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Financial Stability of Electricity Companies in the Context of the Macroeconomic Instability and the COVID-19 Pandemic

Author

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  • Oksana V. Savchina

    (Department of Finance and Credit, Faculty of Economics, Peoples Friendship University of Russia (RUDN University), Moscow, Russian Federation,)

  • Dmitriy A. Pavlinov

    (Faculty of Economics, Peoples Friendship University of Russia (RUDN University), Moscow, Russian Federation,)

  • Olga V. Savchina

    (Department of Accounting, Audit and Statistics, Faculty of Economics, Peoples Friendship University of Russia (RUDN University), Moscow, Russian Federation.)

Abstract

The electricity sector is an important part of any country s economy as it holds a cross-sectoral importance and produces a socially significant product for residents and industries. Economically, the sector is less vulnerable during world crises, receiving many variations of the state support. Both world electricity consumption and electricity generation have grown steadily over 2007-2019, with China, USA, India, Russia, Japan, Canada, South Korea, Germany, Brazil and France being world market leaders. This article analyzes the current state and the main trends of the development of the electricity industry as a whole and the financial stability of its companies. The United States and Russia, with similar functioning market models, were chosen to assess. The analysis of the financial stability of PJSC Inter RAO and Exelon Corp, two electricity giants in Russia and in the United States, has shown that they demonstrate stable results: Exelon Corp is more profitable while PJSC Inter RAO is less dependent on financing from creditors. Overall, electricity companies and the industry as a whole should not suffer much from the COVID-19 pandemic: many financial support measures have been developed in both countries, helping the sector to recover to 2019 levels by 2021.

Suggested Citation

  • Oksana V. Savchina & Dmitriy A. Pavlinov & Olga V. Savchina, 2021. "Financial Stability of Electricity Companies in the Context of the Macroeconomic Instability and the COVID-19 Pandemic," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 85-98.
    • Handle: RePEc:eco:journ2:2021-05-12
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    References listed on IDEAS

    as
    1. Alexander Bass, 2018. "Does Electricity Supply Matter for Economic Growth in Russia: A Vector Error Correction Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 313-318.
    2. Ventosa, Mariano & Baillo, Alvaro & Ramos, Andres & Rivier, Michel, 2005. "Electricity market modeling trends," Energy Policy, Elsevier, vol. 33(7), pages 897-913, May.
    3. Canh Chi Hoang, 2021. "Examining The Relationship between Electricity Consumption, Financial Development and Economic Growth in ASEAN Countries: Evidence from a Bayesian Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 49-56.
    4. Evgeny A. Kuzmin & Elena E. Volkova & Alena V. Fomina, 2019. "Research on the Concentration of Companies in the Electric Power Market of Russia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 130-136.
    5. Oksana V. Savchina & Olga V. Savchina & Anastasia V. Asinovich & Maksim A. Kosyakov & Alexander L. Bobkov, 2017. "Energy Sector of the Russian Federation in the Context of Macroeconomic Instability," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 28-33.
    6. Sergei Palamarchuk, 2016. "Status of Electric Power Sector Reform in Russia," International Journal of Energy Economics and Policy, Econjournals, vol. 6(4), pages 663-671.
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    Cited by:

    1. Dmitriy Pavlinov & Oksana Savchina, 2022. "Analysis of the state of the hydropower market in modern conditions: the case study of the BRICS countries," Proceedings of Economics and Finance Conferences 13215689, International Institute of Social and Economic Sciences.
    2. Oksana V. Savchina & Dmitriy A. Pavlinov & Alexander L. Bobkov & Natalia Konovalova, 2022. "Comparative Analysis of the Financial Stability of Renewable-based Electricity Companies: The Case for Hydroelectric Organizations," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 392-408, September.

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    More about this item

    Keywords

    energy sector; electricity industry; economic and financial crisis; coronavirus pandemic (COVID-19); low-carbon economy; financial stability.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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