Electricity and heat markets under present-day conditions in Russia. Challenges for their operation and prospects for their development.

The paper presents an analysis of the twenty years' results of restructuring (which is still ongoing) the electric power industry in Russia from the perspective of systems studies. It indicates that most of the reform goals focusing on significant enhancement of the industry efficiency based on market relations have not been achieved. This failure was due to the lack of a comprehensive rationale for adopted lines of the reform, the absence of systems analysis, and no assessment of the consequences of implementing the Western electricity market models in the context of Russia. Wholesale and retail markets for electricity and heat have been created but formally and without full-fledged competition. The inflow of investment in the energy sector was insufficient. The study shows that advanced technologies are currently adopted in Russia's power industry, but necessary measures to transform market relations are not undertaken. Based on the consideration of current challenges and trends, some directions for the wholesale and retail energy markets transformation in Russia have been proposed. [ABSTRACT FROM AUTHOR]