Impact Assessment of Generation and Transmission Investment on Spot Prices in Electricity Markets: A Study of MSETCL, India

Abstract

Electric utilities worldwide have experienced a period of rapid changes especially in the market structure and regulatory policies. Under it, electric transport pricing can shape the level of competition in the electricity market. Spot pricing in this context is one of the effective schemes to achieve transmission pricing objectives.
The enactment of the Electricity Act 2003 has opened the door for wholesale electricity market in the Indian electricity sector. The success of Transmission Open Access (TOA) regulation in India needs to reconfirm the required infrastructure and appropriate pricing policy to promote competition in this sector. This paper aims at (1) the transmission pricing issues in general and Spot pricing in particular, (2) optimal Spot price formulation, (3) implementation of Spot pricing methodology over IEEE-30 Bus and real transmission network of Maharashtra State Electricity Transmission Company Limited (MSETCL) and (4) to assess the impact of generation and transmission investment on the Spot prices. Paper concludes that Spot pricing is easy to implement over real network situation and effective in achieving transmission pricing objectives.