Russia Close to Choosing Long-Term Power Capacity Market Model

Russia is “close” to finalizing a model for the long-term electricity capacity market, which would allow power generation companies to recoup the costs of building new plants.

“The views of all the parties involved have been reflected in the new draft document,” Nikita Litvinov, a spokesman for the Market Council, a Moscow-based industry watchdog, said by phone today.

Market Council members, which include 288 companies buying, selling, producing and transmitting electricity, met to discuss the draft document today, the watchdog said in an e-mailed statement.

The government seeks to set up rules for a long-term capacity market, which would operate from 2011, by the end of this year. Utilities working in Russia, including Italy’s Enel SpA (ENEL) and Germany’s E.ON AG, have said the lack of a capacity market is the biggest block to building power plants after the state stops setting the electricity tariff in 2011.

To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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