Tumanyants K.A., Intykbaeva S.Zh., Tumanyants A.K. HIGH VOLTAGE ECONOMY (Book Review: Cost Recovery and Financial Viability of the Power Sector in Developing Countries [Text] / J. Huenteler, I. Dobozi, A. Balabanyan, S. Ghosh Banerjee. – Washington, DC :
DOI: https://doi.org/10.15688/jvolsu3.2019.2.15
Candidate of Sciences (Economics), Associate Professor, Department of Economic Theory, World and Regional Economy, Volgograd State University, Prosp. Universitetsky, 100, 400062 Volgograd, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it. , https://orcid.org/0000-0001-6801-2794
Saule Zh. Intykbayeva
Doctor of Sciences (Economics), Professor, Finance Department, Almaty Academy of Economy and Statistics, Zhandosova St., 59, 050035 Almaty, Republic of Kazakhstan, This email address is being protected from spambots. You need JavaScript enabled to view it. , https://orcid.org/0000-0001-7776-7072
Artemiy K. Tumanyants
Student, National Research University, Higher School of Economics, Myasnitskaya St., 20, 101000 Moscow, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it. , https://orcid.org/0000-0001-7399-7938
Abstract. The paper is dedicated to the review of “Cost Recovery and Financial Viability of the Power Sector in Developing Countries” book published by the World Bank in 2017. The authors show that Russia and Kazakhstan face a policy tradeoff between full cost coverage and financial stability in the electric power industry. Various institutional, methodological and financial obstacles on the way to creating a rational income and expense model in the power sector of both countries are analyzed. The concerns about inflation and life quality risks in case of setting the energy price at its market equilibrium level are proven inconsistent. Long-term risks of setting energy price under its full economic costs that include generation and transportation are also discussed. The reviewed publication is criticized for the lack of criteria for the economically justified and efficient cost level. Without such criteria the full cost coverage model will lower energy companies’ incentives for continuous production and transportation optimization. This issue is especially urgent in Russia and Kazakhstan because of the dominance of state ownership in the energy sector.
Key words: electric power industry, costs, revenue, profit, financial viability, tariff.
HIGH VOLTAGE ECONOMY (Book Review: Cost Recovery and Financial Viability of the Power Sector in Developing Countries [Text] / J. Huenteler, I. Dobozi, A. Balabanyan, S. Ghosh Banerjee. – Washington, DC : World Bank, 2017. – 52 p.) by Tumanyants K.A., Intykbaeva S.Zh., Tumanyants A.K. is licensed under a Creative Commons Attribution 4.0 International License.
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