A new regulator (a monitored marketplace) for wholesale power transmission in the offing could spur huge private investments being lined up in the transmission sector. The proposed independent systems operator (ISO), as it was cleared by a committee of secretaries, will take over load dispatch functions from the PowerGrid Corporation of India (PGCIL), the central transmission utility, over the next two years or so.
The idea is to take away the job of load dispatch from PGCIL, which performs it in addition to building transmission networks. Load dispatch will thus become an independently regulated activity.
The idea is to take away the job of load dispatch from PGCIL, which performs it in addition to building transmission networks. Load dispatch will thus become an independently regulated activity.
To begin with, ISO will be a wholly-owned subsidiary of PGCIL. Gradually, PGCIL will bring down its stake in the arm and the equity will be distributed among all transmission licencees. The idea is that ISO should be capable of objective decision-making with no concentration of ownership in the hands of any operator.
ISO is being planned to be an agency that will federally control transmission systems. PGCIL continues to be the dominant player in transmission, even through the sector has already been opened up for the private sector.
The situation of CTU (PGCIL) also being the systems operator is, however, being perceived to be a cause for concern among potential investors in transmission networks. All players in electricity, who have a transmission licence, would be eligible to pick up stakes in the ISO company.
Internationally, there are two different models for transmission systems operation. One is the builder (the utility) performing the load dispatch functions too. This is the system prevalent in most European countries, which by default, exist in India also right now.
The other system is that of an independent regulator of load dispatches and utilities being separate from that. This system exists in the US. ISOs in the US are created by a pool consisting of the operators themselves. There are independent boards for their impartial functioning. The proposed ISO, if it eventually gets separated from PGCIL, would introduce a largely US-like system in India.
India has already built the infrastructure for a unified national load dispatch centre. There are five regional load dispatch centres, North, South, East, West and North-east. RLDCs handle inter-regional dispatches. Besides, there are 32 state load dispatch centres for intra-state allocations.
The government feels that a separate regulator of load dispatch could be set up in harmony with the development of the transmission sector, which is set to witness large investments in the public-private partnership mode.
In some countries, ISOs also perform many other functions in addition to regulation of load dispatch. These include providing power companies open access to transmission infrastructure, tracking power usage and issuing alerts.
Separating load dispatch from PGCIL is important from the point of view of facilitating competition. The regulator also being the dominant incumbent operator is identified as a potentially anti-competitive practice.
ISO is being planned to be an agency that will federally control transmission systems. PGCIL continues to be the dominant player in transmission, even through the sector has already been opened up for the private sector.
The situation of CTU (PGCIL) also being the systems operator is, however, being perceived to be a cause for concern among potential investors in transmission networks. All players in electricity, who have a transmission licence, would be eligible to pick up stakes in the ISO company.
Internationally, there are two different models for transmission systems operation. One is the builder (the utility) performing the load dispatch functions too. This is the system prevalent in most European countries, which by default, exist in India also right now.
The other system is that of an independent regulator of load dispatches and utilities being separate from that. This system exists in the US. ISOs in the US are created by a pool consisting of the operators themselves. There are independent boards for their impartial functioning. The proposed ISO, if it eventually gets separated from PGCIL, would introduce a largely US-like system in India.
India has already built the infrastructure for a unified national load dispatch centre. There are five regional load dispatch centres, North, South, East, West and North-east. RLDCs handle inter-regional dispatches. Besides, there are 32 state load dispatch centres for intra-state allocations.
The government feels that a separate regulator of load dispatch could be set up in harmony with the development of the transmission sector, which is set to witness large investments in the public-private partnership mode.
In some countries, ISOs also perform many other functions in addition to regulation of load dispatch. These include providing power companies open access to transmission infrastructure, tracking power usage and issuing alerts.
Separating load dispatch from PGCIL is important from the point of view of facilitating competition. The regulator also being the dominant incumbent operator is identified as a potentially anti-competitive practice.
