Methodological approach for harmonization of the investment and pricing policy options in the electric power industry

The article presents the methodological approach to the substantiation of the pricing policy parameters required for the stable development of the power industry in the long run. For this purpose, a multi-level system of financial models is developed and used to forecast the changes in the financial health of the whole electric power industry, its main technological sectors and separate generating and grid companies under given investment plans, regulatory policy scenarios and types of the electricity market structure. The rational hierarchy of modeling tasks is specified in the article, according to different levels of the investment planning (from industry to project level). The proposed integrated approach to the substantiation of the pricing decisions in the areas of competitive market or tariff regulation ensures the assessment of their consequences (“direct” problem) as well as the estimation of target price levels of electricity and heat generation or grid services based on the revenue requirement calculations (“reverse” problem). Being developed for the electric power industry, this integrated approach can be applied for the most of energy industries and markets.