Electricity Grid Operations: Value Chain And Integration

Overview of Electricity

Identify and analyse the Electricity Grid Operations, its value Chain and Integration between Inbound Logistics, Operations, Outbound Logistics and the end user Customer.

Electric power is generated at the power plants and is taken through the grid which is a sophisticated system to manage the electricity for a state. Usually, the network constitutes the substations, the transformers and the electric power lines that link the consumers with their respective electricity producers. The grid helps in ensuring reliability because it enhances a proper planning and coordination of the power supply in the nation. Therefore, the grid is a complex interconnection of the electric lines for commercial purposes which help in efficient management of the electricity to the final customers.

The national grid gives a platform for the standards in the country's energy generation and distribution. The primary standards include ensuring the provision of the reliable power supply that is consistent and flexible. Besides, the grid ensures that the power supplied has incorporated the appropriate safety strategies to minimize the harm to the customer due to increases accuracy in the system (Birbil, Bayindir and Frenk, 2007).

The state electricity grid covers three primary standards in the system. Firstly, it specifies the quality of energy that is used in the nation. It determines the type of power quality whether gas quality or electricity at all stages from the production to the end customers. Secondly, the standards define the structures that are used in the distribution grid. This covers a definition of the materials, the components, and items that are to be utilized in the network such as the electrical lines, towers or the gas pipes. Besides, provision of the quality reliable electricity to the customers, the grid standards also enhances interoperability with other networks such as the residential, commercial and the industrial networks.

The state electricity grid works in a way to ensure that there is the power supply in the country all time for 24 hours a day for 365 days. The nation has put strategies that ensure a balance in demand and supply of the electricity all the time. Electricity is generated at the power plants distributed at various points in the country. The power is carried over to the customers using the transmission and the distribution lines.

During transportation, the electricity is carried at a high voltage because it is economical and minimizes wastage when transported over a long distance. However, the electricity use by customers is at a lower voltage for safety (Montgomery, 2012). Therefore, the carrying of electricity from the power generation plants to the customers has varying voltage levels which are achieved using both the step up and step down transformers.

Day to Day Operations of the National Electricity Grid

Usually, the national grid is maintained by the State balancing authority. This is a body that has the responsibility of ensuring that the supply of electricity matches with the market demand. This organization is critical since it provides the reliability and safety of electric power. The authority provides a smooth running of the company operations by controlling smooth operating conditions which are necessary for offering the services to the customer. The balance maintained by the authority and helps reduce interruptions to the customers through reducing blackouts and enhancing reliability.

The state electricity grid integrates a link between the main businesses process that systematically flow from the power generation, transmission and distribution of sales to customers at various places. The main aim of the state electric supply chain is to balance the client's demand for electricity and its respective supply and at the same maintaining the quality in the system. It targets reducing congestion, increasing reliability and ensuring safety in the system. The state electricity supply system has its supply chain operations that try to achieve these objectives in its business (Lambert, 2008).

The supply chain management of national grid system depicts a range of differences in logistics, supply, and marketing as compared to the traditional supply chain management. Firstly, in the state grid supply system, their regional segmentation. The customers are divided into various segments and are served by the closest supply station. This is economical and reduces transportation cost and losses. Secondly, electricity a good is homogeneous, but its sources can be different. Many energy sources can be converted into electricity such the hydropower, wind power and thermal power. Thirdly, power is perishable, and it is difficult to be stored for a long time, and thus, a balance in demand and supply is critical. Also, the there is little competition in this chain. There is a limited monopoly, and there are many barriers that restrict other players joining the grid (Lambert, 2008).

The supply chain logistics of a state electricity grid system covers the plant selection activities, the network planning which is similar to distribution channel planning in the traditional chain (Cameron, 2014). The logistics of the state grid also achieves forecasting of the information management through load management. The chain is also characterized by the physical distribution of electricity as its primary good through the grid dispatching system. Also, the grid has a system of capacity planning for effectiveness to manage. Besides, the national grid supply chain performs the logistics postponement through network blocking. This gives it a control on the flow of the goods to rich the customers (Vector Consulting Group, 2015). Also, the chain attains the network restructuring of the traditional system through a mechanism of that restructures the grid.

Linkages in Management of Operations and Resources at the Grid

The supply in the link in the operation of the chain for the state electric system entails the supply selection through the fuel choice, the demand planning which is achieved through the power forecasting and the power supplier assessment through the source of energy structure assessment. Also, the link achieves vertical integration in the chain through the deregulation activities. Regarding marketing in state electricity supply chain, there is a billing system which is equivalent to the pricing depending on the amount of power consumed. Marketing in this also has electricity customer management which is in charge of the efficient customer service. Besides, the organization offers after sales service through an efficient revenue management (Dan & Nada, 2007).

Therefore, the national electric grid has its supply chain management in place. The inbound logistics are laid to ensure continuity of the business through consistency in supply. This is an essential aspect in the process of satisfying the customer needs in this business system. The grid system also has their outbound logistics in place. This is also a critical aspect for the smooth running of the business. Marketing is key at this level and helps in attaining a balance between the demand and supply (Evans & William, 2008). The balance is also an essential aspect of ensuring that there are no shortages to some customers and also in minimizing where there is excess production. Thus, the operations of the state electricity supply chain system manage it's smooth running through a balance in the operations, the inbound logistics, and the outbound logistics.

Sustainability is an essential aspect of every business organization. Usually, business sustainability entails various activities that define the process through which the company manages financials in the firm, social aspects and environmental responsibilities, the opportunities and the risks. The three aspects are important for businesses and are usually contained with the aspects of people, profits, and the planet. Sustainability helps businesses to achieve continuity in its operations thus, a very critical aspect for every organization. Also, it also increases the profitability of the business organization which in turn helps in its growth. State electricity supply system has integrated these sustainability aspects not only in profit making but also in people and the planet (Nigel, Stuart & Robert, 2007).

As a strategy to integrate sustainability in the grid business operations, the states have taken a range of strategies into the business.  Firstly, the nations have set sustainability standards for the power suppliers to the grid system (Chase, Jacobs & Aquilano, 2007). These standards include a consideration of the pollution level caused by the type of electricity generation method that the supplier uses or the material that produces the electricity. This has been an effective way of achieving and maintaining sustainability in this business. Thus, this has acted as an incorporation of the sustainability standards into the state’s grid system (Wieland & Wallenburg, 2013).

Sustainability in the State Grid Business

Also, the state electricity grid system considers adoption of the latest sustainable technologies. Nowadays, technology has been a key helper of business enterprises to overcome critical challenges. Cutting edge technology is helping down reduce the operating costs of the business and also increase the customer’s level of satisfaction. Also, the state employs innovation as a way to improve its operations (Miller, Fern & Cardinal, 2007). Thus, this has helped the state to deliver better services and thus, increase the sustainability of this business model.

The management of the state electricity grid systems also faces various sustainability challenges in their operation. For example, achieving a zero–pollution process is difficult and almost impossible. Thus, the managing pollution is only minimized but cannot be eliminated. Also, as a good practice for the organization to give control to the customers, the state faces challenges to implement this in the operations (Schragenheim, Dettmer & Patterson, 2009). Thus, the strategies employed above can only increase the sustainability and reduce the associated challenges but cannot completely curb these challenges.

Conclusion

In conclusion, efficient operation management is a critical aspect of the state electricity grid system. The management of the network aims at providing reliable, consistent electric systems which are safe for use both at domestic level and at the industrial level. The supply chain of the state electricity grid system is similar to the traditional supply management and has a similar target of achieving efficiency timely, quality power at a reduced cost. Also, administration of the grid considers sustainability for effective business operations.

References

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