Abstract
The wholesale electricity and capacity market constitute the backbone of the Russian power industry. It is in this market that large suppliers and buyers operate, and its entire turnover is consequently transmitted to the retail market. Our paper presents a theoretical overview of the main tools for forming the cost of electricity and capacity in the wholesale market in Russia (depending on the regional affiliation), the type of end users, and the degree of state participation. We consider the specifics of the formation of the cost of electricity and capacity in the price and non-price wholesale markets of Russia, which differ in territorial, climatic, and economic characteristics, as well as the established structure of generation. In the empirical part of the paper, we carry out a structural analysis of the volumes of trade in electricity and capacity in the price and non-price zones of the market. Furthermore, we explain the reasons for the current dynamics of prices in the wholesale market. Using the obtained results, we calculate the maximum annual effect of the solar power plant operation in various zones of the Russian wholesale market, as well as in the retail market. In addition, we estimate the economic incentive for the transition of the functioning of power facilities from the wholesale to the retail market. Our results can be of considerable practical importance and might be used for improving the strategy for the development of the electric power industry at the regional level both in Russia and in the other countries.
Highlights
Much attention is paid to the transition towards a greener economy in various countries
Our comprehensive study of the wholesale electricity and capacity market in Russia has shown that its pricing depends on many factors
These include the type of goods sold, belonging to a certain zone of the wholesale electricity and capacity market which differs in climatic and economic characteristics, current and future structures of generating capacities, as well as the employed trading instruments
Summary
Much attention is paid to the transition towards a greener economy in various countries. There is one country that is rarely associated with the transition to a green economy and renewable energy in the academic literature, both due to the structure of its energy market and its energy export; this country is the Russian Federation. This is a pity because (as Strielkowski et al [5] demonstrate) Russia has recently embarked on a path towards the modernization of its energy systems as well as the promotion of decarbonization and various energy-saving initiatives. As Lisin et al [6]
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