As industrialisation and urbanisation enable the Asian economy to develop faster than ever before, the centre of world consumption is quickly shifting east to Asia. Among the Asian economies, China has emerged as the largest energy consumer given its tremendous development in manufacturing and infrastructure. Today, China's share in the world's energy consumption has reached 30% and continues to grow. This growth needs to be supported not only by resources from within China, but also by efficient energy solutions provided by China's neighbours.

Russia is closer to China than any of the world’s major energy suppliers. While it takes 35 days to deliver commodities from Brazil to Shanghai by sea, more than 20 days from South Africa, and more than two weeks from Australia, it takes only one day to deliver commodities from Eastern Siberia to China by rail via Mongolia, or 4-8 days to Shanghai from Russia’s eastern ports like Vanino.

While rapid growth presents great opportunities for China, it also creates some challenges which are not to be ignored. In 2011, the country’s electricity consumption increased by almost 11% and most of that was generated by coal, a major source of greenhouse gases. Of the 1000 GW of China’s installed capacity, more than 700 GW is coal-fired, roughly double the size of the US’ coal-fired power generation and 15 times that of the UK. The high proportion of coal-fired power results in the country consuming over 2.7 billion tonnes of coal each year and ultimately makes China the world’s largest producer of greenhouse gases.

China’s future coal consumption is estimated to increase steadily by a total of 1.21 billion tonnes from 2008 to 2015. China is very much aware of the challenge and has promised to reduce emissions. To deliver these cuts, China is replacing older coal-fired stations and is a leader in carbon-capture technology. Last year, China became the largest producer of electricity by wind farms. This is admirable, but it is not enough. The country needs to seek other clean solutions for its energy sector, and Russia can provide a potential answer.

An important resource that Russia has is hydro-energy. It has the second-largest hydro-energy resources potential globally - Russia can generate more than 800 TWh per annum, more than 75% of the total power consumption in the country in 2010. Russia’s hydro potential is only 20% developed, and the most undeveloped part is in Eastern Siberia and the Far East, close to China.

Importing Siberian hydro power to China would reduce the pressure on the environment by displacing the construction of fossil-fuelled plant. Hydro is also ideal for meeting peak capacity requirements and major fluctuations in demand. Furthermore, it can be brought on-line in minutes, avoiding the need to keep coal power stations producing surplus energy, and emissions, 24 hours a day.

While the benefit of Russia and China energy cooperation is clear, such development is still being hindered by a number of obstacles. For example, the current lack of energy infrastructure holds back electricity transportation between Russia and China. There is a need to establish a well-developed energy infrastructure, which will enable the development of new mineral deposits, as well as long distance electricity transportation and export to China.

Nonetheless, the future for energy cooperation between China and Russia remains undeniably bright. Both countries recognise their mutual relationship in terms of energy supply and demand, and energy companies from both countries are keen to tap the rich opportunities. And with the establishment of improved energy infrastructure, the true potential of China and Russia to co-operate on energy front will be released.

Lead image: Hydro dam via Shutterstock