The document discusses the restructuring of power systems from monopolistic to deregulated markets. It explains that restructuring separates generation, transmission, distribution and supply functions. This creates new business opportunities and lower costs for consumers. Various restructuring models are presented including poolco, bilateral contracts and hybrid models. The poolco model uses a centralized market to set prices while bilateral contracts allow direct negotiations. The hybrid model combines features of the first two. An independent system operator maintains grid operations.

1. Contents:
 Introduction
 Need for restructuring
 Structure of restructuring
 Various restructuring models
Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi 1

2.  The existing rules of the monopolistic electricity market
authorize a single utility for generation transmission,
distribution and sell electricity in the state and country.
 Competition in the power market is based on the promise
that will increase the efficiency of the industrial sector and
reduces the cost of electrical energy of all consumers and
gives continuity of supply.
 To meet out the growing power of demand, the electric
power industry has to adopt the deregulated structure.
 Restructuring is to separate the functions of power
generation, transmission, distribution and electricity supply
to consumers.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

3.  Restructuring will create new business opportunities where
new firms selling new products and services will appear and
customers will have alternatives in buying electricity services.
 The objective of restructuring is to significantly reduce the cost
of power charged to small businesses and consumers.
 Restructuring of power industry is to abolish monopoly in the
generation and trading sectors. Generating companies may
enter into contracts to supply the generated power to the power
dealers/distributors/or bulk consumers or sell the power in a
pool in which the power breakers and customers can
participate.
 Deregulation is changing the monopoly rule or other
regulations of regulated industry.
 In the deregulated power market, the electricity is dispatched
with the help of either by a separate power exchange or pool
operator.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

4.  Power System restructuring gives
 Benefit of lower electricity price
 Better consumer service
 Improved system efficiency.
 As energy demand continues to grow in future, higher
voltage levels are needed.
 Technical problems arise in the transmission system due to
voltage stability and dynamic stability.
 This involves heavy pricing over the customers.
 The restructuring power system is to give opportunity to the
customer to buy energy at a more favourable price and
choose the generating company which gives energy at a
lower price.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

5. Independent System Operator
 The ISO is the neutral entity responsible for maintaining the
instantaneous balance of the grid function.
 A competitive generation market and retail direct access
necessitated an independent operational control of the grid.
 However, the independent operation was not guaranteed without
an independent utility is called ISO.
 The purpose of ISO is to ensure affair and non-discriminatory
access to transmission services and ancillary services, maintain
the real time operation of the system and reliability.
Power Exchange(PX)
 The contracted parties agree individually for certain terms such as
price, availability and quality of products, industry restructuring
proposals have concluded the necessity of creating new market
place to trade(sell and buy)energy in a competitive manner. This
market-place is termed as power exchange(PX) or spot price
control.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

6. 6
Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

7.  The market participants are
 Generating Companies(GENCO)
 Transmission companies(TRANSCO)
 Distribution Companies(DISCO)
 Customers
 Independent System Operator(ISO)
 Retail Companies(RETAILCO)
 In ISO, sellers and buyers submit their bid to inject power into out of the
pool. Winning bidders are paid the spot price that is equal to the highest bid
of the winners.ISO balancing supply and demand in real-time and maintain
reliability.
Restructuring models
 The restructuring models are
 Poolco model
 Bilateral contracts model
 Hybrid model
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

8. Poolco model:
 It is defined as a centralized market place that clears the market
for buyers and sellers where electric power sellers and buyers
submit bids and prices into the pool for the amounts of energy
that they are willing to sell or buy.
 Poolco becomes a centralized clearing market for trading
electricity, which would force distribution utilities to purchase
power from poolco instead of trading with generating companies.
 These companies sell power at a Market Clearing Price(MCP)
defined by poolco.MCP is the price of highest selected bid.
 Poolco controls the maintenance of transmission grid and
encourages an efficient operation by assessing non-
discriminatory fees to generators and distributors to cover its
operating expenses.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

9. Bilateral Contracts(Direct Access Model):
 In Bilateral contracts, customers are free to contract
directly with power generating companies without
entering into pool arrangement.
 In this contract, the role of ISO is limited. Buyers and
sellers could negotiate directly in the market place.
 Wholesale suppliers would pay transmission changes to
a transmission company to acquire access to the
transmission grid and pays charges to distribution
company to acquire access to the local distribution grid.
 Suppose two contracted parties would agree on contract
terms such as price, quantity and location, generation
providers would inform the ISO on its hourly
generation.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

10. Hybrid model:
 This combines various features of the previous two models.
 It differs from Poolco model as utilizing the power exchange
is no obligatory.
 Customers are allowed to sign bilateral contracts and choose
suppliers from the model.
 Loads are not provided bilaterally would be supplied by an
economic dispatch of generating units through bids in the
pool.
 Hybrid model is very costly to setup because of separate
entities required for operating the power exchange and
transmission system.
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi

11. 1.
Hadi Saadat, ‘Power System Analysis’, Tata McGraw Hill Education
Pvt. Ltd., New Delhi, 21st reprint, 2010.
2.
Kundur P., ‘Power System Stability and Control, Tata McGraw Hill
Education Pvt. Ltd., New Delhi, 10th reprint, 2010.
3.
Pai M A, ‘Computer Techniques in Power System Analysis’, Tata Mc
Graw-Hill Publishing
Company Ltd., New Delhi, Second Edition, 2007.
4.
J. Duncan Glover, Mulukutla S. Sarma, Thomas J. Overbye, ‘ Power
System Analysis & Design’, Cengage Learning, Fifth Edition, 2012.
5.
Olle. I. Elgerd, ‘Electric Energy Systems Theory – An Introduction’,
Tata McGraw Hill Publishing Company Limited, New Delhi, Second
Edition, 2012.
6. C.A.Gross, “Power System Analysis,” Wiley India, 2011.
7.
M.Jeraldin Ahila “Power System Analysis”, Lakshmi Publications,
Chennai, Eleventh Edition 2017.
8. Other Web Sources
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Kongunadu College of Engineering & Technology Restructuring of Power System Prepared by,
Mrs.S.Revathi