Price Formation Criteria for Electricity Supply Companies in the Conditions of Market Liberalization

Abstract

The main goal of the research is to determine and analyze the criteria for the formation of electricity prices for generating enterprises using a systemic approach to evaluate the impact of the set specified criteria as a holistic system. An analysis of the influence of exchange, regulatory, technical and technological and other criteria and factors on price formation for energy industry enterprises was carried out. It is indicated that the offer of prices for electric energy on the stock exchange is formed by three components: marginal costs, "no-load" costs and "loading" costs. It is established that the opportunity given to the consumer to influence the price of electricity independently is an important criterion for the formation of the price of electricity in the conditions of market liberalisation, and the mechanism of implementation of this criterion is detailed. The existence of both a positive and a negative impact of excessive market regulation by the introduction of the procedure "imposing special obligation" on energy industry enterprises is indicated. The main factors influencing the "cost of the supplier's services" criterion are established and analyzed. The conclusion that the criteria for the formation of the electricity price should represent a coordinated system that realizes the principle of compatibility of incentives for all parties that form a balance of interests - both producers and consumers is a scientific novelty. In addition to the principle of the compatibility of incentives, other principles which must be met by the criteria for the formation of the electricity price were also named for the first time. In order to introduce a systematic approach to analysis, a model of electricity price formation in conditions of market liberalization has been proposed for the first time. The advantage of this model lies in the fact that it allows not only for assessing the impact of the identified criteria on the electricity price but also to forecast this price for future periods.