Deregulation of Power System results in certain benefits, but we have seen several bad impacts of deregulation in California Power Market.
Do we have certain case studies of good and bad impacts of deregulation on power system of countries which implemented it in their power markets?
Californian crisis of 2000 is indeed a good example of bad influence of deregulation. I think that deregulation has both positive (incentive for competition) and negative (less coordination, externality) influences. Different countries experienced effects of both sides after deregulation. You can find some of my ideas along with some literature here: https://www.researchgate.net/publication/299976198_The_Role_of_State_in_Electricity_Reform_Creation_of_Competition_and_Efficiency
Conference Paper The Role of State in Electricity Reform: Creation of Competi...
Deregulation of Power System cannot always be beneficial. From the economic point of view, it may be beneficial, however, system security will get compromised. Nowadays very advanced technologies are available whose proper applications can make the system more beneficial with a littile compromise of system security.
In general, a new system will not be robust from its inception. If all its bottlenecks are identified and rectified then only it becomes robust.
Deregulation is a general term. There are thousand ways of doing deregulation, and each one has its own benefits and disadvantages. Therefore, I think you need to be more specific. Many countries have done deregulation. But these deregulation are not the same.
You need to first study the regulations. Some of these regulations are old and need to be updated. However, if they are working fine; therefore, there is no need of deregulation. But, if they are not working, they either must be changed, or deregulated to increase the efficiency of the system.
If by deregulation, you mean changing the structure of the power system from vertical to horizontal. I think in general it is a good thing, because it provides incentive for competition. But like all free markets, it must be regulated to some extent. Therefore, as mentioned earlier, given the way policy makers do deregulation, it can be good or bad. In California, it was not deregulation that made a trouble, it was the partial implementation of the deregulation that made trouble. They had changed the structure of the supply side and the electricity market, but they kept the demand side unchanged. It led to a disaster.
I hope my answer be helpful.
Best,
Saeed
The principal objectives and consideration of power system deregulation are different for different countries. For developing countries, the main objectives of power system deregulation are to attract various investments to power industry in order to meet the fast growth of electric demand caused by blooming economy and in the meantime to reduce government commitment and functions in power industry.
Only this way, the power industry, as a significant infrastructure, can realize sustainable development at high efficiency. However for developed countries the priorities and use of deregulation are different.
Further insight can be developed by this paper:
http://ieeexplore.ieee.org/xpl/articleDetails.jsp?arnumber=1489411
Deregulation has both both types of effect.
From financial point of view it is beneficial because lots of player will come it into market and trade electricity with low cost.
But there are some disadvantages also associated with this: that they are unaware of each other status and this coordination miss-match harm the Electrical Grid.
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