DEREGULATION PRIVATIZATION AND FUTURE TRENDS OF POWER INDUSTRY BASICS AND TUTORIALS

The electrical energy supply sector has undergone dramatic changes since the beginning of the 1990s. De-regulation, or privatization, has been adopted throughout the world as a new market-oriented approach.

Before privatization, power systems were generally owned by national governments and operated as vertically integrated organizations including generation, transmission and distribution.

Privatized structures vary considerably, with the power system being split geographically and/or vertically into separate companies.

Competition between generators is always possible, and energy supply contracts to end-users can be open to competition, but the transmission and distribution networks are an inherent monopoly with access and charging for their use overseen by a government regulator.

The private companies have access to capital at prevailing interest rates, avoiding government spending restriction (or encouragement) that is a feature of government-owned utilities.

It is generally believed that competition can drive energy efficiency up and electricity prices down. However, there is still some debate about how effectively market forces alone can stimulate the correct level of planning and construction of new generation and other plant at a level which ensures satisfactory security of supply for the longer term.

This difficulty is exacerbated by the technical inability to store significant quantities of electrical energy.

An area of doubt is therefore whether short-term electricity price fluctuations provide a sufficient economic signal to drive the long-term decision of a private company to build new plant, based on their analysis of risk and reward.

If a de-regulated system does fail to provide the level of energy supply security expected by modern communities it might not always be clear where the ‘obligation to supply’ rests.


Future trends
Power systems are continually evolving and with the increasing capability of computers and software, systems are becoming more precisely controlled for economy of operation and security.

The future is certain to include a greater proportion of primary energy from renewable sources. Generators are likely to be distributed throughout the power system and there may be a very large number of mass-produced very small generators.

The mode of operation of the power system will need to become more flexible and is likely to be based on local intelligent control. Operation of the distribution network as an active system can be anticipated, with routine flow reversal and continued operation under islanded conditions becoming feasible.

It is expected that generation and load controllers will need to respond to local network conditions, for example reducing the output of relevant generators to cover the period of a circuit outage.

This flexible response must be autonomous, to allow unmanned operation, and it would need to be
controlled in a local decentralized manner.

We seem to be at the beginning of a new era of major change in power systems plant, technology and management. Great challenges and opportunities for electrical engineers lie ahead.

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