Industrial and institutional restructuring of the Russian electricity sector: Status and issues

The reform of the Russian electricity industry represents one of the largest and most technically complex post-Soviet era industrial restructurings. This paper presents the framework, status, and perspectives for the Russian electricity sector liberalisation. Uncertainties regarding the effective implementation of the reform are specifically examined. Ultimately the critical analysis of the reform questions the feasibility and adequacy of the recommended measures in the specific Russian context. Current theories fail to answer a fundamental issue, namely how to promote investment in an obsolete electrical infrastructure and, more generally, whether a pure free market model is compatible with physical constraints posed by the electricity sector. A careless deregulation of the Russian electricity system could hinder the country's stable and sustainable development, as its economy and the population's service have traditionally been closely linked to the electricity industry.