Join 60,000+ competitive exam aspirants
or with email
Your Cart
Subtotal₹0
Total₹0
Examoogle • User • info@examoogle.com • EE-2024-8821
Chapter 1 of 12 • Page 1 of 248🔒 Protected PDF • Watermarked
Join 60,000+ competitive exam aspirants
Customer need to buy electricity from
Local utility company
Spot Market by bidding for purchase
Direct contracts with Generation Company or even from the local distribution company
All of above
All of above
Quick Summary: In a deregulated and restructured power market, electricity is treated as a commodity that can be traded through multiple channels. Customers have the flexibility to procure electricity from local distribution companies (DISCOMs), participate in open access markets via power exchanges (spot markets), or sign bilateral power purchase agreements (PPAs) directly with generation companies (GENCOs).
In a deregulated and restructured power market, electricity is treated as a commodity that can be traded through multiple channels. Customers have the flexibility to procure electricity from local distribution companies (DISCOMs), participate in open access markets via power exchanges (spot markets), or sign bilateral power purchase agreements (PPAs) directly with generation companies (GENCOs).
TotalCost=(EnergyPrice×Consumption)+TransmissionCharges+WheelingCharges
NetLoad=∑Demandi−SelfGenerationj
The restructuring shifts electricity markets from a vertical monopoly to a competitive environment. The mechanism relies on open access, where the grid acts as a common carrier, allowing third-party generators to supply electricity to consumers through regulated transmission and distribution networks, subject to open access charges.
Deregulated markets promote competition among generators.
Open Access allows consumers to choose their supplier, increasing market liquidity.
Bilateral contracts provide price stability through long-term hedging.
Spot markets (Power Exchanges) provide real-time price discovery based on demand-supply equilibrium.
Increased consumer choice and competitive pricing.
Higher efficiency in generation through market-driven incentives.
Increased market volatility for short-term spot contracts.
Complexity in managing grid balancing and settlement mechanisms.
Industrial and commercial open-access consumers.
Distribution utility procurement portfolios.
The Electricity Act 2003 in India paved the way for open access in the power sector.
Option B is correct but incomplete as it only represents short-term trading via exchanges.
D is correct — In modern restructured power systems, a customer has diverse avenues to purchase electricity, including traditional utilities, open market exchanges, and direct bilateral agreements.
Always remember that in a deregulated model, the role of the transmission/distribution operator becomes that of a common carrier, while price is no longer fixed by a single monopoly.