Oil- and gas-producing countries could strengthen their economies by accelerating domestic renewable energy deployment while maintaining fossil fuel exports, according to LUT University professor Christian Breyer. In an interview with pv magazine, he pointed to Norway as an example of how electrification can maximize the economic value of fossil fuel resources, while arguing that Russia’s political choices are preventing it from exploiting similar opportunities.
Expanding renewable energy is not necessarily at odds with the economic interests of countries that depend heavily on oil and gas exports. On the contrary, replacing fossil fuels in domestic energy consumption with renewable electricity could allow these countries to increase export revenues while developing cleaner and more efficient energy systems at home.
These are the findings of a new study conducted by researchers at LUT University in Finland, who identified Norway as a particularly successful example of this approach. The country has combined substantial oil and gas production with extensive renewable electricity generation, widespread electric vehicle adoption, and increasing electrification of heating.
“The most clever oil and gas producing countries do so, see Norway,” Christian Breyer, professor for Solar Economy at Finland’s LUT University, told pv magazine, referring to investments in renewable energy and electrification.
He explained that reducing domestic fossil fuel consumption allows exporting countries to retain more of their oil and gas production for international markets. At the same time, electrification can improve the efficiency of domestic energy use and reduce emissions. “This allows them to export more fossil fuels whereas domestically they have a highly efficient and clean energy system,” he said, describing the strategy as economically advantageous.
However, Breyer argued that Norway remains an exception rather than the rule. Many fossil fuel exporters have yet to fully exploit the economic opportunities associated with their energy resources, particularly when it comes to developing renewable electricity generation and electrifying domestic demand.
The development of renewable energy in fossil fuel-exporting economies does not necessarily send contradictory signals to importing countries, according to Breyer. He noted that several Middle Eastern countries have begun investing in large-scale solar PV projects without undermining their oil and gas export businesses.
In his view, the continued demand for fossil fuels is largely independent of whether producing countries accelerate their own energy transitions. He compared fossil fuel dependence to other forms of addiction, arguing that consumers may continue purchasing products despite being aware of their long-term economic and environmental costs.
The situation in Russia presents a markedly different picture. Although the country has developed some solar and wind power capacity, renewable energy deployment has remained relatively limited compared with its resource potential. The expansion of the sector has also stalled since Russia’s full-scale invasion of Ukraine in 2022.
Breyer suggested that Russia could, in principle, benefit from the same strategy pursued by Norway and increasingly considered by other fossil fuel-producing economies, including countries in the Middle East, the United States, and Canada.
Such a transition could reduce domestic fossil fuel consumption and create additional economic value from the country’s energy resources. Greater deployment of distributed renewable energy systems could also contribute to electricity supply diversification and, with appropriate grid design and storage, improve resilience against disruptions.
However, Breyer sees the main obstacles as political rather than technological or economic. He is skeptical that international sanctions or Russia’s increasing technological dependence on China would, by themselves, fundamentally change the country’s renewable energy prospects. Instead, he argued that progress would depend on policy decisions prioritizing long-term national economic interests.
“It would require clever policy making to the advantage of the country and its people,” he said.
Breyer was particularly critical of the economic and human consequences of Russia’s invasion of Ukraine, arguing that the destruction of economic value, loss of life, and damage to the country’s international reputation illustrate the consequences of political decisions that run counter to long-term national interests.
“Rational advantageous choice are often not considered if irrational ruling is prevailing,” he said.
For Breyer, the contrast between Norway and Russia illustrates a broader challenge facing fossil fuel-exporting countries. Their resource wealth provides an opportunity to finance renewable energy deployment, electrify domestic energy systems, and improve economic efficiency. Whether that opportunity is realized ultimately depends on political priorities and the willingness of governments to pursue long-term economic benefits.
Breyer and his colleagues presented the results of their research in the paper “Sustainable energy transition options for Russia,” published in Energy Reports.
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