www.iexindia.com
IEX: Building Power Market for India...
Devesh Singh – Regional Head (SR)
Email: [email protected]
Website: www.iexindia.com
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In this presentation …
• Power Trading in India
• Power Exchange - Mechanism
Trading of Power
Trading of REC
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Who are we ?
Promoters
Joint Equity Partners:
Technology :
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EA 2003 and enabling provisions on Power Market
• Electricity Act 2003– The intent and object of the EA 2003 is to develop power market
through increased competition, more players and protect consumer interests
– Development of Power Market – EA 2003, Section 66, “The Appropriate Commission shall endeavor to promote the development of power market…”, guided by the National Electricity Policy
– Suitable safeguards to prevent adverse effect on competition– Recognize Trading as a distinct activity– Definition under section(2) (47): “Purchase of electricity for resale
thereof”– Adequate and progressive provisions governing open access both :
• to transmission networks (inter-state and intra-state) and • to distribution networks
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Introduction of New Products
• Short & Medium Term transactions for peak/off-peak load balancing
• Duration of Transactions (Few hours to 3 years)
• Hours of Supply
• Round the Clock
• Evening Peak / Morning Peak
• Night Off Peak / After Noon Off Peak
• “As and When Available” Power for balancing Scheduled Interchanges
• “Weekend / Holiday Power”
• Banking of Power
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Indian Power Market
Long TermLong Term Power Purchase AgreementsPower Purchase AgreementsUpto 25 YearsUpto 25 Years
Medium TermMedium Term3 months- 3years3 months- 3years
OTCLicensed traders (42)OTCLicensed traders (42)
Short-TermShort-Term OTC Intraday- 3 monthsOTC Intraday- 3 months
Exchanges Exchanges
Balancing MarketBalancing Market
Intraday - 3 monthsIntraday - 3 months
Unscheduled InterchangeUnscheduled Interchange
1. Intra-day2. DAM3. DAC4. Daily5. Weekly
1. Intra-day2. DAM3. DAC4. Daily5. Weekly
Real TimeReal Time
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What is IEX
On-lineOn-line
NationalNational
AutomatedAutomated
ElectronicElectronic
Standardised Contracts
Standardised Contracts
Central Counterparty
Central Counterparty
Delivery…Delivery…
Exchange as Organized Marketplace Power-specific
•Spot•Intra-Day•Day-ahead
•Forward•Weeks•Months
VoluntaryVoluntary
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IEX capabilities• Spot Auction (Closed or Open) for real time prices• Continuous Trading for Long-term contracts• Automated matching engine • Online risk management system• Online clearing & banking interface for margins & trade proceeds
payment • Derivatives - for Hedging & Price Discovery
⁻ Forwards ⁻ Futures
• Physical or financial settlement
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IEX Self Regulating Institution
• Due diligence before Membership• Networth Criteria• Security deposit & Margins• Voluntary participation • IEX Counterparty • SLDC Clearance
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• NASDAQOMX• Six Sigma Efficiency• “Error Free” operation since inception• Capable for handling
– Day Ahead Auction – Term Ahead Bilateral– Market splitting upto 30 areas– National, Regional and State level Contract– RPS & Certificates Trading
Tried & Tested Global Technology
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IEX: Market Segments…
Day-Ahead Market(Since June,2008)Day-Ahead Market(Since June,2008)
Term-Ahead Market(Since Sep,2009)Term-Ahead Market(Since Sep,2009)
• Intra Day • Day-Ahead Contingency• DailyMatching through Continuous Trade Session
Weekly ContractsMatching through Open Auction
• Intra Day • Day-Ahead Contingency• DailyMatching through Continuous Trade Session
Weekly ContractsMatching through Open Auction
Hourly ContractsMatching through Close Auction*
Hourly ContractsMatching through Close Auction*
* Without Market split feature • Market splitting feature
REC Market(Since February,11)REC Market(Since February,11)
REC Contracts
Matching through Auction*
REC Contracts
Matching through Auction*
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Day-ahead Market
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IEX Bid Areas
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IEX - DAM Product Description [1/2]
• Order Types:– Hourly or Portfolio Orders
• Min 1 hour• Different Price-Quantity Pairs• Partial Execution Possible
– Block Orders• Relational Block Bid• Consecutive hours during the same day
– Customized block bid allowed
• Firm commitment to purchase or sell• Order Characteristics
– SLDC Clearance should be ≥ 1 MW– Minimum Order quantity can be less than 1 MW– Minimum volume step: 0.1 MW– Minimum price step: Rs 1 per MWh ( 0.1p/kWh)
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• Trading Availability– Every Calendar Day
• Bidding– Double sided Closed Auction
• Order Entry / revise /cancel– Entry of orders on D-1 from 10:00 hrs to 12:00 hrs
related to Delivery Day (D day)
• Contract– Clearing Price : Area Clearance Price– Cleared Volume – Total Contract Value: Cleared Volume multiplied by ACP– Final settlement adjusted for any force majeure deviations
• Delivery Point– Periphery of Regional Transmission System in which the grid-connected entity,
is located
IEX - DAM Product Description [2/2]
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Time Line for scheduling of Collective Transaction
10:00 14:00 18:0012:00
Market Participants to place their Bids
PX to send Scheduling Request to NLDC based on margin specified by NLDC
RLDCs/SLDCs to incorporate Collective Transactions in the Daily Schedule
PX to send provisional unconstrained solution to NLDC and flow on TS as informed by NLDC
13:00 15:00
NLDC to check for congestion. In case of congestion shall intimate PX regarding to the period for congestion and available margins
NLDC to confirm acceptance. PX to send files to SLDCs for scheduling
17:30
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Price (Rs./kWh) 0 20 1 2 2.1 3 3.1 4 4.11.1
SalePurchase
Rs/kWh
MW40 80 120
2
3
4
Price
MW
2.5
Portfolio A, MW 20 020 020
SUM, Purchase 120 100 80 80 60 60 40 40 202060
Portfolio C, MW 40 -400 -12020 0 -120-80 -81-60
Portfolio B, MW 6060 2040 40 2040 4040
SUM, Sale 0 0 -40 -120 -120-80 -81-60
Net transaction 120 20 -100 -80-20 -21100 80 80 -1000
0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
Pric
e ($
/MW
h)
0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
Pric
e ($
/MW
h)
1
2
3
4
5
Rs.
/kW
h 2.52.52.5
60
MCP:
MCV (Market clearing volume):
Price Calculation Algorithm ….each hour
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Trader Station: Single Bid
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Trader Station: Block Bid
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• Both Buyers and Sellers to absorb losses– Buyer
• draw less than Contracted Power(Contracted Power – losses)
– Seller• inject more than Contracted Power (Contracted Power + Losses)
• Average Transmission Losses of the Region where the Entity is geographically located
• Additional Losses for Wheeling, if necessary– To be notified in advance by NLDC– Only for Injection
Treatment of Losses
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Treatment of Losses… for buyer
• NR (Regional) Loss: 6%• S1 (State) loss: 4.85 %• Buyer X bids for 100 mw at its respective regional periphery
100 MW
at NR periphery
100 MW
at NR periphery
NR
Loss
6%
NR
Loss
6%
94 MW at S1 periphery
94 MW at S1 periphery
S1
Loss
4.85%
S1
Loss
4.85%
89.441 MW at Buyer End89.441 MW at Buyer End
X
(Buyer)
X
(Buyer)
Bid VolumeBid VolumeScheduled Drawal<= SLDC ClearanceScheduled Drawal<= SLDC Clearance
Maximum Bid= Volume in standing clearance + Regional & State lossesMaximum Bid= Volume in standing clearance + Regional & State losses
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Treatment of Losses… for seller
• SR (Regional) Loss: 6%• A1 (State) loss: 4.85%• Seller Y bids for 100 mw at its respective regional periphery
SR
Loss
6%
SR
Loss
6%
111.14 MW Injected by seller
at its end
111.14 MW Injected by seller
at its end
A1
Loss
4.85%
A1
Loss
4.85%
Y (Seller)Y (Seller)106 MW at state
periphery 106 MW at state
periphery 100 MW at regional periphery
100 MW at regional periphery
Bid VolumeBid VolumeScheduled Generation
<= SLDC ClearanceScheduled Generation
<= SLDC Clearance
Maximum Bid= Volume in standing clearance – Regional & State lossesMaximum Bid= Volume in standing clearance – Regional & State losses
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Congestion Management
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Congestion Management
SR WRS1
50 MWRS 8000
S150 MWRS 8000
B150 MWRS 8500
B150 MWRS 8500
S150 MWRs 8/u
S150 MWRs 8/u
B150 MW
RS 8.5/u
B150 MW
RS 8.5/u
B2150 MWRS 9000
B2150 MWRS 9000
B2150 MWRs 9/u
B2150 MWRs 9/u
S240 MWRS 8500
S240 MWRS 8500
S240 MWRs 8.5/u
S240 MWRs 8.5/u
S350 MWRS 7500
S350 MWRS 7500
S350 MWRs 7.5/u
S350 MWRs 7.5/u
B1100 MWRs 6/u
B1100 MWRs 6/u
S180 MWRs 9.5
S180 MWRs 9.5
B330 MWRs 7/u
B330 MWRs 7/u
B330 MWRS 7000
B330 MWRS 7000
Deficit100 MWDeficit
100 MWS1
80 MWRS 9500
S180 MWRS 9500
B1100 MWRS 6000
B1100 MWRS 6000
S2120 MWRS 8000
S2120 MWRS 8000
S220 MWRs 8/u
S220 MWRs 8/u
S3100 MWRS 5500
S3100 MWRS 5500
S2100 MWRs 5.5/u
S2100 MWRs 5.5/u
Surplus100 MWSurplus100 MW
Required Flow
100 MW
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Congestion Management
SR WR
S150 MWRS 8000
S150 MWRS 8000
B150 MWRS 8500
B150 MWRS 8500
B2150 MWRS 9000
B2150 MWRS 9000
S240 MWRS 8500
S240 MWRS 8500
S350 MWRS 7500
S350 MWRS 7500
B1100 MWRS 6000
B1100 MWRS 6000
S180 MWRS 9500
S180 MWRS 9500
B330 MWRS 7000
B330 MWRS 7000
Deficit100 MWDeficit
100 MW
S220 MWRS 8000
S220 MWRS 8000
S2100 MWRS 5500
S2100 MWRS 5500
Surplus100 MWSurplus100 MW
Allowed Flow
20 MW
Surplus20 MWSurplus20 MW
Highest Seller getting rejectedLowest Buyers getting rejected
Deficit20 MWDeficit20 MW
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Risk Management System
D-1 At 09:30 Hrs : Pre-trade Margin Check.
equal to the initial margins or average of last 7 days’ trading value, whichever is more.
D-1 At 12:30 Hrs : Preliminary Obligation Margin Check
Preliminary Obligation =< Funds Available (incl initial margin)
Block funds.D-1 At 15:30 Hrs : Pay-ins
At D+1 14:00 Hrs : Pay-out.
D-1 At 09:30 Hrs : Pre-trade Margin Check.
equal to the initial margins or average of last 7 days’ trading value, whichever is more.
D-1 At 12:30 Hrs : Preliminary Obligation Margin Check
Preliminary Obligation =< Funds Available (incl initial margin)
Block funds.D-1 At 15:30 Hrs : Pay-ins
At D+1 14:00 Hrs : Pay-out.
Trader Member Facilitator Member
D-1 At 09:30 Hrs : Pre-trade Margin Check. equal to the 100% of the
bid value to be provided by Client directly to IEX in Client Settlement account
D-1 At 15:30 Hrs : Pay-ins
At D+1 14:00 Hrs : Pay-out.
D-1 At 09:30 Hrs : Pre-trade Margin Check. equal to the 100% of the
bid value to be provided by Client directly to IEX in Client Settlement account
D-1 At 15:30 Hrs : Pay-ins
At D+1 14:00 Hrs : Pay-out.
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Performance so far…
IEX won India Power Award for “ Best e-enabled consumer platform”
17th November,2009
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OA status in IndiaNorthern Region
States Buy Sell
Haryana
Punjab
Rajasthan
HP & J&K
Uttaranchal
Delhi & UP
East & North Eastern Region
States Buy Sell
Assam & Bihar
Manipur & Mizoram
Tripura & Sikkim
Jharkhand
Arunachal Pradesh
Meghalaya
Orissa
West Bengal
Western Region
States Buy Sell
Madhya Pradesh
DNH&DD-UT
Gujarat
Chhattisgarh
Maharashtra
Southern Region
States Buy Sell
Andhra Pradesh
Karnataka
Tamil Nadu
KeralaApr 19, 2023
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Participation at IEX
STATE No. of Private GeneratorOpen AccessIndustrial Consumers
Maharashtra 9 0
Rajasthan 10 48
Karnataka 15 0
Andhra Pradesh 10 17
Punjab 3 235
Orissa 1 2
Madhya Pradesh 10 4
Chhattisgarh 28 0
Haryana 1 28
Tamil Nadu 0 384
Gujarat 9 6
Uttarakhand 0 10
Arunachal Pradesh 0 3
Others 14 1
Total 110 738
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Over 2 years of Adequate Liquidity
• 29 State Utility• 990+ Portfolios• 738 Direct consumer• 520+ participants on single day• Cleared Volume :19 Billion Units• DAM Volume Record
59.98 MUs constrained (23rd September ’ 10) 61.58 MUs unconstrained (23rd September 10)
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IEX monthly Average Price
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IEX Monthly Volume
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IEX Dominant Market Share (DAM+TAM)
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Entities eligible for Membership: Inter-State Generating Stations (ISGS) Distribution Licensees State Generating Stations IPPs CPPs and IPPs
(with consent from SLDC)
Open Access Customers(with consent from SLDC)
Electricity Traders / Brokers
Who Can become Members of IEX ?
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IEX Membership Category
Proprietary Member (right to trade and clear on its own account)
Generator- Distribution licensees- IPPs - CPP- MPPs –O A consumers
Proprietary Member (right to trade and clear on its own account)
Generator- Distribution licensees- IPPs - CPP- MPPs –O A consumers
Professional(trade and clear on behalf of its Clients)
NO CREDIT /FINANCING
Professional(trade and clear on behalf of its Clients)
NO CREDIT /FINANCING
Electricity Traders (trade and clear on behalf of its Clients)
CREDIT /FINANCING
Electricity Traders (trade and clear on behalf of its Clients)
CREDIT /FINANCING
ClientsGrid Connected
Generator, Distribution licensees, IPPs, CPP, MPP, OA consumers
Trader Client With valid PPA
ClientsGrid Connected
Generator, Distribution licensees, IPPs, CPP, MPP, OA consumers
Trader Client With valid PPA
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Financial Requirements
Membership Category: Proprietary / Professional Member The financial criteria for payment options available on IEX are:
FeesProfessional & Proprietary &
Electricity Trader(Full Payment Option)
Proprietary member (Light Payment
Option)Admission fee Rs. 35,00,000* Rs. 10,00,000
Interest Free SecurityDeposit
Rs. 25,00,000 Rs. 10,00,000
Annual SubscriptionFees
Rs. 5,00,000 Rs. 2,50,000
Processing Fees Rs. 10,000 Rs. 10,000
TOTAL Rs. 65,10,000 Rs. 22,60,000Exchange Transaction 1p/kWh 2p/kWh
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How to Move Ahead…
► Become Member or Client (of a Member)» Rs 22.6 Lacs +2p/kWh transaction fee or» Rs 65.1 lacs + 1p/kWh transaction fee or» Client @ 1Lakh
► Technical Requirements – Standing Clearance from UTs/State SLDC
» ABT Meters » Sufficient transmission capacity
– Connectivity with exchange can be done in two ways » Internet Immediate» Leased Line
► Start Buying from IEX or Sell surpluses to IEX
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Financing by REC
Members can get finance from Rural Electrification Corporation to fulfill their trade obligations at a nominal interest rate(8.5%).
Procedure : Member will apply to REC for sanction of credit limit. After due verification, REC shall sanction the credit limits Tripartite agreement between IEX – REC – Member Member allowed to bid to exposure limit, net of utilization till date. Each tranche of disbursements by REC to IEX on behalf of the participants
shall be treated as a separate loan for the purpose of determination of loan period, payment of interest, other charges and repayment of loan.
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Renewable Energy Certificates
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Introducing an another option… REC
Sale of Electricity at Market Price in open market
Sale of electricity to DISCOMs at State regulated tariff
Feed-in Tariff[State Regulated Tariff]
REC [Solar & Non-Solar]
Sale of RECs at Power Exchange
* - Weighted Average Pooled Price at which distribution licensee has purchased electricity (including cost of self generation, long-term and short term purchase) in the previous year, but excluding the cost of RE power purchase
Sell to DisComs at Price ≤ Pooled Cost of Power Purchase*
REC OptionElectricity Green Attributes
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Salient Features of REC MechanismParticipation Voluntary
REC Denomination 1 MWh
Validity 365 Days after issuance
Categories 1. Solar REC 2. Non-Solar REC
Trading Platform Power Exchanges only
Banking Not Allowed
Borrowing Not Allowed
Transfer Type Single transfer only , repeated trade of the same certificate is
not possible
Penalty for Non-compliance ‘Forbearance’ Price (Maximum Price)
Price Guarantee Through ‘Floor’ Price (Minimum Price)
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Trading at IEX
Trading DayTrading Day Last Wednesday of every MonthLast Wednesday of every Month
Market ClearingMarket Clearing Closed Double sided auctionClosed Double sided auction
Trading TimeTrading Time 1300-1500 Hrs1300-1500 Hrs
By 1530 HrsBy 1530 Hrs Verification by Central agency for Valid REC by cleared seller at IEXVerification by Central agency for Valid REC by cleared seller at IEX
By 1600 HrsBy 1600 Hrs Central agency confirms RECCentral agency confirms REC
By 1630 HrsBy 1630 Hrs IEX finalizes tradeIEX finalizes trade
By 1700 HrsBy 1700 Hrs Buyer & Sellers informed to Central AgencyBuyer & Sellers informed to Central Agency
By 1800 HrsBy 1800 Hrs Invoice raised (proof of REC trade)Invoice raised (proof of REC trade)
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600 REC Buy @ Rs 2200600 REC Buy @ Rs 2200 200 REC Buy@ Rs 1700200 REC Buy@ Rs 1700
2200
600
Cleared volume : 600 RECs MCP: Rs 2200/RECCleared volume : 600 RECs MCP: Rs 2200/REC
BUY SELL
A 100 REC @ Rs 3900
A 100 REC @ Rs 1500
B 600 REC @ Rs 2200
B 200 REC @ Rs 1700
C 200 REC @ Rs1700
C 300 REC @ Rs 2000
MCP Rs. 2200 /REC, Cleared Volume : 600 RECs
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Accreditation Fee & Charges
Application Processing Fee
Rs. 5000
Accreditation Charges (One Time – for 5 Years)
Rs. 30,000
Annual Charges Rs. 10,000
Re-Validation Fees (After 5 Years
Rs. 15000
Registration Fee & Charges
Application Processing Fee
Rs. 1000
Accreditation Charges (One Time – for 5 Years)
Rs. 5000
Annual Charges Rs. 1000
Re-Validation Fees (After 5 Years
Rs. 5000
State Nodal Agency Central Agency
Issuance Fee & Charges
Fees Per REC issued
Rs. 10
Central Agency
REC - Fee & Charges
Redemption Fee & Charges
Fees Per REC issued
Rs. 10
IEX
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REC - Fee & Charges Impact REC - Fee & Charges Impact
Assumptions:• Project of Capacity = 1 MW
• Capacity Utilisation Factor = 22%
• No. of Units Generated = 19.27 MU
• No. of REC Issued = 1927
Cost Impact of Fee and charges in First Year
Similarly the cost impact (in Paise / Unit) for:
TWO Year THREE Year FOUR Year FIVE Year
2.15 Paise 1.65 Paise 1.32 Paise 1.20 Paise
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REC trade at IEX
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Benefit for RE Generators from REC MechanismBenefit for RE Generators from REC Mechanism
Installed Capacity of a Plant in MW 10.0
Average RE Generation PLF/CUF over a Year 22.0%
Annual Generation in MUs 19.272
Option 1: PPA with State Utility Option 2: Availing REC Benefit
Description Amount (Rs) Description Amount (Rs)
1A. State Regulated Tariff (Rs./kWh) 3.75 2A. Market Rate/APPC for Electricity (Rs./kWh) 2.60
1B. Income from CERs (Rs./kWh)) 0.40 2B. Income from RECs (Rs./kWh)) 2.615
1C. Total Revenue per year (Million Rs.) 79.98 2C. Income from CERs (Rs./kWh)) 0.40
2D. Expenses for availing and trading RECs (Rs/kWh) -0.15
2E. Total Revenue per year (Million Rs.) 105.321
Net benefit derived by an RE Generator from REC Mechanism [2E – 1C] (Amount in Million Rs.) 25.343
% Improvement in cash-flow for RE Generator per year 31.7%
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How to commence …participation on IEX
• New Membership only for those interested in REC trading• Professional REC Member • Proprietary REC Member
• New Clients : No Registration fees ( FY 11-12)• Buyers : Very Simple Process of filing registration with IEX• Sellers : Complete 4-step procedure before registration with IEX
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IEX InitiativesContinuous communication with Users
IEX Daily SMS Service for Trade
Details
IEX Monthly Bulletin
IEX hourly Trade Prices displayed on its website
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Thank You !!!Thank You !!!www.iexindia.com
Promoters
Joint Equity Partners:
Technology :
