Electricity markets in Russia, the US, and Europe

An in-depth analysis of the restructuring processes in individual market areas requires knowledge of the initial physical and organizational state of the electricity markets. The differences in these initial states lead to a significant divergence in the restructuring processes between the different market areas. There are general textbook models for electricity market restructuring; however, more specific tools are required for a detailed analysis of the divergent market structures and restructuring mechanisms in individual market areas. To illustrate the differences in the restructuring processes, this paper provides a review of four different electricity markets; the introduced electricity markets include Russia, the Nordic countries, the France-the Netherlands-Belgium interconnection (known as the Trilateral Market Coupling area, TLC), and the Pennsylvania-New Jersey-Maryland interconnection (PJM). The Nordic countries and the TLC represent two different European market structures. Russia and the PJM market area in the US, on the other hand, are examples of different approaches in terms of pricing models and market structures compared with the ones commonly applied in Europe. In this paper, the development paths of the electricity markets in these target areas are analyzed taking into account the initial situation in each of these areas.