Restructure of Electricity Market in India: A Business Prospective

In the regulated regimes many of the old, inefficient or obsolete plants may continue to function and recover investments while in the competitive regimes they may be out of the market. One of the important aspects of Electricity Act'03 is to bring about completion in Indian Power Market. Short term trading in electricity is an important step in this direction. The most basic factors that influence the prices in any market are demand and supply. But in case of electricity, the prices are essentially influenced by demand and not supply. It is because the generating cost of the sellers in a power market either remains constant or varies over a narrow range. While bilateral trading is in existence for quite some years, collective transaction through power exchange has become a reality only in 2008, with the commencement of Power Exchange in India. The purpose of bringing competition in the regulated Indian market is quite beneficial. So this paper fall the light on electricity business in India on the basis of power exchange prospective by considering the electricity Act 2003.