Framework for Separation of Carriage and Content Business in Distribution Segment to Introduce Competitive Retail in Indian Power Sector

Abstract

Reforms in Indian Power Sector were introduced with the expectation to make sector profitable. In the first phase of reforms The SEBs were unbundled into GENCO, TRANSCO and DISCOMS. In this phase the Power Exchanges were also established for power trading. The outcomes were not as promising. The onus of the end of reform euphoria was mainly placed on few shortcomings. These highlighted inadequacies includes- inconsistent policies, procedural complications internal to the sector and dire financial state of power utilities. The various concerns plaguing the Indian Power Sector also highlights inefficiencies due to - increasing financial losses, increasing debt burden on State DISCOMs, negative impact of losses and debt on GDP, increasing ATandC losses, increasing power purchase cost, increment in per unit cost of power, increasing gap between average cost and average revenue.As per this study, a framework for the Separation of Carriage and Content Business in Distribution Segment to Introduce Competitive Retail in Indian Power Sector requires: Regulatory Provisions, Transfer Scheme, Unbundling of Distribution Business, The Electricity Code, Open Access and Consumer Switching. newlineThe present study forwards suggestions and recommendations for theory and practice. Academic Implications reflects the contribution of study into the theoretical premise. The study suggests new constructs which may affect the profit ranking of a firm in mixed oligopoly market structure. Economic Implications contributes in answering the business problem and reflects that the retail competition shall address the existing inefficiencies of Indian Power Sector. This will have positive consequences on the growth of Indian economy. The economy of the country is expected to grow at a higher rate in the foreseen retail scenario. Policy Implications suggest that policy-makers of India may use the output of this thesis as the guideline for redesigning and evaluating the electricity market liberalization schemes.