Influence of the pricing policy in the Russian power industry on the gross domestic product (GDP) dynamics

Abstract

Results of implementing any pricing policy in the Russian power industry have a direct effect on the economic effectiveness of all sectors of the national economy due to the use of electric power for any activity or manufacture of any product. Intersectoral relations existing in the economy intensify and multiply the influence of the price factor in the power industry: price changes have an impact on the expenses of sectors both directly and indirectly. For example, the purchase cost of raw materials produced by energy-intensive sectors greatly influences the manufacturing cost of their own products. Since the amount of the gross domestic product (GDP) (the constituents of which are salary fund, taxes, the gross profit of sectors of the national economy) is an integral indicator of economic activities of the national economy, this article analyzes the influence of the pricing policy in the power industry on the basic national GDP indicators and represents solutions to two most critical issues in the Russian power industry: when marginal electricity prices decrease in the day-ahead market of the wholesale electricity and capacity market after returning to the governmental regulation of electricity rates of nuclear and hydraulic power plants, and when the cross-subsidization system in the Russian power industry is liquidated.