FAS PROPOSES TO CONSIDER THE POSSIBILITY OF SUBSIDIZING TRANSPORTATION OF COAL AND FUEL OIL TO REDUCE THE COST OF ELECTRICITY IN THE FAR EAST

Similar mechanism was used in gasoline and diesel fuel markets in 2022

During the session "Electric Power Industry of the Far East: Expansion of the Competitive Pricing Zone and Integration with the UES of Russia" at the Eastern Economic Forum, the main issues were the pricing and the development of competition in the electricity market.

FAS Russia notes that the existing price surcharge for the first and second price-based energy zones restrains the increase in the cost of electricity for some territories of the Far Eastern Federal District.

As a proposal to ensure a competitive and affordable price in the Far East, FAS Russia suggests to consider subsidizing the transportation of coal and fuel oil, from which electricity is generated. This mechanism has already been used in the oil products market this year. Another way is to carry out gasification if technically feasible.

FAS Russia believes that one of the measures to attract investment and develop competition in the Far East is the adoption of a "roadmap", the draft of which has already been developed by the Ministry of Energy of Russia.

Besides, it is worth creating incentives in the form of long-term market pricing for the construction of new facilities. In this case, it is necessary to carry out model calculations and make them public for possible assessment. Thus, consumers and market participants will see how the state plans to develop competition in the electric power industry in the Far East.

At the same time, the protection of the population is an important issue. FAS Russia emphasizes that the existing measures to protect citizens will not go away because of potential market pricing and will stay the same – the definition of the limits of the cost of electricity for end consumers and the index of citizens' fees.