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Russia plans to develop Kuril Islands

Dimitris Giannakopoulos

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Welcome to the Caspian Daily, where you will find the 10 most important things you need to know on Caspian Sea Region. We appreciate ideas, reports, news and interesting articles. Send along to Caspian[at]moderndiplomacy.eu or on Twitter: @DGiannakopoulos

1Russian Prime Minister Dmitry Medvedev indicated Thursday he plans to inspect economic development on some of the Kuril Islands, about 1,300 km northeast of Hokkaido, including four claimed by Japan.The inspection may be designed to demonstrate Russia’s effective control of the four islands, which were occupied by Soviet forces following Japan’s surrender in World War II on Aug. 15, 1945. Earlier in the day, the Russian government approved a 10-year plan to develop the Kuril Islands. Medvedev said the government will spend 70 billion rubles the plan. Japan has urged Russian Prime Minister Dmitry Medvedev not to visit Japan-claimed islands off Hokkaido, Foreign Minister Fumio Kishida said today (July 24), calling the planned trip to the isles at the center of a long-standing bilateral dispute “unacceptable”. Mr Kishida said that the visit, if it pushes through, would “go against Japan’s position on the territories and hurt the feelings of the Japanese people”.

2The presidents of Armenia and Azerbaijan are ready to meet later this year in another attempt to revive the Nagorno-Karabakh peace process, international mediators said on Thursday as they ended their latest tour of the conflict zone. The U.S., Russian and French co-chairs of the OSCE Minsk Group issued a joint statement in Baku after holding talks there with Azerbaijani President Ilham Aliyev. They met with President Serzh Sarkisian in Yerevan earlier this week.

3Turkmenistan is implementing several major projects aimed at increasing the production and export of natural gas, as well as the projects for deep processing of gas, the country’s Ministry of Oil and Gas Industry and Mineral Resources said July 23.The total cost of these projects is $20 billion.Moreover, these projects include the second stage of Galkynysh field’s development, construction of Turkmen sector of the fourth branch of Turkmenistan-China gas pipeline with the total capacity of 30 billion cubic meters of natural gas, a plant for polyethylene and polypropylene production in Balkan province, as well as a plant for producing synthetic gasoline from natural gas in Ahal province.

4Not déjà vu all over again. The nuclear agreement with Iran is very different from the one with North Korea. “Just as important as the technical differences between the two agreements are the differences between the two societies. North Korea is the most hermetically sealed country on earth. Ending its isolation by exposing its terrified, impoverished people to outside influences was the last thing the Kims wanted. Iran has a large population of well-educated young people who use the internet and social media. The election of President Hassan Rohani was brought about by businesses and citizens painfully aware of the economic damage done by sanctions. Opportunities to trade with the rest of the world could revitalise Iran’s economy.” [The Economist]

5During a two visit of India’s Prime Minister Narendra Modi to Kazakhstan, the two countries have signed a number of new agreements in energy and defence.Kazakhstan and India expected signed agreements on supply of uranium and moved forward with their cooperation in rare-earth elements.The CamKazInd fund aims to combine Kazakhstan’s rare-earth elements and mineral wealth with India’s human capital and the experience of Cambridge scientists to develop various technologies.Quantum technologies using Kazakhstan’s minerals have a great potential in computers, keeping food fresh and decreasing mobile phone bills.

6Azerbaijan’s Foreign Minister Elmar Mammadyarov received Richard Hoagland, the US Principal Deputy Assistant Secretary of State for South and Central Asian Affairs on July 23. Cooperation in transportation and energy industry were discussed during the meeting.Hoagland, noting that he supports his country’s initiative for the development of the ‘Silk Road’, said Azerbaijan is playing an important role in this regard.He said the realization of these initiatives will serve to the stability, prosperity and development of cooperation in the Eurasia.Mammadyarov, for his part, said that Azerbaijan is carrying out a consistent work to enhance the capacity of the transport infrastructure as an important element of the strategy of development of the non-oil sector.In this context, Mammadyarov noted the importance of the Baku-Tbilisi-Kars railway and the new Baku International Sea Trade Port.

7Southern Russia Mobilizes Against Islamic State. Moscow appears to be seriously concerned about the changes taking place within the ranks of the North Caucasian armed Islamists and the unexpected emergence of a branch of the Islamic State (IS) in the region. IS leader Abu Bakr al-Baghdadi declared the establishment of the Velayat Kavkaz of the Islamic State on the basis of the former Caucasus Emirate. [Jamestown]

8Russia guarantees energy security for Europe through the development of new gas transit capacities, Russian Prime Minister Dmitry Medvedev said. In December 2014, Moscow announced the cancellation of its South Stream pipeline project that was to transport Russian gas across the Black Sea to Europe. Russia cited the “non-constructive” stance of the European Union as the reason for scrapping the project. The European Commission claimed that the project would violate the EU Third Energy Package that prohibits simultaneous ownership of both the gas and the pipeline through which it flows.”Turkish Stream is taking South Stream’s place. It’s not proceeding as fast as we’d like, but it’s not stalled either. And then we thought of building a second Nord Stream line, which delivers Russian gas to Germany across the Baltic Sea. You probably heard that we have signed a memorandum between our companies to increase the gas volume via Nord Stream. So Europe’s energy security will be guaranteed,” Medvedev said in an interview with Slovenian radio and television company RTV Slovenija on the eve of his visit to Slovenia.

9Azerbaijan and Turkey will jointly invest in the renewable energy sector, Turkey’s Public Disclosure Platform said on July 22.The relevant Memorandum of Understanding was recently signed between the Turkish Turcas Enerji Holding and Azalternativenerji under Azerbaijan’s State Agency on Alternative and Renewable Energy Sources.According to the document, the sides will jointly invest in the construction of solar, wind, and geothermal power plants in Turkey and Azerbaijan, along with implementing other projects.The contract is valid for a period of three years from the date of signing.According to preliminary studies, Azerbaijan plans to construct up to 100 facilities for producing alternative energy in five years.

10President of Turkmenistan Gurbanguly Berdimuhamedov has received Martin Bouygues, chairman and CEO of French Bouygues company.During the meeting Bouygues informed the president about the company’s facilities, and made new proposals regarding the further partnership. These proposals were worked out taking into account the priorities of socio-economic development and ambitious reforms in Turkmenistan, also his interest in further strengthening its positions on the promising Turkmen market, where the company has been operating for more than 25 years. “The concept of further development of Ashgabat and other cities in the country offers great opportunities for fruitful cooperation with foreign partners, including the French companies,” the president said. The most important things are the timeliness and qualitative construction of facilities. Bouygues has been represented on the Turkmen market for a long time. The French concern has carried out several projects.

Journalist, specialized in Middle East, Russia & FSU, Terrorism and Security issues. Founder and Editor-in-chief of the Modern Diplomacy magazine. follow @DGiannakopoulos

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Clean energy transition in Ukraine

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On 18 December 2018, the EU-Ukraine Renewable Energy Investment Forum takes place in Kyiv, co-organised by the European Commission’s Directorate-General for Energy, Ukraine’s Parliament’s (Verkhovna Rada) Energy Committee, the Ukrainian State Agency on Energy Efficiency and Energy Saving, and Ukraine’s energy think-tank, Dixi Group.

The forum’s aim is to showcase the EU’s best practices on its uptake of renewable energy sources and discuss policy measures to boost the market and increase the share of renewables in Ukraine by 2020. The EU is leading the way in the global clean energy transition, in the process becoming the world number one in renewables. By agreeing in 2018 on ambitious renewable energy and energy efficiency targets and a new supporting regulatory framework, the EU is keeping its leadership role in the fight against climate change, and upholding its commitments under the Paris Agreement. In addition, the EU has now put on the table its long-term vision for 2050, aiming to become the world’s first major economy to go climate neutral by mid-century.

As Ukraine reforms its energy policy in line with the EU energy acquis, provided for in the EU-Ukraine Association Agreement and undertaken by Ukraine in the Energy Community Treaty, the Renewables Investment Forum is an excellent opportunity to discuss and share best practices from the EU as well as from other parts of the world. The event will gather some 200 key Ukrainian and European stakeholders working on energy policy and renewable energy policy in particular, as well as members of the international community active on renewable energy policy in Ukraine.

Speaking before the start of the forum, the European Commission Director-General for Energy, Dominique Ristori, said: “The EU’s vision to put Europe at the forefront of clean and renewable energy production and the fight against climate change is now becoming a reality. Our policies are accelerating public and private investment in renewables, creating jobs and growth, and enabling citizens to benefit from the transition to a modern and clean economy. Our Ukrainian partners have also come a long way in this path, and it is solid proof of the European commitment of the Ukrainian nation. I believe this event will be a catalyst to unlock all the potential Ukraine has in the field of renewable energy sources. In particular I hope the discussions will focus on innovative approaches on renewable energy and the use of cutting-edge technology.”

Head of the EU Delegation to Ukraine, Ambassador Hugues Mingarelli added: “Renewable energy will contribute to the establishment of a more competitive and sustainable electricity market in Ukraine. It will help reducing emissions and air pollution, and it will facilitate the integration with the EU electricity system. The European Union will continue to support the development of a sustainable electricity market in Ukraine, and I am convinced that this forum can make a very useful contribution on this way.”

On Ukrainian side, the Acting Head of Ukraine’s Parliament’s Energy Committee Oleksandr Dombrovskyi commenting on legislative initiatives aimed at boosting RES development in Ukraine noted: “Introduction of auction system will reduce the cost of “green” energy for consumers and will create the conditions for effective competition. Today, renewable energy sector in Ukraine is developing rapidly, especially this is relevant for solar and wind electricity generation. So, installed capacity of solar power stations at the end of the III quarter 2018 reached approximately 1100 MW, while at the end of 2014 it was at the level of 411 MW. Recently,   the cost of electricity generated from RES has been reduced in the world considerably as active development of technologies in this area contributes to making equipment cheaper. Therefore, the need in changing the approaches in support of RES generation in Ukraine has appeared. We have to define the new strategic horizons for planning and perspectives for Ukrainian and foreign investors. New support system, proposed in the text of our revised draft law shall balance the interests of electricity consumers and other market participants by providing further development of renewable energy sector and by reducing the growth of financial pressure on the end electricity price. The electricity price will be defined in the process of competition – from introduction of auctions the consumers, the participants of competitive market and investors will win“.

Head of the State Agency for Energy Efficiency and Energy Saving of Ukraine Sergiy Savchuk speaking about renewable energy status and results informed that: “Over the past 4 years, about 1.5 billion euros have been invested in new renewable energy projects in Ukraine. In particular, 1 billion euros are invested in more than 1000 MW of new renewable power generation and 460 million euros – in 2000 MW of new biomass-to-heat generation capacities.  It is a great contribution into energy independence and economic development of Ukrainian communities. Today, we continue improving the legislation with the aim to create favourable conditions for renewable energy development, attracting the best European experience“.

Among the main participants on the Ukrainian side were Vsevolod Kovalchuk, Acting CEO of Ukrenergo, and on the EU side, Gerassimos Thomas, Deputy Director-General, DG ENER.

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UNIDO, Italy support small manufacturers in Iran to comply with global environmental agreements

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The United Nations Industrial Development Organization (UNIDO) and Iran’s National Ozone Unit (NOU) today organized a workshop in Tehran to formulate a technical and business strategy to support small manufacturers of refrigeration equipment and insulation material with the adoption of new ozone- and climate-friendly substances and technologies. This will contribute to Iran’s efforts to comply with its commitment, under the Montreal Protocol, to reduce its use of ozone-depleting substances – specifically, hydro-chlorofluorocarbons (HCFC) – commonly used in this sector.

Through the Multilateral Fund for the Implementation of the Montreal Protocol, UNIDO and Italy assist small manufacturers of refrigeration equipment in Iran – ranging from small chillers to domestic and commercial-scale refrigerators – to adapt their manufacturing processes and products in compliance with the second stage of the HCFC phase-out plan set by the Iranian government.

During the workshop, technology suppliers explained how small manufacturers can continue their operations with alternative chemical substances, while maintaining safety. “The NOU will consider the outputs of this workshop in the national strategy, hoping to successfully meet challenges ahead, specifically for small and medium-sized enterprises,” said Medi Bakhshizade, project coordinator of Iran’s National Ozone Office.

Several alternatives to HCFCs are readily available, but some of them are known to have high global warming potentials (GWP). Under the Kigali Amendment to the Montreal Protocol, a direct switch to natural refrigerants, which have zero ozone depleting potential (ODP) and low GWP, is encouraged.

In the case of Iran, the most promising alternative for small companies is cyclopentane, which could be locally produced if there is enough demand. However, the substance is high flammable, meaning new technical skills and safety installations and equipment would be required and these constitute a major financial barrier for small companies. Active cooperation between companies, local chemical formulators and technology suppliers could help tackle this barrier.

UNIDO project manager Fukuya Iino said, “UNIDO would like to promote energy-efficient technologies while phasing out HCFCs. Small companies are faced with challenges to adopt new technologies, and this is why we are asking possible technology suppliers to share their know-how with them.”

A number of technology and financing options to support small manufacturing companies were presented during the workshop. The event offered a platform for small beneficiary manufacturers, technology suppliers, chemical material formulators, governmental focal points, and other stakeholders, to share knowledge and develop partnerships.

Among participating speakers were technology suppliers from Italy (two), Australia (one) and Iran (one). Forty-five participants actively joined the discussion between speakers, panel members, and the audience.

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The Future of the Armenian-Chinese Relations

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December 13-16, 2018, Yerevan- leading scholars from the Chinese Academy of Social Sciences were invited by the “China-Eurasia” Council for Political and Strategic Research, foundation to visit Armenia. Within the framework of the visit with their Armenian colleagues Dr. Xiao Bin, Dr. Bao Yi and Dr. Wu Hongwei participated in an academic seminar “China, Eurasia and Armenia: Views from Yerevan and Beijing.” It is worth mentioning that Chinese initiative “One Belt, One Road” provides a lot of opportunities to other states to get Chinese investments, but they are not any big Chinese investments in Armenia, even if we compare with other South Caucasian countries. Professor Wu Hongwei emphasized that the Chinese-Georgian relations have developed dynamically, and the Chinese side is making huge investments there. He expressed hopes that through the information and contacts with Armenian specialists obtained during the visit, it will be possible to draw new recommendations through which it will be possible to develop economic relations with Armenia. In turn, Dr. Bao Yi presented her research on China’s humanitarian cooperation with Central Asian countries and noted that this successful experience can also be used in the South Caucasus. Dr. Xiao Bing introduced his paper on promotion of the cooperation of international capacity under One Belt, One Road initiative in the era of technological transformation.

The head of the ARMACAD, Dr. Khachik Gevorgyan told  about the  prospects of the ARMACAD in the  development of Sino-Armenian academic relations in the framework of the One Belt, One Road.

The organizer of this academic event, Dr. Mher Sahakyan, head of the “China-Eurasia” Council for Political and Strategic Research, foundation, spoke about the prospects for the development of the Armenian-Chinese relations in the framework of the Chinese initiative. As he noted, if a branch of one of the leading Chinese banks opened or if Armenia and China establish a joint bank, the result will be significant financial investments in Armenia. The financial field of the country will be diversified, and if Dram-Renminbi conversion is implemented, bilateral trade between Armenia and China will be realized in their own currencies. He recommended, that Armenia can try to stand a Regional member of the Asian Infrastructure bank and after get sovereign backed or non-sovereign backed loans for its state-owned noncommercial organizations, private organizations, and international organizations which works in the territory of Armenia, that they invest this money in Armenian North-South Road Corridor, whichwill significantly enhance Armenia’s capabilities to be involved in the Silk Road Economic Belt’s China-Central Asia-West Asia Economic Belt. Armenia and China can also start cooperation in UN peacekeeping missions, as both states are interested in it.

Dr. Mher Sahakyan, also talked about the possibility of creating an Armenian-Chinese joint military-industrial center in Armenia, which will produce military robots, drones and so forth.

He also noted that Armenia can negotiate with China for its participation in the “Digital Silk Road,” Armenia and China can also cooperate on the research of the development of the 5G.

After the academic seminar Chinese and Armenian scholars agreed to strengthen cooperation between the Armenian Foundation “China-Eurasia” Council for Political and Strategic Research and the Chinese Academy of Social Sciences, to conduct joint research and make recommendations for the development of Armenian-Chinese relations.

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