What is Electricity Deregulation
Introduction of electricity deregulation
Electric supply industry has undergone many significant changes during the last few years in almost all countries of the world. Many vertically integrated utilities have been replaced by separate generation, transmission and distribution companies. The electricity market is becoming more competitive. In many cases the large industrial and commercial consumers have the option of selecting their energy supplier. It is anticipated that this choice may extend to residential level also. All these change in electric supply industry are collectively referred to as ‘electricity deregulation’.
Need For Electricity Deregulation
Previously one electric utility was responsible for generation, transmission and distribution of electrical energy. At the consumer premises the utility maintained an energy meter to record the energy used by the consumer. This meter was read monthly (or bimonthly) and the consumer want charged as per this reading. The utility was also responsible for repair and maintenance of all equipment and lines from generation up to the point where meter was installed.
The objective of any electric utility should be to generate electricity at minimum cost, transmit and distribute it efficiently and provide a reliable and high quality service to consumers. However this objective was not being fulfilled and electric utilities became monolithic and unresponsive consumer needs. This require un bundling of electric utilities into separate generation, transmission and distribution companies and many other changes to ensure that reforms are carried out successfully.
It is the company responsible for electric generation. Gen cos have relationship with large whole sale customers for marketing the electricity. Gen-cos have specialized personnel to optimize the generation schedule, hydro thermal mix and other allied activities so that electricity is generated at minimum cost and resource are utilized optimally.
It is responsible for transmission of electrical energy. It must allow all corners access to its transmission network on an equal basis. A level playing field must exist for all market participants as they transmit electricity to different parts of region. A Transmission company can be owned by a utility but its operations must be separate and independent of operations and functions of the utility.
Distribution companies supply electrical energy to the consumers. They are responsible for setting up, renovate and maintain the distribution network in the area. They also look after the metering and billing functions. They must maintain voltage and frequency within proper limits as prescribed by the state laws and regulatory commission. They must also ensure reliability and security.
Their job is to market the electrical energy to the retail customers. Other related service like lighting retrofits, energy audits etc. may also be performed by it. They are also called energy service provider (ESP). Energy trading is the most important function of a retail company.
Metering In Deregulation Market
Previously the metering function was also performed by the single organization which controlled generation, transmission and distribution. With debuting of generation, transmission and distribution operations, metering is one area which will be affected immensely. Meter ownership, access to meter data, timing readings, interval metering, load profiling, load research metering, automated meter reading, data management, and sharing of returns are some of issue affected by deregulation process.
Meter is the physical interface between the utility consumers. Since metering is a part of distribution operation, the Distribution companies claim that they are the natural owners of the meters. However the retail companies also have interest in meter ownership and are interested to install and maintain meters. Ownership of meter increases a company‘s market power. As a result of above the task of installing and maintaining meters is likely to be assigned to meter service provides (MSP). Addition of MSP is like to balance the interest of Distribution companies and retail companies. Moreover it means better service to the consumer. Whenever a consumer is not satisfied with the service of one MSP, he can change the MSP. With more than one MSP operating in an area, the consumers will benefits in the form of better and prompt service and possibly reduced costs.
Access to Meter Data
Many power need access to meter data. These include Discoms and retail companies. Discoms needed the meter data to compute the charges for distribution service. Retailers need this data to calculate the charges for generation services. To ensure proper exchange of meter data among the different power players, it is necessary to have a standard data format to avoid confusion. Electronic data exchange is very helpful in this respect.
Timing of Meter Reading
Previously the electric utilities got the meter reading taken through meter readers once a month or once in two months. Many remote customers record the meter reading themselves and convey it to the utility (this process is likely to be unreliable). Timing of meter reading in the new regime is important power players, it is necessary to have to be shared between the different power players. In view of this recording of meter data at proper times and ensuring that this data is accurate is very important.the cost of electrical depends on the time of day. During peak load times the generation cost is more. During off-peak hours the generation cost is less. The difference in the generation cost during peak and off-peak hours to can also be substantial. In view of this real time market price of electricity changes from hour to hour in the whole sale market. Therefore it is necessary to know the amount of energy used in different hours of the day. this possible through the use of interval meters.
Hence these are electricity deregulation if you find any incorrect in above article you must comment below in comment box.