Deregulating electricity markets in emerging economies

Abstract

This thesis will present difficulties associated with deregulating electricity markets in emerging economies and integrating them into a single power grid. The presentation will focus on a number of former Soviet states (CIS) and the ways these countries are being integrated to a single power grid in order to increase social welfare and energy security. Although many projects have been proposed and partially implemented, there are factors that negatively affect the integration. Based on the progress of, and absences of regulations and implementations, this thesis will argue that integration into a single power grid, although good for the welfare is still too early, and might be detrimental in the short run. While viewing the underlining facts and figures concerning the potential power grid as well as countries surrounding it following topics will be covered: Need for deregulation; Overview of potential players; Challenges from financial and technological standpoints; Challenges on legislation/governmental levels, due to lack of/or over regulation by the governments; Challenges in integrating to a single grid and harmonizing markets across countries; Suggestions on the integration and deregulation. Throughout the thesis, observations will be presented and compared against the needed performance.