SEMINAR REPORT ON

“ELECTRICITY MARKET”

Submitted by: Deba Prasad Das

Regd no:0801214177
Branch: Electrical
Date: 6th sept, 2011
 Layout of slide
• Introduction
• Electricity act
• Power market development in India
• Global power market structures
• Power pool model
• Economic aspects
• Business setting
• Conclusion
• Reference
 Introduction
 
 POWER development in India commenced at the end of 19 th century with the
commissioning of first unit of 130 KW generators at Sidrapong in Darjeeling
during 1897, followed by first steam driven power plant rated 1000 KW two years
later at Calcutta in 1899.

 In the pre-Independence era, the power supply was mainly in the hands of private
sector that too restricted to the urban areas.

 This was achieved with the formation of Electricity (supply) Act, 1948, the
Indian Electricity Rules, 1956, and the Electricity Regulatory Commission Act,
1998.
 
 After Independence, the Government of India felt the need for broadening
electricity supply industry with a view to rationalize its growth all over the country.
 Electricity Act
  Though the installed power generation capacity has grown up 77
times till independence, the power situation in India is still
unsatisfactory and there is a huge shortage of power

 Introduction of Electricity Act 2003 provides a liberal and sustainable

framework aimed at development of the Power sector in India.

 In some states, the Distribution companies are government

controlled and in few states (Orissa & Delhi) the Distribution
companies are privatized.

 Post Electricity Act 2003, Generation is delicensed and the generating

companies are allowed to set up generating plants in accordance with
National Electricity Plan. Generators are free to sell power to any user.
 Power Market development in India

 Presently, In India electricity trading has started

with a limited scope in wholesale electricity market
across different regions / states, there is now
enough scope to develop a full-fledged power
market in the country. Generators and distributors
provide competition in a power market.
 There are mainly two distinct market concepts that
prevail today in the power market namely Single
market concept and Two-market concept.
 Power market design in India
 The power markets operating in different
parts of the world can be broadly classified
into four basic generic structures.
1. Monopoly model
2. Single-buyer model
3. Third-party or open-access model
4. Power pool (wholesale market or spot
market) model.
 Economic aspects

 In economic terms, electricity (both power and energy) is

a commodity capable of being bought, sold and traded.
An electricity market is a system for effecting purchases,
through bids to buy; sales, through offers to sell;
and short-term trade
 The commodities within an electric market generally
consist of two types: power and energy . Power is the
metered net electrical transfer rate at any given moment
and is measured in megawatts (MW). Energy is electricity
that flows through a metered point for a given period and
is measured in  (MWh).
 Business setting

 The Environment
 Competition
 Electricity buyers
 The Regulator
 Conclusion
 New Electricity Act 2003 with its de-licensing in generation,
provision for open access in transmission and distribution
provided the basis for designing an effective power market.

 There are different successful market models adopted by

different countries worldwide. However, there are certain
considerations specific to the country that need to be
considered while designing the best suited market model. The
ultimate objective of the power market is to produce
symmetries and discipline required for adequate investment and
to ensure a reliable and reasonably priced supply to the
consumers.

 
 Reference
 [1]. Takashi Ishikida and Pravin P Varaiya, “Pricing of Electric
Power under uncertainty: Information & Efficiency”, IEEE
Transaction on Power Systems Vol.10, No.2, May 1995, Pg 884-
890.
 
 [2]. Jussi Keppo and Mika Rasanen, “pricing of electricity tariffs
in competitive markets”, Energy Economics 21(1999), pg 213-
223.

 [3]. O.P Rahi, H.K Thakur and A.K. Chandel, “ Power sector
reforms in India : A case study” IEEE Power India conference,
2008, pp. 1-4.
 
THANK YOU