ABSTRACT
Power sector reforms which are multiyear initiatives are happening to invite more and more private investments in power generation to bridge the demand-supply gap. Further, a paradigm shift involving the re-design of power system structures is inevitable to provide access to renewable-based energy system that offers flexibility in services. The reform is being done keeping in view bringing more competition so that power prices become competitive ensuring transparency alongside there should have a provision of ensuring recovery of cost of service from consumers to make the power sector sustainable. The reform will also provide physical security and reliability of power as every country aspires to provide reliable, affordable and sustainable electricity to its citizens. Most developing countries continue to operate with vertically integrated national power utilities that operate as monopolies. Restructuring is intended separating out generation from transmission and transmission from distribution and creating multiple generation and distribution utilities. This chapter deals with restructuring of power system in present days' context, concept of regulation and deregulation, post restructuring creation of generation, transmission and distribution as different entities including pricing methodology followed for each entities like central auction and bilateral trading, contract path method of transmission pricing, distance-based MW-mile method of transmission pricing and power flow-based MW-mile methodology of pricing to operate in a win-win situation. Environmental aspects of electric generation are also touched upon in this chapter.
