Imperfection Of Electricity Markets
Keywords:perfect markets, electric power systems, microeconomics, price regulations, market models, deregulation consequences
The paper shows the imperfection (in terms of microeconomics) of markets organized in the electric power industry. This imperfection is caused by the special properties of electric power systems (EPS) that underlie the power industry. These properties, analyzed in the paper, make it impossible to create conditions for perfect competition in the electricity markets. The imperfect markets require government regulation of trade, including pricing. Deregulation of prices leads to negative consequences, which is the case in the power industry of Russia.