Problems of Assessing Relative Profitability of Modern Russian Electric Power Industry

The contraction in investment activity and capital reversals from the electric power industry to other energy sectors in Russia poses a potential threat to the country’s energy supply. Identifying the causes of low investment attractiveness of the electric power industry in order to justify directions of regulatory impacts relates to a comparative assessment of the industry profitability. It gives greater urgency to the development of the relevant methodological guidelines. The paper presents the study of the two mutually reinforcing methods for measuring the profitability of the Russian energy industries and comparative analysis of electric power industry and industries related to the extraction and processing of oil and gas using data from Rosstat. The authors identified the strengths and weaknesses of the two methods used. In particular, it is shown that the method for calculating macroeconomic profitability thought versatile and straightforward is sensitive to changes in the initial data generation technique and its quality. Whereas, the application of the second method based on the aggregation of data on prices and structure of intermediate consumption of enterprises is limited to industries not participating in export-import operations. Through the practical application of the abovementioned methods, the author did not find any gaps in profitability between the power industry and other energy sectors. Hence, the relatively low investment attractiveness of the power industry is mainly due to structural causes (for example, pricing; low market efficiency). Economic and statistical analysis of the current situation allows, in the authors’ opinion, to make target government actions. Moreover, adequate management is a precondition for further improvements to the methodology of profitability analysis of energy sectors, primarily, advancement towards disaggregation of the considered indicators and data availability.