11-06-04 Head of Basic Element Oleg Deripaska proposed to discuss the course of energy reforms in Russia with all interested parties involved, including representatives of the Russian government, as the latter is known to hold a controlling block of shares in Unified Energy System of Russia (UES). Mr Deripaska voiced his opinion at a meeting in Moscow.
"I think, all participants of this meeting will be ready by September or October," he added. "We have already decided regarding the necessity of these reforms. So now we have to discuss their results," the official said and noted that the final aim of these reforms was still obscure to him. "It is important that we decide what goals the government pursues here, and then, make a decision what needs to be changed and in which way."

Energy reforms have already raised discussions several times. In particular, following a series of breakdowns at newly-reformed energy systems of the USA, Canada, the UK and Norway, experts and analysts began saying that the elimination of vertically-integrated energy companies would make the whole system less reliable. However, this wasn’t convincing enough for the authors of the energy reforms.
Now, the reforms have been slowed down by the monopoly carrying them out only by 50 %. For example, the government still does not bother to control electrical networks and control centres that used to belong to UES. According to the reform concept, this should be done by the government. Mr Deripaska suggested a solution to this problem.

In his opinion, the above mentioned control functions over the electrical networks and control centres should be handed over to the Federal Energy Agency, i.e. to its separate department that will be created for this very purpose. In addition, the Head of Basic Element expressed his opinion that currently the energy generating industry of Russia needed no investments, as it still wasn’t used at full capacity.
The main threat that the divided Russian energy system might face is its inability to compete with major western companies most of which tend to consolidate now, Mr Deripaska emphasized. There is a possibility of consolidated energy generating companies becoming acquired by major western companies, which contradicts Russia’s interests.

Major western energy generating grids tend to merge now, among which are European concerns EdF, Fortum, E.ON, and RWE. In Deripaska’s opinion, UES of Russia should remain a strong company, capable of competing with other major energy companies, such as Irkutskenergo, Bashkenergo, Tatenergo, and Rosenergoatom.
In conclusion, Mr Deripaska stated that Basic Element was ready to consider the possibility of acquiring 40 % of Irkutskenergo, a stake that belongs to the government. Such decision will be made only after tender requirements are announced, and "if they turn out to be favourable for us," the head of the company concluded.