The Concept of Transformation of the Retail Electricity Market in the Context of Digital Transformation of the Industry

Abstract

The market model of the Russian power industry that currently exists is facing trends and challenges, such as rising electricity prices for end-consumers, rising tariffs for power transmission services and sales mark-ups, the complexity and high cost of technological connection to power grids and capacity expansion, as well as increase in cross-subsidisation.At the same time, the energy industry is influenced by external factors caused by a number of technological changes that have matured in Russia and in the world, such as the transition from electric energy production at large power plants to the use of distributed generators (including those using renewable energy sources (RES), an increase in the final price on electricity due to growth in demand, as well as the transformation of the spread and reduction in the cost of generator techniques with the use of renewable energy sources, technologies for energy storage systems, as well as the development of smart metering systems.In turn, cutting-edge technologies of the electric power industry not only lead to positive economic effects when implemented separately, they reveal the fullest range of effects and lead to the emergence of new models of interaction in the retail market if their interaction is coordinated by Industry 4.0 digital technologies. Thus, the combined influence of digital transition technologies in the electric power industry forms the prerequisites for the emergence of a new type of consumer of electric power – an active consumer.The purpose of this study is to analyse the factors influencing the adoption of these technologies by retail market entities and the effectiveness of their implementation, as well as the formation of a target retail market concept that takes into account the introduction of active consumers and has the potential to create direct and indirect economic effects for energy industry entities.