'Organisation for Economic Co-Operation and Development (OECD)'
Abstract
Russia in 2003 embarked on the restructuring of its electricity sector. The reform is intended to
introduce competition into electricity production and supply, leaving dispatch, transmission and
distribution as regulated natural monopolies with non-discriminatory third-party access to the networks.
The ultimate aim of the reform is to create conditions that will encourage both investment in new capacity
and greater efficiency of both production and consumption. The overall approach embodied in the reform
is promising. However, there remains a serious risk that its aims could be subverted by special-interest
lobbying during the lengthy implementation phase. If the reform is to succeed, the marketised segments of
the sector must be characterised by real competition based on economically meaningful prices. There are
two dangers here. The first is that private-sector interests will secure strategic holdings that allow them to
exercise market power or even local monopoly power. The second is that, even after the wholesale market
is liberalised, the state will retain considerable capacity to hold down electricity prices, if it so chooses, and it could do so in ways that unduly distort the signals the market is sending and deter the very investment
that the reform is meant to attract
Is data on this page outdated, violates copyrights or anything else? Report the problem now and we will take corresponding actions after reviewing your request.