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Modernising the power sector

Maximising efficiency; conserving resources

Global transformation in best practice

The past few decades have witnessed a global transformation in best practice in the power sector. At the onset of the second half of the twentieth century, responsibility for electricity supply was in the hands of state sector monoliths. Models for generation, transmission and distribution were rigid and inflexible, resulting in inefficiencies and high costs.

One of the main developments in recent years has been the unbundling of generation, transmission and distribution, typically with a national grid for transmission, usually government-owned. Generation and local distribution are transferred to the private sector, in a highly-regulated environment. In some cases, generation is shared between government and private sector companies.

This creates a competitive environment, thus increasing efficiency and lowering prices for the end user – both corporate and domestic. In principle at least, this leads to decreases in production costs and industry overheads and a reduction in the cost of living.

The unbundling of generation, transmission and distribution also has the consequence that it becomes simpler to identify where there are inefficiencies and losses in the power network.

In many countries, the introduction of such changes is vital. Where there is an overall deficit in generated power, every percentage point in increased efficiency has an important positive effect on the national economy.

Innovations in generation

Once generation, transmission and distribution have been separated, it is possible to focus more effectively on innovations in generation, especially in an environment that stimulates private sector competition. Typically, conventional power stations become more efficient, and a more complete mix of power generation modalities can be introduced. An efficient national grid network means that electricity generated, for example, by hydropower at one end of the country can supply consumers at the other end.

Growing emphasis on renewables

Renewable energy plays an increasingly important role in power supply in almost every country. In some countries, with an abundance of opportunities for hydropower or solar energy, electricity generation through renewable energy has already reached a high percentage, touching 100% in some cases. This is clearly important for many reasons, including climate change, pollution and energy self-sufficiency.

Changing balance in public and private sector participation

The increased participation of the private sector, in terms of private sector ownership and public private partnerships, has created the need for new regulatory frameworks, including careful oversight of governance. New business models are introduced, moving away from the annual budget methodology prevalent in the public sector to commercial models extending over longer project lifetimes. However, this introduces new risks. Commercial failure jeopardises an essential public utility for domestic and commercial users, and therefore risk mitigation strategies must be put in place.

CIP programmes for the power sector

CIP offers programmes to tackle the factors described above and create lasting dynamic solutions that can adapt to the rapid evolution of this sector.

  • Management programmes on global best practice in the power sector
  • Professional engineering programmes for engineers, covering the main engineering disciplines in the sector
  • Optimising models for public private partnerships
  • Effective governance for the power sector, including overseeing the public/private sector interface
  • Modernisation of power generation
  • Renewable energy technologies
  • Generation, transmission and distribution: creating optimum strategies for unbundling the three main elements of the electricity network