Presented By:-RAJAT KUMAR

Electricity deregulation and requirementsMain ObjectiveCompetition,Deregulation and Open AccessBenefits of Electricity DeregulationEntities in Deregulated EnvironmentTransmission and DistributionWhy Regulation?Structure of Regulated and Deregulated industryMarket Model,Issues,Optimal Bidding,risks in electricity marketElectricity act 2003conclusion

Deregulation-“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. Deregulation 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.

To provide electricity for all reasonable demands.

To encourage the “competition” in the generation and supply of electricity.

To improve the continuity of supply and the quality of services.

To promote efficiency and economy of the power system.

Competition The competition is at two levels in deregulated power industry: Wholesale (generation) and retail (distribution).

Systems capacity will be used efficiently. Optimization of energy supply will takes place. Price of the electricity will become clearer. Consumer choice will be improved. Bad technologies are ignored and good technologies

are replaced in their place. Electricity prices are reduced. The usage efficiency is improved due to restructuring

in price signals.

Entities in Deregulated Environment

Gencos

Transcos

Discos

Rescos Customers

ISO

Why “REGULATION” ?Why “REGULATION” ?

Regulation of utilities is based on the inherent risk that a single monopoly supplier will overcharge consumers due to the lack of competition and high demand.

Structure Of Regulated IndustryStructure Of Regulated Industry

Structure Of Deregulated Structure Of Deregulated IndustryIndustry

The Marketplace Mechanism

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1. PoolcoThere is only one buyer in this system. 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.

2.Bilateral ExchangeIn this type of multi-seller/buyer system individual buyer or seller make a deal to exchange a power at prices and under the conditions they agree to.

3.Power Exchange (PX)The Government sets up, or causes the power industry to establish, a trading exchange for electric power, which operates much like a stock exchange. The buyers and sellers enter their needs into the power exchange. whereas, the seller would enter his demand .

Pool Market1)All energy transactions are

carried out through the pool2)The Poolco operator is

responsible for the market settlements, unit commitment and determination of pool price.

3)Participation by Gencos is mandatory

4)Here Poolco operator is responsible

5)Eg. UK market

Open access market 1)Bulk of energy transactions

are carried out as bilateral trades.

2)The ISO is responsible for market administration, generation scheduling or dispatch function.

3)Participation in the market by Gencos is not mandatory

4)The ISO is responsible for system security and control.

5)Eg. Nordic markets

Network ConjestionWhen 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.

1.Price Area Congestion Management

2.Available Transfer Capability (ATC) based Congestion Management

3.Optimal Power Flow (OPF ) based Congestion Management.

For a genco to survive in competitive environment, it has to operate very efficiently. But only efficient operation sometimes may not suffice because in the energy auction it has to sell its products at competitive prices to get the maximum profit out of it

All those activities on the interconnected grid that are necessary to support the transmission of power while maintaining reliable operation and ensuring the required degree of quality and safety.

Supply Shortage A supply shortage due to generation

outages can cause electricity prices to shoot up drastically.

DefaultsThe default of the participant to complete the

transaction can raise the issue of creditworthiness and this also may load to price hike

Lack Of ExperienceMarket participant’s lack of experience with hedging

tools could be another source of risks in electricity markets.

The electricity sector must be opened for competition. The Act also seeks to consolidate, update and rationalize laws related to generation, transmission, distribution, trading and use of power. It focuses on:• Creating competition in the industry• Protecting consumer interest• Ensuring supply of electricity to all area

Reliability and “fair” electricity prices through innovative technologies,

economics and competition