Financial Sustainability of Energy Business Development: The Unregulated Activity Phenomenon

Lazar D. Gitelman, Mikhail V. Kozhevnikov () and Maksim K. Ditenberg
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Lazar D. Gitelman: Department of Energy and Industrial Management System, Ural Federal University, 620002 Ekaterinburg, Russia
Mikhail V. Kozhevnikov: Department of Energy and Industrial Management System, Ural Federal University, 620002 Ekaterinburg, Russia
Maksim K. Ditenberg: Department of Energy and Industrial Management System, Ural Federal University, 620002 Ekaterinburg, Russia

Sustainability, 2025, vol. 17, issue 2, 1-25

Abstract: The article presents study results showing the increasing role of unregulated activity as a boost for innovative processes in energy companies and their investment appeal. A summary of academic literature, reports by leading consulting companies, and international energy agencies make it possible to outline the landscape of the most economically viable areas of business activity in the energy industry, the most promising of which are energy efficiency, design and deployment of EV charging networks, smart grids, and telecom services. Analysis of financial performance statements of over 30 energy companies from different countries demonstrates the contribution of unregulated activities to their financial stability, which shows in growing profits, capitalization, and stock prices. It is revealed that despite the active promotion of unregulated activities by the state that primarily seeks to achieve the goals of the low-carbon transition, there is a stronger government presence in the capital structure of energy companies, which in the future will slow down investment activity in the industry. In this regard, the discussion considers the barriers to organizing unregulated business in the electricity sector and methods to eliminate them. In particular, a set of necessary conditions is defined, under which entrepreneurship in the industry contributes to improving the efficiency of the main business processes—production and transportation of energy.

Keywords: unregulated activities; electric power industry; financial sustainability; investment attractiveness; energy transition; diversification (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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