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Russia: A change of sustainability mindset?
Days before he was due to attend the COP15 meeting in December 2009, President Medvedev approved the Climate Doctrine.
This policy aimed to:
• Provide an overview of the Russian Federation’s principles and goals for
climate change mitigation.
• Map out steps towards implementing a unified public policy covering climate
change and domestic and international risks associated with it.
At the COP 15 meeting, President Medvedev pledged to cut carbon emissions by 25% by 2020, with 1990 as the baseline year. This target has since been criticised as being insufficient; a 35% reduction is cited as a minimum requirement for tangible results.
Energy intensity in Russia per unit of GDP is still one of the highest compared to the OECD countries.
Energy efficiency - legislation highlights
A major piece of energy efficiency legislation, the Law on Energy Efficiency, was introduced in November 2009.
It aims to:
• Implement a broad set of measures to improve energy efficiency in Russia
• Address energy efficiency in all sectors
• Deal with energy performance assessment, energy ratings, specific
performance requirements and energy passports
• Include measures for regulating residential buildings
• Introduce mandatory commercial energy efficiency inventories for
new buildings
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Arcus III
Leningradsky Prospect,
Moscow, Russia
Source: www.arcus-ok.ru
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This law, if promptly and effectively implemented, will have far-reaching consequences for the real estate sector.
Government buildings are to set an example by ensuring that water, electricity and gas meters are installed by 1 January 2011. Rolling out metering to the rest of the building stock will take place in two further phases during 2011 and 2012. |
Energy prices in Russia, though lower than in other developed economies, have been rising over the past few years. This is partly due to Gazprom, (the Russian gas monopoly), increasing its wholesale gas prices for both domestic and commercial customers.
In light of the ongoing accession negotiations between Russia and the members of the World Trade Organisation, energy price liberalisation looks probable in the medium term, and this will drive energy prices up. The price increase should make landlords and tenants take action on energy efficiency when it comes to developing, buying or occupying buildings.
A sustainable energy future?
While energy supply in Russia is not an immediate concern, the prospect of shortages in a few decades is a distinct possibility.
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White Square,
Moscow, Russia
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Russian 2030 Energy Strategy, adopted in August 2009, hints at an increased proportion of renewables being used in energy generation with a particular focus on hydropower, already common in Russia. Additionally, new sources of renewable energy such as solar, tidal and wind power will be considered to ensure that the proportion of renewables in the energy mix is significantly increased by 2030. |
President Medvedev, in a statement on 27 of May 2010, acknowledged that there was no legal framework in place to increase the contribution of renewables to the energy supply as yet. He has however initiated a discussion about companies buying electricity from renewable sources at open market prices. Renewables, while not widely exploited now, remain an untapped potential in Russia; the topography of the country could lend itself very well to generating renewable energy from rivers and wind.
The government-owned nanotechnology corporation, Rosnano, has embarked on a large scale investment project in the area of alternative energy. Its key focus is on solar panel manufacturing.
Sustainability is not yet high on the agenda
The fact that the government’s overall intentions on climate change are not yet entirely clear is also reflected in the lack of public awareness of the issue. There is also a limited media discussion about energy and water resources.
In the business community, sustainability is relevant when foreign direct investment is involved and environmental issues need to be tackled to ensure that funding can be obtained. This is certainly visible in the real estate market, which is beginning to respond to both the regulatory push factors (for example the new energy efficiency legislation) and the demand pull factors.
A sign of progress has been the establishment of the Russian Green Building Council in 2009 with some of the leading property players (including Hines, Bovis Lend Lease, IKEA, and Ernst & Young) as its founding members. This body is also a member of the World Green Building Council.
An Olympian influence on green buildings
The biggest driver for ‘green talk’ in Russian real estate so far has been the construction of the Olympic site for the 2014 Winter Games in Sochi. The International Olympic Committee required the Russian Federation Organising Committee to build the Olympic facilities in accordance with best practice green building standards.
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WWF Headquaters
Moscow, Russia
Source: www.wwf.org
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State-owned Olympstroy pledged not only to develop and apply its own corporate green building standard to the Olympic buildings but also to ensure that ten major Olympic facilities achieve BREEAM or LEED certification. In its recent statement, WWF Russia said that this corporate standard "… is the first case where a complex document fixing requirements for ecologically and energy efficient construction has appeared in Russia."
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In other areas of construction, sustainability is being introduced both as a result of corporate demand and as more international investors and developers follow their own commitment to building ’green’. There are now a number of high-profile green buildings in Russia, setting an example for the rest of the market. |
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Green Buildings in Russia
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Building |
Certification |
Location |
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General Electric Factory |
LEED |
Kaluga |
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Hines International Offices |
BREEAM |
UL.Gasheka, Moscow |
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White Square |
BREEAM |
Beloruskaya, Moscow |
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Arcus III |
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Leningradsky Prospect, Moscow |
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New WWF Headquarters |
LEED |
Moscow |
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Siemens HQ |
LEED |
Moscow |
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Business Centre on Obvodnoy Canal |
LEED |
St Petersburg |