Russian Power Sector Reform:
Lessons For Developing Countries
Author(s)
L. D. Gitelman
Abstract
The article takes a look at the issues of the market-oriented power sector reform
and the experience that is of interest in the process of reforms in any country.
Organizational models might, however, vary quite substantially in different
countries in terms of basic characteristics.
The article studies the difference between idealistic notions that underlie the
existing market model and real economic relations that are directly connected to
the technological features of the industry. It validates proposals for alternative
energy market models and a management mechanism for the industry.
Keywords: power sector reform, energy market, electricity prices.
1 Introduction
Over the past ten years, profound market transformations have been
accomplished in Russia's electric power sector. A complex energy market
infrastructure has been created; vertically integrated utilities have been
unbundled and new joint-stock companies have been established in various areas
of business; a whole cluster of market-oriented professionals has emerged.
Nevertheless, the changes in the industry have not been supported by the public.
Analysis shows that a number of serious mistakes were made when
implementing the transformations.
The qualitative characteristics of the macroeconomic environment that the
industry exists in were ignored. The environment has so far been extremely
ineffective; it is determined by a very bad investment climate and an
underdeveloped finance and credit system; a considerable impact of external
factors on electricity prices; the low capacity of mass market consumers to pay;
Energy Production and Management in the 21st Century, Vol. 1 19
www.witpress.com, ISSN 1743-3541 (on-line)
WIT Transactions on Ecology and The Environment, Vol 190, © 2014 WIT Press
doi:
Keywords
power sector reform, energy market, electricity prices.
Related Book
Other papers in this volume
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