GLOBAL TRENDS IN POWER SECTOR Globally, the power sector is undergoing signicant changes with world electricity consumption

projected to double through 2030 and developing countries like India and China poised to be the main contributors to this growth. In addition to the ever-present constraints of nancial market expectations, Operating efficiency, and energy security, the power sector has to face new challenges - climate change which pushes regulators to pass stricter environmental norms, fuel price volatility and the variation of deregulation.

Climate Change Climate change and the need to reduce greenhouse gas emissions by switching to renewable sources of energy will soon become a high priority exercise. Moderate scale solar (PV and thermal) and wind power generation will eventually become an integral source of electric power to the grid. Unfortunately, the availability of these sources of energy is highly unpredictable and the grid needs to be protected against catastrophic failure. These measures include batteries, capacitors and other backup power sources. Many consumers, aware of their carbon footprint, will start demanding greener sources of power irrespective of the location of the power generator. The ability to account for consumption and generation from varied sources will become an important aspect of the electricity grid. More than individual preferences, any global regime for regulation or a carbon tax may spur the shift towards renewable energy.

Cap-and-Trade: The path chosen by advanced countries Cap-and-Trade, or emissions trading, is the main tool used by advanced economies to integrate the environmental cost of CO2 emissions into market mechanisms. This is done by providing economic incentives for achieving emission reductions. Governments set a limit or cap on emissions, and emission permits effectively rights to pollute which are distributed amongst companies, limiting total emissions. Companies that need to increase their emissions must buy or trade credits from those who pollute less,

through a market mechanism. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. The European Union Emission Trading System: An established process. In order to full its commitment to the Kyoto protocol; the European Union launched the Emission Trading System (EU ETS) in 2005. It is the largest multi-national emissions trading scheme in the world, covering over 11,500 energyintensive installations across the EU, which represent close to half of Europes emissions of CO2 .

SMART GRIDS Smart grid implies adding monitoring, analysis, control, and communication capabilities to the national electrical delivery system, in order to optimize usage of the system while reducing energy consumption. The basic objective is to allow Utilities and customers to manage electricity in every element of the T&D system and in households, as efficiently and economically as possible, by providing choice and exibility. Smart grid builds on existing infrastructure, adding communication and control capabilities to optimize the operation of the entire electrical grid. Key benefits of smart grid as compared to traditional grid are: Sophisticated grid monitors and controls anticipate and instantly respond to system problems in order to mitigate outages or power quality problems. Use of technology is expected to facilitate identification and response to man-man or natural disruptions Standardized power and communication interfaces allow customers to interconnect fuel cells, renewable generation and other distributed generation on a simple plug and play basis. Enhancement of customers control on the appliances and equipments in their homes and businesses: Interconnection with energy management systems in smart buildings enables customers to manage their energy use thereby reducing energy costs.

DEMAND SIDE MANAGEMENT Demand side management refers to reducing the power needs at consumer side by using more efficient devices. Moving to CFL lamps from tungsten lamps is perceived to be a significant move in demand side management. The government of Ecuador has decided to provide CFLs to 1.5 million households and the savings created were traded as Carbon certificates.