Restructuring of the electricity industry

Abstract

Restructuring of the electricity industry is one of the important interventions which the Electricity Act envisages for bringing about competition and ensuring efficiency in the operation of the industry in the country. This chapter presents an overview of the restructuring system, discusses the status of unbundling of State Electricity Boards, and deals separately with the restructuring in generation, transmission, and distribution segments. The concept and issues around multiple distribution licensees in the same area of supply have been dealt with in this chapter. The vision of the Act in doing away with the single buyer model has been explained, and the present state of affairs in terms of implementation of this requirement has been examined with live examples from some states. The chapter reiterates the objectives of restructuring the electricity industry in terms of providing competition for the benefit of consumer, attracting private investment, and improving efficiency of operations. It also suggests the way forward for translating this vision of the Act into reality.