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Impact of Facts Devices on Restructured Electricity Market

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Rajesh @ Balasubramanian A , Gokul P


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Submitted by:

Gokul P & Rajesh @ Balasubramanian A

                IV yr B.Tech,

Department of Electrical and Electronics Engineering

                   Pondicherry Engineering College,

                   Pillaichavady, Pondicherry -605 014

E-Mail :  Ph. No. 0413-2256301

E-Mail :    Ph. No. 0413-2253914



Rajesh @ Balasubramanian A            Gokul P

Pondicherry Engineering College


        This article focuses on reporting the study on a problem area relating to the use of Flexible AC Transmission Systems (FACTS) devices in restructured power market. Initially the optimal power flow analysis was carried out on a 5 bus test system . The power flow analyses in all transmission lines were computed and conjunction lines were identified. By placing FACTS devices on the line of the test system at different compensations, congestion relief was demonstrated. It was inferred that by placing  FACTS devices in the lines, reduction in transmission losses were also identified. It is the need of the hour to amalgamate FACTS controllers in the networks because the Transmission and Distribution losses accounts to 21 % in India. In this article wheeling transactions were considered to incorporate the effect of restructured electricity power market.



        Rajesh @ Balasubramanian A         Gokul P



Our nation is full of natural resources and we have enough coalmines, rivers to generate electric power. Though we have all these resources we are facing an energy shortage of 10%.But energy demand increases day-by-day. This can be managed by increasing the number of generation stations.

Government could not invest more on generation stations. Electricity bill ’03 encourages private bodies to invest in generation part. This can be stretched to distribution phase also. All these agenda can be brought into project called restructuring.


The interest in restructuring and reform of the power sector is a worldwide phenomenon that is being pursued in different formats, depending on the structure and condition of the economy and political institutions in those countries. Yet the core of the reform remains the same, i.e., the establishment of a transparent regulatory structure, unbundling of the power sector, creation of national and state grids with a transparent and efficient dispatch, entry and exit systems for participants, wholesale market in the power sector, more choices regarding the sales to consumers, and other measures that can improve the competition and the efficiency of the sector.

The reforms and restructuring of the SEBs in the country started with the financial support of World Bank which agreed to provide required loan to state government duly linked with certain milestones to be achieved. Under this assistance consultancy services were also provided to some utilities to carry out restructuring. The central government and some of the state government have appointed regulators and a few governments have unbundled the sector into generation, transmission and distribution through State Enactments.                                                

It has been observed that captive power plants installed in many industries in India are operating individually and are under-utilised. Maximum utilization of these plants along with the economical consideration is possible by wheeling the power between the utilities. Wheeling has been defined as the use of a utility’s transmission facilities to transmit power for other buyers and sellers. An attempt is made here to realize this concept by applying it in a small industrial belt in Southern India.


The basic objective of reform in power sector is to ensure adequate availability of reliable safe and quality power at reasonable rate to all the consumers at times to come .Keeping in view the history of failures of ill-managed utilities (mostly SEB’s) the following model of restructuring suitable to Indian condition was selected out of models available elsewhere in the world.

The following steps can be put forward for restructuring of power sector:

  • Unbundle the SEB’s as generation, transmission, distribution entities                                            

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  • Increase the intrastate transmission lines
  • Bridge the gap between power demand & electricity generation  
  • Decentralize the planning process for an easy entry of generators
  • Reduce the direct government control
  • Establish a competitive power market – With two extreme ends of power supply chain, i.e., generation and distribution privatized, the flow of revenue to monopoly organization could be ensured by the markets at either ends being taken care by forces of competition to   protect the interest of consumers and ensure power availability at reasonable price and quality

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  • Increase tariff incrementally
  • Privatize and commercialize the power entities   - The distribution business to be subsequently privatized and given to a prospective bidders to ensure reliable and quality power, improved services and better efficiency with a well-defined targets to be achieved and linked with incentives




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