Cross-Subsidization in Power Engineering

Abstract

The study is devoted to the issues of power price differentials for different groups of consumers. The factors have been identified to make a choice of the consumers’ groups in whose favour energy cost could be reduced. The set of the factors varies with regard to the government’s objectives: protection of vulnerable social consumers’ groups, or encouragement of economic growth through industrial development. The relation between the energy cost quoted for different consumers’ groups and national measures has been supported by statistical analysis.

Cross-Subsidization in Power Engineering

“…This approach is the most frequently applied in the area of price setting by the natural monopolies branches, due to the fact that this form of organization appears to be quite sustainable in markets of definite types, for e.g. in the fields of power engineering, water and gas supply, and railway transport [3].…”