Module 7 : Power System Structures
Lecture 34 : Indian Scenario
Objectives
In this lecture you will learn the following
Indian Scenario
Electricity Act 2003
Indian Scenario: Ownership Issues
In India, the power sector was mainly under the government ownership (>95% distribution & ~98%
generation) under various states and central government utilities, till 1991. The remarkable growth of
physical infrastructure was facilitated by four main policies:
1) centralized supply and grid expansion
2) large support from government budgets
3) development of sector based on indigenous resources
4) cross subsidy
Cross-Subsidization means that a certain class of customers are charged higher prices for energy usage,
while another class is charged less. This is done with a social objective in mind
In mid 1990s, Orissa began a process of fundamental restructuring of the state power sector. This consisted
of a three pronged strategy of:
Unbundling the integrated utility in three separate sectors of generation, transmission and
1)
distribution,
2) Privatization of generation and distribution companies and,
Establishment of independent regulatory commissions to regulate these utilities. Meanwhile,
3) some moderate steps were taken towards reforms until the Electricity Bill 2003 was approved
by Parliament in May 2003.
The Electricity Act 2003:
The conceptual framework underlying this new legislation is that the electricity sector must be opened for
competition. The Act moves towards creating a market based regime in the power sector. 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
Lecture 34 : Indian Scenario
Objectives
In this lecture you will learn the following
Indian Scenario
Electricity Act 2003
Indian Scenario: Ownership Issues
In India, the power sector was mainly under the government ownership (>95% distribution & ~98%
generation) under various states and central government utilities, till 1991. The remarkable growth of
physical infrastructure was facilitated by four main policies:
1) centralized supply and grid expansion
2) large support from government budgets
3) development of sector based on indigenous resources
4) cross subsidy
Cross-Subsidization means that a certain class of customers are charged higher prices for energy usage,
while another class is charged less. This is done with a social objective in mind
In mid 1990s, Orissa began a process of fundamental restructuring of the state power sector. This consisted
of a three pronged strategy of:
Unbundling the integrated utility in three separate sectors of generation, transmission and
1)
distribution,
2) Privatization of generation and distribution companies and,
Establishment of independent regulatory commissions to regulate these utilities. Meanwhile,
3) some moderate steps were taken towards reforms until the Electricity Bill 2003 was approved
by Parliament in May 2003.
The Electricity Act 2003:
The conceptual framework underlying this new legislation is that the electricity sector must be opened for
competition. The Act moves towards creating a market based regime in the power sector. 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
