1. Understanding Electricity MarketsDevesh Singh Regional Manager - SR Email: devesh.singh@iexindia.comwww.iexindia.com

2. Indian Power Market segregation Long Term Long Term Upto 25 Years Upto 25 YearsMedium Term Medium Term 3 months- 3years 3 months- 3yearsShort-Term Short-Term Intraday --3 months Intraday 3 monthsPower Purchase Agreements Power Purchase AgreementsOTC OTC90%Licensed traders (63) Licensed traders (63)OTC Intraday- 3 months OTC Intraday- 3 months Exchanges --Bilateral Transaction Exchanges Bilateral Transaction5%Exchanges --Collective Transaction Exchanges Collective Transaction3%1.Intra day 1.Intra day 2.DAC 2.DAC 3.Daily 3.Daily 4.Weekly 4.Weekly 1. DAM 1. DAMBalancing Market Balancing Market Real Time Real TimeUnscheduled Interchange Unscheduled InterchangeSource: CERC Report on Short term transactions of Electricity in India, April 20132% 3. What is IEX? Voluntary Voluntary Delivery DeliveryOn-line On-line National NationalSpotStandardized Standardized Contracts ContractsAutomated AutomatedIntra-Day Day-aheadForwardWeeks MonthsElectronic Electronic Central Central Counterparty Counterparty Exchange as Organized MarketplacePower-specific 4. Day-ahead Market 5. IEX - DAM Product Description[1/2] Bidding - Double sided Closed Auction Order Types: 15-min block or Portfolio Orders Min 15 Min Different Price-Quantity Pairs Partial Execution Possible Block Orders Relational Block Bid Any 15-min block or series of 15-min blocks during the same day Customized block bid allowed Order Characteristics SLDC Clearance should be 0.1 MW (Subject to state regulations issued by concerned SLDC) Minimum Order quantity cannot be less than 0.1 MW Minimum volume step: 0.1 MW Minimum price step: Rs 1 per MWh ( 0.1p/kWh) 6. IEX - DAM Product Description[2/2] Trading Availability Every Calendar Day Firm commitment to purchase or sell Order Entry / revise /cancel Entry of orders on D-1 from 10:00 hrs to 12:00 hrs related to Delivery Day (D day) Delivery Point Periphery of Regional Transmission System in which the grid-connected entity, is located 7. IEX Day Ahead Market10-1212-13BiddingMatching13-14 Trans Check15 IEX Final Solution1730 NLDC Final Conf18 Schedule by SLDC 8. Price Calculation Algorithm .each block Price (Rs./kWh)0Portfolio A, MW20Portfolio B, MW60Portfolio C, MW40SUM, Purchase SUM, Sell1.12.12.533.1202020100602450404040402000-40-60-80-81120 100808070606050-40-60-80-81200-20-21-8020402020-120805.004004.1-1200Net transaction120 10080-120402020-120 -100-100250Purchase5SellPrice ($/MWh)200 4 3 150Rs./kWhPrice (Rs./MWh)12.5100 2 50 1 0-150Volume (MW)-100-500 MW balance50100150 9. DAM-Single Bid 10. DAM-Block Bid 11. Treatment of Losses 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 12. Treatment of Losses for buyer POC Loss: 1.5 % S1 (State) loss: 4.85 % Buyer X bids for 100 MW at its respective regional periphery Scheduled Drawal Scheduled Drawal