In: Electrical Engineering
Why should the energy market transition from being vertically intergrated, to an open market?
In The year 1990's,power system reformation concept is introduced. earlier generation,transmission and distribution all are under one category. Depends on their expenditures and maintinances they will fix the unit price for the consumer. But day by day energy demand increases drastically. So they will divide in to different parts.
These are generation, transmission and distribution.In the power system reformation independent system operator (ISO) operator is introduced.He will cordinated all the processes from the generation to the consumer. he will collects day by day demand data and sends to transmission and generation systems. From that data generation unit will generate the power to the transmission system. and also ISO operator conducts bidding for the consumers. New private generation units come for production to meet the load demand. so finally the power system network is vertically integrated from the generation system to the load centre.