Abstract
Energy supply reliability problems are looked at in view of a mega breakdown in the energy grid of Central Russia, which occurred on May 25, 2005, and the energy reform underway in Russia. The splitting of RAO Unified Energy Systems of Russia (UES) into multiple independent companies, as stipulated by the current energy reform, lowers the reliability of energy supply and increases the risk of systemic energy breakdowns, as we noted in [1]. The roles of monopoly, oligopoly, monopolistic competition, and government regulation in the electric power industry are analyzed. The American economist and 2001 Nobel Prizewinner Joseph E. Stiglitz demonstrated the need for government intervention for market regulation, because there is no perfect competition in a real-life market economy, and the market under asymmetric information conditions does bring the economy to an equilibrium state, maximizing public wellbeing. The implications of establishing six whole-sale generating companies from thermoelectric power stations for the growth of electricity tariffs and possible bankruptcy of some companies are also estimated.
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Original Russian Text © A.I. Kuzovkin, 2006.
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Kuzovkin, A.I. The energy crisis and energy reform in Russia: Competition instead of reliability. Stud. Russ. Econ. Dev. 17, 169–181 (2006). https://doi.org/10.1134/S1075700706020055
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DOI: https://doi.org/10.1134/S1075700706020055