RESTRUCTURED POWER

SYSTEM

BY
CHINMAY KUMAR NAYAK
 What is deregulation in power industry?

 Electric deregulation is the process of changing rules

and regulations that control the electric industry to
provide customers the choice of electricity suppliers
who are either retailers or traders by allowing
competition.
 It improves the economic efficiency of the
production and use of electricity.
 Due to competition in the electric industry, the
power prices are likely to come down which benefits
the consumers.
 Benefits

 Systems capacity will be used efficiently.

 Optimization of energy supply will take place.
 Price of the electricity will become transparent.
 Consumer choice will be prioritized.
 Bad technologies are ignored and good technologies
are replaced in their place.
 Electricity prices are reduced.
 Entities in deregulated environment

GENCO

ISO
TRANSCO

DISCO
RESCO
CUSTOMER
Structure of regulated industry
Structure of deregulated industry
 Market place mechanism

 Poolco: The Poolco is a governmental agency that

buys for everyone, taking bids from all sellers and
buying enough power to meet the total need, taking
the lowest cost bidders.
 Bilateral Exchange: In this type of multi-
seller/buyer system individual buyer or seller make a
deal to exchange power at prices and under the
conditions they agree to.
 Power Exchange (PX): Being set up by the Govt.
operates much like a stock exchange. The buyers and
sellers enter their needs into the power exchange.
 Market models

Open access market Pool market

 Bulk of energy transactions are  All energy transactions are

carried out as bilateral trades. carried out through the
 The ISO takes care of market
pool
administration, generation  The Poolco operator is
scheduling or dispatch responsible for the market
function.
settlements, unit
commitment and
 Participation in the market by determination of pool
Gencos is not mandatory. price.
 The ISO is responsible for  Participation by Gencos is
system security and control. mandatory.
 Eg. Nordic markets (Sweden,  Eg. UK market
Norway, Finland, Denmark,
Iceland)
 Risks in electricity market

 Supply Shortage: A supply shortage due to generation

outages can cause electricity prices to shoot up
drastically.
 Defaults: The default of the participant to complete the
transaction can raise the issue of credit-worthiness and
this also may lead to price hike.
 Network Congestion: When the producers and
consumers of the electric energy desire to produce and
consume in amounts that would cause the transmission
system to operate at or beyond one or more transfer
limit, the system is said to be congested.
 Conclusion

 Motto of deregulation of electricity market:

“Reliability and “fair” electricity prices

through innovative technologies,
economics and competition”