The Russian Heat Supply: Problems and Solutions

In Russia, two-thirds of the heat supply industry is located in harsh climatic conditions. This is also the most important public industry of the economy and largely determines the country's energy security. Many problems have accumulated during the reform of the heat supply industry, which are connected with the technological, organizational, and economic problems of the electricity industry. This is primarily due to the lack of mechanisms to manage the industry's functions and development. The target model of the thermal energy market adopted by the Russian government has not eliminated these problems but further aggravates the situation. To change the current situation, it is necessary to organizationally transform the retail electricity and thermal energy markets, change the relationship between the suppliers and consumers of thermal energy, introduce a tariff-based system founded on market principles, and implement the use of new technologies. This will ensure technological transformation and improve the reliability and availability of the heat supply. To achieve this will require the development and adoption of the appropriate legislative and regulatory measures.