Emerging Power Markets By:- Bikram Singh AVP (Business - - PowerPoint PPT Presentation

Emerging Power Markets

• By:-

Bikram Singh AVP (Business Development)

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• Indian Power Market

Long Term Short Term

Bilateral Bilateral

Medium Term

Bilateral Bilateral

• PPA’s

2 Trader

Bilateral

1 Direct 2 Trader

Exchange

1.Day Ahead

• 2. Same day
• 3. FCFS
• 4. Upto 3

months

• 5. Banking

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1. Intra day 2. DAC 3. Daily 4. Weekly 5. Monthly

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2 Trader

Bilateral

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Day-Ahead Market

(Since June,2008)

Term-Ahead Market

(Since Sep,2009)

Intra Day Day-Ahead Contingency Daily

Matching through

Hourly Contracts Matching through

REC Market

(Launched in Nov, 2010)

REC Contracts

• Matching through

Continuous Trade Session

Weekly Contracts

Matching through Open Auction

Matching through Close Auction*

• Matching through

Auction*

Day-ahead Market

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• Order Types:

– Hourly or Portfolio Orders

• Min 1 hour
• Different Price-Quantity Pairs
• Partial Execution Possible

– Block Orders

• Relational Block Bid
• 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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• 29 State Utility

850+ Portfolios

• 641 Direct consumer

83%

17%

IEX PXI

IEX Market Share (as on January 31, 2011)

• 641 Direct consumer
• 505+ participants on single day
• Cleared Volume :17.5 Billion Units
• DAM Volume Record

59.98 MUs constrained (23rd September ’ 10) 61.58 MUs unconstrained (23rd September 10)

: :

STATE

• No. of CPP's

Open Access Industrial Consumers Maharashtra 4 Rajasthan 7 22 Karnataka 5 Andhra Pradesh 5 17 Punjab 3 209 Orissa 1 2

• Orissa

1 2 Madhya Pradesh 9 3 Chhattisgarh '9 Haryana 2 17 Tamilnadu +,0 Gujarat 6 2 8 > E Arunachal Pradesh 2

Total 75 641

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MATCHING OF BIDS

OPEN UNIFORM AUCTION

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MCP :Rs 8000/MWh Volume: 125 MW

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Weekly

Day-ahead Contingency

1,157,030 MWh 32,156 MWh Total Volume traded

• Intraday

Daily

15,671 MWh 18,000 MWh Total Volume traded 1,222,857 MWh

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REC Option

Electricity Green Attributes

• Sale of Electricity

at Market Price in

• pen market

Sale of electricity to DISCOMs at 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

• f Power Purchase*

Green Attributes

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Participation 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) Price Discovery Mechanism Closed Double-sided Auction Trading Calendar Last Wednesday of the month (T day) Trading Period 1300-1500 hrs (T day) Market Clearing 1700 hrs(T day)

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• Opening of ‘Open Access’

" Understanding that ‘OPEN ACCESS’ is win-win for States, Industries and Consumers " Imposition of Sec 11 by States " Right open access policies

• Open Access Consumers need different treatment than generators

" Procedures for open access in distribution to be published by Discoms " Requirement of ABT meters should not be essential for consumers

• " Requirement of ABT meters should not be essential for consumers

" Monopolistic pricing of ABT meters in some States " Cross-subsidy surcharge

• Should be between 20-50 p/kWh
• Should be 0 when Discom is unable to supply (legally correct position)

• Northern Region

States Buy Sell Haryana Punjab Rajasthan HP & J&K Uttaranchal

East & North Eastern Region

States Buy Sell Assam & Bihar Manipur & Mizoram Tripura & Sikkim Jharkhand Arunachal Pradesh No app Meghalaya Orissa

• Uttaranchal

Delhi & UP Orissa West Bengal No app

Western Region

States Buy Sell Madhya Pradesh DNH&DD-UT Gujarat Chhattisgarh No app Maharashtra

Southern Region

States Buy Sell Andhra Pradesh Karnataka Tamil Nadu Kerala

)>DI1J )>DI1J

• Adequate Transmission Corridor

" More merchant capacity will be added in future " More of short and medium term transactions will take place. " Therefore …. Transmission planning should inherently include margins for medium and short-term open access. " The money collected from STOA should be utilized for adding

• " The money collected from STOA should be utilized for adding

new capacities for Short-term transactions.

Introduction of longer duration products

" Approval from CERC for monthly products. " Design of products

Payment Security Vs Cost of overheads like LC, BG etc Flexibility in delivery National products preferred – change in transmission pricing from April,11

Hedging of price & volume risks – through futures

)>DI@J )>DI@J Implementation of Section 86(1)(a)

" The State Commission shall discharge the following functions, namely:

a. determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State: PROVIDED that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;

• Rationale

OA category consumers (Bulk consumers) should pay for Long-Range Marginal Cost of power. They will have choice of procuring power on their own either as CPP or IPP or purchase from market or pay LRMC to licensee .

Action Required

Requires mention in Tariff Policy for its implementation.

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