State Patronage on Heat and Electricity Markets of the Russian Far East

Economic Research Institute of Far Eastern Branch of the Russian Academy of Sciences, Khabarovsk, Russia

^* Corresponding author: demina@ecrin.ru

Abstract

The paper examines the conditions and goals of state patronage on heat and electricity markets of the Russian Far East. The distinct characteristic of market organization in the region is the lack of a unified energy system, high share of districts with decentralized energy supply, and segmentation of the electricity market. Based on the technological and institutional similarities, scale and form of state patronage, three zones of electricity market were established: market, semi-market, and regulated. The forms of state patronage on heat and electricity markets of the Far East are the following: state regulation of heat and electricity tariffs, setting the tariffs below actual costs, subsidies for providers and consumers of energy, state-sponsored construction of energy capacities. The paper evaluated the scale of patronage on heat and electricity markets and reached the conclusion that without state patronage the Far Eastern consumers of heat and electricity will not be able to purchase energy in market conditions.