Drivers to Establishing Energy Markets

 Encourage new generation

 Encourage better reliability

 Create competition between companies.

 Allow for innovative products

 Time of use pricing

 Renewable Energy Options

 Curtail able and Firm energy usage contracts

Market Benefits

 Disclosure of excess capacity

 Reduction in transaction costs

 Transparency of actual costs of production

 Consumption is able to adjust based on price instead of regulatory intervention

 Generation is able to respond to price by building additional capacity

 Pricing is done in a less discriminatory manner

Market Challenges

 Adds complexity to energy decisions

 There are often “winners and losers”

 In India the cross‐subsidy issues need to get resolved

 Some customers unaware of the markets feel they are being discriminated against

 Many electric users end up missing on opportunities or making decisions without full knowledge of the issues involved.