Assessment of the Territorial Energy Security in the Context of Energy Systems Integration

Abstract

Our paper tackles the timely and highly-debated issue of assessment of the level of energy security for Russia’s territorial entities. Our analysis is carried out from the perspective of economic and management threats to reliable power supply for consumers caused by the process of integration of energy systems and the expansion of market regulation mechanisms. In particular, we focus on the creation and integration of energy systems using a case study of the remote territorial entity represented by Russia’s Far Eastern region that present a topic of special interest with respect to the subject and the scope of this research. We define and build the methods that might be used for determining the economically justified level of energy security under the market economy conditions based on ensuring a balance of interests between territorial government bodies and territorial generating companies in the process of forming a strategy for the development of a territorial energy system. Our results clearly demonstrate that current electricity tariffs and prices for the end consumers at the remote territorial entities, such as the Russian Far Eastern region, pose a threat to energy security since they are underestimated due to social and political concerns and often lead to unprofitable power generation. We argue that political consideration aside, energy systems creation and integration should be made viable and sustainable not only in Russia, but also in other countries. Our outcomes show that a more reasonable energy tariff policy might be appropriate when relevant stakeholders and policy-makers attempt to create conditions for the advanced development of remote industrial areas.