Domestic and Diplomatic Difficulties in Planning for Transboundary Trading of Electricity

Abstract

 This study was conducted to characterize domestic and diplomatic difficulties of countries planning to commence trading of electricity. Iceland and Tajikistan are examined to highlight particular difficulties. Regarding Iceland, suspicion of public and private aluminum smelting industries and possible hikes of electricity rates constitute a major domestic issue, along with fear of foreign intervention. Tajikistan intends to boost national prestige by construction of the Rogun Dam, slated to be the tallest dam in the world. That plan irritates Uzbekistan, which assumes hegemony in the region. Iceland should assure that electricity trade with foreign countries should not engender hikes of domestic electricity prices. Transparency of information should also be assured for the conduct of the national power company. The Iceland government should avoid "politicizing" the issue: trade should be dealt with genuinely as a business matter. Tajikistan should assign priority to increased national income by selling electricity, not in boosting national prestige by the construction of a huge dam. Findings from this study suggest that governments should (a) clarify to the public what benefits might be secured by electricity trade, (b) not politicize electricity trade with foreign countries, and (c) not victimize any country in the region.