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Economic Analysis: Theory and Practice
 

Power grids: Is it possible to compete with a natural monopoly?

Vol. 23, Iss. 7, JULY 2024

Received: 16 May 2024

Received in revised form: 30 May 2024

Accepted: 14 June 2024

Available online: 30 July 2024

Subject Heading: ANALYSIS OF COMPETITIVE ABILITY

JEL Classification: G30

Pages: 1317–1336

https://doi.org/10.24891/ea.23.7.1317

Yakov P. FEDOROV Financial University under Government of Russian Federation, Moscow, Russian Federation
yacov@list.ru

https://orcid.org/0000-0001-5780-0533

Subject. The article addresses financial and economic conditions and prerequisites for integration processes in the electric grid industry.
Objectives. The purpose is to reveal the financial and economic conditions and causes of integration processes in the Russian electric grid industry.
Methods. The study draws on empirical and logical constructions, analysis and synthesis, generalization, systems approach, and methods of comparative analysis.
Results. The paper identified the main financial, economic, organizational and legal aspects of integration processes in the industry. The most typical problems typical of the industry are revealed within the framework of the financial and economic analysis of the largest electric grid companies in the country.
Conclusions. The key trend in the development of the power grid industry is aimed at eliminating small companies and consolidating the industry by tightening regulatory requirements for territorial grid companies. Disadvantages of small companies include insufficient experienced staff, lack of funds for repairs and investments. Large companies are criticized for sluggishness and excessive bureaucracy, lack of motivation to reduce costs, inflated purchase prices. However, financial indicators indicate the competitiveness of small companies compared to large ones, and the competition, of course, cannot but positively affect both the quality of services and prices. Therefore, maintaining a competitive environment in the electric grid sector is a basic condition for the development of the industry, increasing customer satisfaction, and reducing price pressure.

Keywords: electric grid company, tariff, electric power transmission service, boiler holder

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