‘I left consulting because I wanted to work with physical matter’

This September, Rosatom announced that Russia would have its own gigafactory – a lithium-ion battery plant based at the Baltic Nuclear Power Plant. The project is run by the Rosatom subsidiary RENERA, whose CEO is HSE ICEF bachelor’s degree graduate Emin Askerov. In this interview with Success Builder, Mr. Askerov explained what it’s like to be one of the first ICEF graduates, how Rosatom is going green and why the transition to electric transportation is inevitable.

You were in the first ICEF graduating class. Wasn’t it risky applying to a brand new programme?

I studied at an international high school in Brighton as preparation for admission to a British university, and specifically, to the LSE (London School of Economics – Ed.). After taking the standard exams, I was accepted by five universities, but not by LSE. Then a friend told me that a joint HSE-LSE programme had appeared in Russia and I decided to enroll. I took preparatory courses over the summer and was admitted in September. My parents supported me in this: it had been their idea that I get an international education, but I chose the university myself. Studying in Russia also helped our family budget because it’s less expensive than living and studying in London.

In your experience, what is the difference between HSE and Western universities?

When I began classes here, I didn’t notice anything unusual. My previous three years of study had been in pretty much the same format. I think it was easier for me than for many students: I was familiar with the approach, took the academic requirements seriously and appreciated the teachers’ trust in the students. Most students hadn’t dealt with essays before, but I had become quite good at them back in London. In England, the most prevalent form of education is independent study in which you actually do mini-research, but in most educational institutions in Russia, students simply cram for exams.

People from foreign universities and outstanding Russian scholars taught at ICEF and classes were conducted entirely in English. I was surprised at the level not only of special subjects such as mathematics, statistics, etc., but also the humanities because, in the international system, they are inseparable from economics.

Of course, it was easier for me than most thanks to my fluent English. In addition, I had taken an advanced course in economics while still in England, so the first year at ICEF seemed easy to me. On the other hand, unlike those who had studied in Russia, I had problems in math that I had to make up for with some difficulty.

Why didn’t you go into banking after graduation?

Like all my classmates, I was focused on banks, studied them and looked for internships. However, during my upper-level courses at ICEF, I completed an internship at one of the international banks and never went back. Everything was fine there, but I already wanted to work in the stock markets, and not just be a clerk, and I spent a long time looking for something suitable.

Russian employers were not really sure how to react to my international diploma, despite the prestige associated with it, and were more interested in my experience than in the reputation of my university. It was 2001 and the market had not yet recovered from the crisis and applicants in the field of finance were not exactly in high demand. I know very well how difficult it was for the students from the first graduating class to get jobs, how much work it took many of them to become successful and with what incredible efforts they paved the way into the industry for subsequent ICEF students and graduates.

How did you end up working in the energy field?

I got into it almost immediately because my first job was with the S&P consulting company where I worked on a corporate governance audit project at Lenenergo. After that, I went to work for the Institute of Urban Economics Foundation that dealt with municipal management, public utilities, etc. For almost seven years, I worked there on issues concerning the economics of energy consumption in housing and communal services. On the job I had to learn what a power grid is, how sewage drains are cleaned, how heating supply systems work and also figure out how other things work in this field.

The Institute for Urban Economics is a research organisation that advises the government and municipalities on attracting investments and relationships with banks. My department consulted on tariff regulations of natural monopolies and, as an economist, I found our job duties to be clear and interesting. I plunged into the specifics of regulatory norms and legislative issues in general. The jurisprudence that we studied for a year at ICEF and the philosophy came in handy. In all other areas, the specialised knowledge I gained at ICEF in the theory of the firm, natural monopolies, transaction costs and financial models fit the tasks almost perfectly.

Are there many specialists in state organisations with an education in finance and economics?

I’m afraid not. There’s a great need for people with an education in economics and with an understanding of various social phenomena. Financial experts deal more with trading options and futures and making decisions at the level of the firm. When you work for the government as a regulator, an understanding of micro- and macroeconomics is much more important than knowing how to use the tools of the banking system. I have done a lot of consulting work for the state and know how much it requires a global vision of both geopolitical and economic processes, as well as knowledge of how the world works in general. There is now a critical shortage of people working for government agencies who have this type of mindset and professional skill set. We deal with this deficit regularly when examining programmes that are not being implemented or that are already in place in various areas of the economy.

Why do economics programmes devote so little attention to philosophy when it is directly connected to understanding the phenomena of social consciousness and behaviour?

This is more a shortcoming of Russian programmes. Western universities, and especially those focused on the liberal arts place a very strong emphasis on the humanities component of economics programmes.

It develops your ability to reflect on different topics, look at ideas from different perspectives, find and correct inconsistencies in logic and convince others that you are right. Philosophy provides the tools to analyse any decision clearly, which is similar to how we use models to test hypotheses in economics.

After earning my bachelor’s, I thought about getting a master’s at LSE, but I started a family and my goals changed a bit. The most demanding of the entry requirements was a strong knowledge of philosophy, so it would be very difficult from someone who had not studied at an international university to get in. One of the most outstanding foreign teachers at ICEF was Amos Witztum, a philosophy professor who explained economics to us without ever glancing at a textbook. Professor Witztum’s mind perfectly grasped the logic of how the world works, along with the rationale for its paradoxes.

Why did you decide to become an entrepreneur? Was that a valuable experience?

After the 2008 crisis, I saw an opportunity to open my own business. This was when the strong interest in investing in infrastructure began. By that time, I already had a lot of experience in regulating communal infrastructure, I had participated in the drafting of laws and methods, I knew everyone in the ministries and I had traveled to many cities in Russia. I opened a company, hired a few people and started working: we did consulting for private companies that wanted to invest in public utilities, helped them draw up contracts, calculate models and communicate with municipalities. It was an interesting time; our staff grew and we had a lot of interesting things on our plate. The experience was invaluable; it’s a shame that we earned almost nothing from it. The last contract we worked on led me to Rosatom.

For one of the company’s contractors, we analysed the investment programme of a thermal power plant where, as usual, there were a lot of problems, to which we found some interesting solutions. We got together with the contractor to offer Rosatom the idea of an in-house startup and we wrote up a business plan that was eventually approved by Kiriyenko (former Rosatom CEO Sergey Kiriyenko – Ed.) As a result, we were given a six-month contract. My job title fell from CEO to analyst, but the project fully justified itself: after six months, I became the company’s director of development. When people tell me they are afraid of listing a position in their résumé that is lower than their previous one, I just laugh in their face knowing that this is plain nonsense if you have a goal.

Rosatom is a sprawling nuclear giant that is incomprehensible to the average person. How does the company work and what makes it remarkable?

I’ll start with the pros. This is one of those state-owned companies in Russia where something is actually happening and that is actually developing in some way – and not only in its own industry. Rosatom is also actively getting into other industries, and not with pie-in-the-sky predictions about what might happen there, but by implementing fresh ideas. All of the projects that I worked on at the company prove that you really can do something new there. For example, now Rosatom also produces composite materials, energy storage devices and catalytic converters for use in KAMAZ trucks. It has projects in the medical field, 3D printing and petrochemicals – things in which you would never think that the largest state corporation would be interested.

Now the cons. It is difficult to do all these things because it is a terribly bureaucratic structure. When I speak to colleagues from other state corporations they say, ‘You can at least accomplish something at Rosatom, but here it’s impossible’. You implement your ideas not thanks to the company culture, but in spite of it. Rosatom is huge and so, naturally, every step is accompanied by dozens of forms. And if you have talks with foreign partners, you have to draw up terms of reference and coordinate it with the security service.

You hire additional specialists to deal with bureaucratic requirements and, eventually, you get something done. Of course, such a system does not have the best effect on your efficiency, but this is the ‘Zen of the state’ that you just have to accept.

Is it possible to make Russian state corporations more efficient?

I don’t think so. In his bestselling book The Innovator’s Dilemma, renowned economist Clayton Christensen argues that a company’s behaviour is dictated by its client. In the case of Rosatom, the main client is the state, which is also the main shareholder. All processes are carried out to satisfy this client and shareholder. Therefore, from this point of view, Rosatom is undoubtedly focused on its main client. At the same time, Rosatom is working on its image and positioning itself as a company open to innovation. This is particularly noticeable when you wear a sweater and jeans to a meeting with Gazprom representatives who sit stone-faced and dressed in white shirts and blue ties.

You’re been with the RENERA project since 2019. What is this structure within Rosatom?

This is already my third successful startup within Rosatom. It actually continues work in the electric power industry that was already underway. There were plans as far back as 2011 to produce energy storage devices – namely, lithium-ion batteries – and only now have I managed to develop this area fairly effectively in the context of the new environmental agenda.

Startups are in full swing at Rosatom. If you know the technologies and the market well and have the skills to work with state regulators and contractors, there’s a very good chance you will see your idea come to fruition. On the other hand, as I’ve already said, everything is not so simple. Once, a company employee left after two months because he wasn’t given a computer. You have to obtain a dozen approvals just to get a workspace in the office, and not everyone is up for this. This is a very important thing to understand in working for certain types of institutions.

Why do you think the trend for lithium-ion batteries is interesting for Russia?

Russia can’t divorce itself from global environmental issues. The world is changing. China, Europe and the U.S. have unanimously declared their readiness to abandon the internal combustion engine and the only alternative currently available is electric cars powered by lithium-ion batteries.

It is this combination of price, quality and energy intensity per hour that makes the large-scale introduction of the electric motor possible. The fact is that lithium-ion is flexible and versatile enough that you can use an electric vehicle battery to, for example, compensate for the shifting cost of energy from the power grid. It not only charges while it is connected, but also performs many additional functions. Today, our portfolio company Enertech International supplies batteries for the Aurus hybrid car, and we use the same batteries at the plant in Podolsk, making it possible to save electricity: at peak electrical demand and expense, the plant draws power not from the grid, but from the batteries.

What results did you achieve in this area in 2021?

We have already done the most important thing – we acquired a technology that was not available in Russia. We bought a Korean company that had been producing lithium-ion batteries for 20 years and, in 2025 we will launch our own battery production at the Baltic Nuclear Power Plant site in the Kaliningrad region. By the time the state raised the question of clean transport, Russia already had the technology for producing batteries and all the means for its further development. Now, of course, we are in a crisis year for all manufacturers that rely on the semiconductors needed to make chips for controlling the batteries. But this is a temporary difficulty that we will get through.

Could your production facility also be called a gigafactory like the Tesla car battery production plant?

The term ‘gigafactory’ existed earlier; Tesla just popularised it. The gigafactory is manufacturing batteries with a capacity of more than 1 gigawatt-hour per year. The use of lithium-ion batteries is quite new. In 2001, maximum production capacity was 2 gigawatt-hours and the batteries were mainly used in laptops and mobile phones. Production has now reached 300 gigawatt-hours and the figure will grow to 2 terawatt-hours because electric vehicles are the main consumer of this capacity.

The European Union has already instituted restrictions on entering this or that city in a vehicle that does not meet EU emission standards. At the state level in Russia, we are also discussing standards and requirements that stimulate the development of new programmes, but this is not an easy task because of the domestic oil and gas lobby.

How is Rosatom changing in response to environmental trends?

Rosatom is probably riding this wave more successfully than any other state-owned company. For example, two years ago we already had a director for sustainable development. Atomenergoprom has already issued green bonds. The Atomenergopromsbyt company now sells kilowatt-hours from our wind turbines and we at RENERA made the first Russian series of electric go-karts and held races for children. And last year, the company adopted the UN Sustainable Development Goals as the main criterion for production and logistics.

Rosatom is currently promoting the concept of the ‘green square’ – that is, four main sources of energy: wind, sun, water and the atom – including at the level of environmental education and information campaigns. We are currently launching a project to measure our carbon footprint in order to then develop a plan to reduce, and ideally, eliminate it entirely.

Why are careers in government agencies unpopular among students of economic universities?

Because the pay is low. To go work as a government official, you need to have a specific goal – for example, to become a politician or to carry out a particular mission for yourself and for society. Otherwise, it simply doesn’t make sense for a recent graduate to work for a salary that is several times lower than what he earned as an intern. I left consulting at one point because I wanted to work with physical matter, to see the results of my work and to make a personal contribution to a cause of some sort. I can say that I have already played a role in the creation of two industries – wind energy and lithium-ion batteries. I recently drove with my children past the Kochubeevskaya Wind Farm. It’s great knowing that this landscape wouldn’t have changed without you. That’s worth any bonus you might get from IB or consulting.