Advantages of interconnected Systems: i) Reduced Overall installed Capacity: Inter connected power systems reduce the overall requirement of installed capacity for a given load area. With interconnection between power systems, peak demand in an area is meet by importing power from neighboring area. Thus, it also reduces investment and fulfills the peak demand. ii) Better Utilization Hydro Power: In combined power system, hydro power can be utilized in more effective way. During rainy season, hydro power plant can be utilized, while during draught periods, steam power plant can be used as base load plant. iii) Reliability of Supply: The reliability of steam power plants depends upon the coal supply and that of hydro power plant depends upon the stream flow. Due to greater diversity, a combined operation of various types of power plant is more reliable than individual power plant. iv) High unit size possible: Generating units of higher unit capacity (200MW, 500MW etc) can be installed and operated economically. v) Improved quality of voltage and frequency: Isolated power systems have higher frequency fluctuations with change in load. With inter connections, the system becomes stronger & the effect of load is reduced. vi) Exchange of peak loads: If the load curve of power station shows a peak demand that is greater than the rated capacity of the plant, then the excess load can be shared by other stations connected with it. vii)Use of older Plants: The interconnected system makes it possible to use older and less efficient plants to carry peak loads of short durations. Although such plants may be inadequate when used alone, yet they have sufficient capacity to carry short peaks up load when inter-connected with other modern plants. viii) Ensure Economical operation: The interconnected system makes the operation of concerned power station quite economical. It is because sharing of loads among the stations is arranged in such a way that the plants having higher cost of generation work for peak load hours only. ix) Increases Diversity factor: The maximum demand on the system is reduced because load curves of different inter-connected stations are different. So, diversity factor of the system is improved, thereby increasing the effective capacity of the system. x) Increases load factor: The load factor and efficiency of operation are improved. xi) Reduces Plant Reserve capacity: Every power station is required to have a standby unit for emergencies. However when several power stations are connected in parallel, the reserve capacity of the system is mush reduced. This increases efficiency of the system. xii)Better utilization of natural resources: Due to interconnection, there is optimum utilization of available natural resources in the country.