higher than expected return on investment. The lending banks were impressed to the extent where they were willing to initiate new projects of the same character but on a bigger scale with the same "set" of players. Our client also built up trusted relationships with international technology suppliers and more importantly, local and regional government. This in turn led to a significant increase in the number of projects won during various tenders. Our partner is becoming a specialist in modernising public and industrial buildings. They are achieving efficiency gains even in the difficult sector of social residential housing and in the extremely challenging climate of Yakutia, where temperature can fall below negative 60 Centigrade.
Our next step would be to hopefully initiate a small but exemplary project in Yakutia, which would include major elements of smart city technologies in the region’s water, transport and energy sectors.
Q3: How can smarter cities play a role in helping Asia address its acute energy needs and are there any technologies that can help Asia promote sustainable development?
A: The attention should be focused on providing guidance and resources to help cities draft plans for sustainable development and integration of technologies to that end. Considering that smart cities are the hubs of innovative technologies, their true efficiency will be ensured by the smart connection to other cities or states reached by the advanced modes of transport and energy or communication networks.
This means that there will be a lot of policies which need to be negotiated and accommodated. The levels of investment needed to make sustainable development projects viable and effective are so high they require international cooperation. Hence, there is a need to adopt, where possible, clear internationally harmonised rules and technological standards for cross border cooperation.
For Asia, smart cities should play a fundamental role in addressing its huge and rising population, as well as ensuring energy security. New technologies and the rate of their adoption will determine the future energy landscape. As many analysts state, a more or less balanced share of fossil fuels to alternative clean technologies in the world fuel mix can be expected no sooner than 2050.
Prior to that, we will have to use those technologies that are at our disposal today and continue using fossil fuels, but in more effective ways. For example, when it comes to smart and sustainable mobility as an important part of the smart cities operations, there are technologies which should be considered by many city administrations regardless where the city is located. In Asia, it is the use of natural gas in CNG or LNG form, which is more environmentally friendly than alternatives, for transportation purposes. Similarly, despite our huge oil reserves in Russia, we are taking the opportunity and transforming our transport fleet into the greener CNG- and LNG-driven vehicles.
Our company has conducted a pre-study for one international super major operating in Russia on the prospects of using LNG as a motor vehicle fuel in different Russian regions. We saw a huge opportunity for international cooperation in this field. Taking into consideration Russia's vast size, which includes many different landscapes and environments, the country is a playground for economic experimentation. Russia's long southern border also allows for effective communication links with Asia, which in the future will facilitate more mutually beneficial interactions.
Q4: What is your view on the role of Russian energy companies in the booming Asian energy landscape?
A: We believe that a combination of advanced technologies with reliable and proven methods of energy diversification can bring sustainable benefits to all. Russian-Asian co-operation in this regard could be viewed as a unique historical opportunity for transition to the new "green" age. Russia is the home to the biggest natural gas reserves, and other minerals deposits, while Asian countries have the desire and abilities to develop new innovative technologies which need resources. There is much synergy to be found here. Russian companies are unique in their capacity to provide long term energy security and stable supply to Asia. Recent developments are moving the two regions ever closer in this relationship.
Q5: Given the increasing connectivity between Russia and Asia, what are your views on energy connections between the two in the near future?
Improving connectivity, better transport links and more emphasis on cooperation will mean a great increase in cooperation both in traditional sectors of fossil fuels as well as new technologies. The previously mentioned relationship will only grow stronger. Both regions have much to offer one another and SCT Group looks forward to helping facilitate this vital trade in any way we can.