Inclusive Model of Common Electricity Markets: The ‘Greater Eurasia’ Concept

Global challenges in the energy sector are associated with innovations and underpin the development of economic feasible and environmentally friendly large-scale energy systems. Geopolitical trends and local socio-economic dynamics depend upon emerging trans-continental energy routes. The involvement in these kind of integration processes could potentially make a solid contribution to the national well-being and is therefore supported by national authorities. One way of achieving this target is to undertake institutional transformations. The development of regional energy infrastructure and the enhancement of cross-border trade mechanisms play a positive role in these changes. The strategic objectives of Russia include strengthening of the regional reintegration. Russia plays the central role in the Eurasia due to unique geographical position, exceptional experience in management of large-scale energy systems, diversified infrastructure, high resource and scientific potential. The development of cross-border electricity interconnections in synchronous zones is a key to mobilization of regional economic resources. Gradual integration of electricity markets is the core problem of this article. It is widely considered that the transformation passes through four stages. The proposed model is based on preconditions and current national market structures. The development of basic cross-border trade mechanisms is the initial part of phase I that dwells upon the approximation of tax and pricing policies and measures in respect of norms and standards. The next steps (phase II) should encompass the enhancement of multilateral cooperation by the implementation of unified segments: cross-border bilateral trade and spot markets. It is also inevitable to establish the framework guidelines and network codes. The fundamental tasks of Phase III are mentioned under: unbundling energy suppliers from network operators, strengthening the independence of regulators, unification of construction procedures, provision of non-discriminative access to infrastructure, safeguarding the right to chose a supplier and liberalization of cross-border activities. On the final stage (phase IV) it is proposed to create a common derivative market and optimize fuel and energy balance.

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