ISSN (print) - 0131-7652

ISSN (online) - 2686-7605

Vol. 50 No. 10 (2020)
ASPECTS OF REAL ECONOMY

Market Power Evidence from Electricity Market of Russian Federation

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  • N. Ayzenberg,
  • S. Dzyuba
N. Ayzenberg
Melentiev Energy Systems Institute, SB RAS, Irkutsk
Bio
S. Dzyuba
Irkutsk National Research Technical University; Far Eastern Federal University
Bio
DOI: https://doi.org/10.30680/ECO0131-7652-2020-10-102-126

Published 2020-10-02

Keywords

  • electric utility industry,
  • market power,
  • generating companies,
  • fuel costs component,
  • electricity market of Russia

How to Cite

1.
Ayzenberg Н, Dzyuba С. Market Power Evidence from Electricity Market of Russian Federation. ECO [Internet]. 2020 Oct. 2 [cited 2024 Nov. 16];50(10):102-26. Available from: https://ecotrends.ru/index.php/eco/article/view/4130

Abstract

The electricity market is objectively oligopolistic. A theoretical view of the problem suggests that the market power of companies the higher, the bigger are players on the market. After completion of the energy reform in Russia, the electric utility industry moved towards consolidation of companies’ structure. This paper examines the structure of generating companies established by 2013 in terms of their market power. This refers to the ability of companies to raise electricity prices higher than adequate compensation for rising of fuel prices. To solve the problem, we used the company classification method by specific dynamics of certain indicators (pattern). We identified four patterns that specify companies by manifested strength of their market power and effectiveness of cost management. Our research included generating companies with fossil fuel capacities (approximately 55% of annual output). The results show that market power is inherent in most of these generating companies, covering more than half of the Russian electricity market. However, there is no clear link between market power and company size. We saw that market power is weaker in the electricity market segment and significantly stronger in the capacity and heat market segments.
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