Electricity Market Email: info@iexindia.com May15 www.iexindia.com - PowerPoint PPT Presentation

Electricity Market Email: info@iexindia.com May’15 www.iexindia.com

In this presentation Introduction to Indian Power Market Product Portfolio Trading Mechanism Market Snapshot Participation Volume Price Trade @ IEX

Indian Power Market Development trend Spot trading on Exchanges OTC Markets Multi Buyer/Seller Single buyer/seller Improved liquidity and Efficiency

Indian Power Market: Present Status Long Term Power Purchase Agreements 89% Upto 25 Years OTC Medium Term Licensed traders (61) 6% 3 months- 3years OTC Intraday- 3 months Short-Term Exchanges Intraday - 3 months 1. Intra-day 3% 2. DAM 3. DAC 4. Daily 5. Weekly Balancing Market Unscheduled Interchange 2% Real Time

Company Snapshot 94% Market Share ~80,000MWh average daily trade 3400+ Participants 3000+ Industries Transparency Liquidity Competition

Growth in Volume Volume across product portfolio

Participation Increasing Participation

Intra ra Day REC Product Portfolio

IEX Market Segments Delivery-based Contracts Closed , Double-sided Auction Day-Ahead 10-12 am bidding Market Each 15-min block , 0.1 MW min NOC required since June,08 Day-Ahead Contingency – Another window 3-5pm Term-Ahead Intra-Day - for the same day starting 2 pm Market Daily- for rolling seven days (delivery starting after 4 days) since Sep,09 Weekly - for 1 week (Monday-Sunday) Green Attributes as Certificates Renewable Energy Sellers : RE generators not under feed in tariffs Certificates Buyers: Obligated entities since Feb,11 1MWh equivalent to 1 REC Next… Energy Saving Certificates Auction Continuous

DAM and TAM Trading Timeline

Trading Mechanism

Features of Day Ahead Market A closed double-sided anonymous auction for each 15-min time block for the following day N1 N3 The intersection between the aggregated sale and purchase curves defines the market clearing A2 N2 N2 price (MCP) A1 E1 W1 W3 12 Bid area defined W2 E2 Congestion Management through market splitting S1 and determining Area Clearing Price (ACP) specific to an area S2 Bid types: Portfolio Orders or Block Orders Minimum bid=Re.1 for 0.1MWh 12 Bid Areas Minimum Price & Volume Step = 0.1p * 0.1 MWh

Understanding exchange mechanism Bidding and Matching Risk Management Congestion Management Treatment of losses and charges

DAM trading process Review corridor Bidding Matching and funds Result Confirmation Scheduling availability 10:00 am to 12:00 pm to 1:00 pm to 3:00 pm 5:30 pm 6:00 pm 12:00 pm 1:00 pm 2:00 pm MCP Bids for Corridor Final ACV Collective Final 15- min &MCV availability and ACP transaction Schedule sent each or calculated and funds confirmation calculated. to RLDC for block bids verified Market by NLDC incorporation can be splitting if placed congestion

Model Price Calculation algorithm Price Tick (Rs.) 0 1 1.1 2 2.1 2.5 3 3.1 4 4.1 5 --- --- ---- 20 20 20 20 20 20 20 20 10 0 0 0 0 0 0 0 Bid Quantum Portfolio A, MW by different 60 60 60 60 50 40 40 40 40 40 20 20 20 20 20 Portfolio B, MW portfolios 40 20 0 0 -40 -60 -80 -81 -120 -120 -120 -120 -120 -120 -120 Portfolio C, MW 120 100 80 80 70 60 60 50 40 40 20 20 20 20 20 Total Buy Quantum received, MW 0 0 0 0 -40 -60 -80 -81 -120 -120 -120 -120 -120 -120 -120 Total Sell Quantum received, MW 120 100 80 80 20 0 -20 -21 -80 -100 -100 -100 -100 -100 -100 Net Transaction, MW Price Supply Demand (Sell) (Buy) Market clearing price (MCP) 2.5 MW 60 Volume Market Clearing Volume (MCV)

BID MATCHING Open/Closed Continuous Auction Trading Orders accumulated during Price-time priority based call phase (no matching) continuous matching Orders matched after call period The highest Buy order & lowest Sell order gets the Orders are used for priority calculation common price i.e. Equilibrium Price. If the prices are same then All successful orders priority is given to the time matched at Equilibrium of the order received. Price.

TWS Screen CONTINUOUS TRADING PROCESS Pending Buy Order Pending Sell Order Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ RS 5500/MWh Trading Engine Buy 10 MW @ RS 4500/MWh Sell 15 MW @ RS 5500/MWh Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ Rs 5500/MWh

TWS Screen Pending Buy Order Pending Sell Order Buy 10 MW @ RS 5000/MWh Sell 15 MW @ Rs 5500/MWh Buy 10 MW @ 4500 Buy 10 MW @ RS 4500/MWh Trading Engine Buy 10 MW @ RS 5000/MWh Buy 10 MW @ 5000/MWh

TWS Screen Pending Buy Order Pending Sell Order Buy 10 MW @ RS 4500/MWH Sell 5 MW @ Rs 5000/MWh Buy 10 MW @ 5000 Sell 15 MW @ 5500 Sell 15 MW @ 5500 Buy 10 MW @ 4500 Trading Engine Sell 15 MW @ Rs 5000/MWh Trade 10 MW @ RS 5000/MWh Bid Modified Sell 15 MW @ RS 5000/MWh Sell 15 MWh @ 5500

Congestion Management SR WR S3 S1 Deficit Surplus B2 B3 S2 S1 B1 B1 S2 S3 50 MW 50 MW 150 MW 30 MW 40 MW 80 MW 100 MW 100 MW 120 MW 50 MW RS 7500 RS 8000 100 MW RS 9000 100 MW RS 8000 RS 5500 RS 6000 RS 8500 RS 7000 RS 9500 RS 8500 Required B2 Flow 160 MW S3 S2 Rs 9/u 100 MW 50 MW 100 MW Rs 7.5/u Rs 5.5/u B1 S1 S2 50 MW 50 MW 20 MW RS 8.5/u Rs 8/u Rs 8/u S2 B1 S1 B3 40 MW 100 MW 80 MW 30 MW Rs 8.5/u Rs 6/u Rs 9.5 Rs 7/u

Congestion Management SR WR Deficit Deficit Surplus Surplus 100 MW 20 MW 100 MW 20 MW Lowest Buyers getting rejected Highest Seller getting rejected B2 Allowed 160 MW Flow RS 9000 S3 S2 20 MW 50 MW 100 MW RS 7500 RS 5500 B1 50 MW S1 S2 RS 8500 50 MW 20 MW RS 8000 RS 8000 S2 B1 S1 B3 40 MW 100 MW 80 MW 30 MW RS 8500 RS 6000 RS 9500 RS 7000

Treatment of Losses • Both Buyers and Sellers to absorb losses Draw less than Buyer contracted power ( Contracted Power – losses) Inject more than contracted power Seller (Contracted Power + Losses) • Average Transmission Losses of the Region where the Entity is geographically located.

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 Bid Volume <= SLDC Clearance POC State X 100 MW 98.5 MW Loss Loss 93.72 MW at (Buyer) at State at NR Buyer End periphery 1.5% periphery 4.85% Maximum Bid= Volume in standing clearance + Regional & State losses

Treatment of Losses… for seller • POC Loss: 1.5% • State loss: 4.85% • Seller Y bids for 100 MW at its respective regional periphery Scheduled Generation Bid Volume <= SLDC Clearance POC State Y 106.69MW 101.52MW Loss Loss (Seller) 100 MW at at state Injected by regional periphery seller periphery 1.5% 4.85% Maximum Bid= Volume in standing clearance – Regional & State losses

Market Snapshot Participation Volume Prices

Key statistics: Electricity & REC Market ELECTRICITY REC Market Share 96% 77% (FY 13-14) State 29 States I 5 UTs 16 States I 5 UTs Utilities 301 701 Generators Industrial 3069 1604 Consumers ~80,000 MWh >3 million RECs Average Daily Volume Highest : 131,356 MWh Highest: 4,23,731 RECs IEX Data as on 30 April, 2015

Participation at IEX No Open Access Consumers Generators 0 6 Uttar Pradesh Uttar Pradesh 6 3 402 8 Jammu & Kashmir Delhi 79 1 Himachal Pradesh Bihar 4 1 273 4 Delhi Jharkhand 216 25 Bihar Tamil Nadu Goa Kerala 398 22 33 16 3 3 1 2 Jharkhand Union Territories 1 48 0 2 Sikkim 7 15 7 23 DVC Chattisgarh NE States (except Meghalaya) West Bengal 672 38 59 57 Union Territories 0 1 Consumer: 3069 (except Daman & Generator: 301 761 2 Diu) NE States (except 1 0 Assam, Meghalaya 1 & Arunachal Pradesh)

Industrial segments with IEX Cotton Paper 1% 3% Others Cement 9% 4% Textile Auto 29% Components 6% Chemical 9% Manufacturer 15% Metal 24%

Prices CERC MMC Report for FY 2013-14

IEX monthly Average MCP in DAM

DAM Cleared Volume v/s MCP Volume

IEX Monthly Cleared Volume

Trade @ IEX

Who Can become Members of IEX ? 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

IEX Membership Types Proprietary Professional Electricity Member Member Traders Right to trade Trade and clear Trade and clear and clear on its on behalf of its on behalf of its own account Clients Clients Generator- Distribution NO CREDIT CREDIT licensees- IPPs - /FINANCING /FINANCING CPP- MPPs – O A consumers Clients Grid Connected Generator, Distribution licensees, IPPs, CPP, MPP, OA consumers Trader Client With valid PPA