Indian Energy Exchange May 2018 For Public Use In this - - PowerPoint PPT Presentation

Indian Energy Exchange May 2018

For Public Use

In this presentation

Introduction to Indian Power Market Product Portfolio Trading Mechanism Market snapshot Trade @ IEX

Participation Volume Price

Installed Generation Capacity of India

71 112 130 145 165 185 192 197 15 20 21 23 24 26 26 26 4 5 5 5 6 6 7 7 35 39 39 41 41 43 44 45 8 24 28 29 32 39 57 69

132 200 223 243 268 298 327 334 50 100 150 200 250 300 350 400

End of 10th Plan End of 11th Plan 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18*

Capacity (GW) Coal Gas & Diesel Nuclear Hydro RES

Source: CEA

*As on 31st March 2018

3

Power Situation in the Country

Year Installed Capacity

(at the end of FY)

(MW) Peak Met ( MW ) Energy Available (Excluding RE Gen.) (MU) 2011-12 1,99,877 116,191 857,886 2012-13 2,23,344 123,294 911,209 2013-14 2,43,029 129,815 959,829 2014-15 2,67,367 141,160 1,030,785 2015-16 2,98,060 1,48,463 1,090,713 2016-17 3,26,848 1,56,934 1,135,332 2017-18 (Dec’17) 3,34,146 1,60,752 9,07,919

• During the last 5 years, capacity has increased at a CAGR of 10 % i.e. from 199 GW to

327 GW, peak demand met increased at a CAGR of only 6.2% and energy supply has grown at 5.8% CAGR

Source: CEA

Installed capacity has grown at a faster pace compared to demand

4

Indian Power Market Development trend

Single buyer/seller Multi Buyer/Seller OTC Markets Spot trading

• n Exchanges

Improved liquidity and Efficiency

Indian Power Market: Present Status

Long Term

Power Purchase Agreements Upto 25 Years

Medium Term

3 months- 3years

OTC

Licensed traders (61)

Short-Term

OTC Intraday- 3 months Exchanges

Balancing Market

Intraday - 3 months Unscheduled Interchange

• 1. Intra-day
• 2. DAM
• 3. DAC
• 4. Daily
• 5. Weekly

Real Time

89% 6% 3% 2%

IEX Market Segments

Day-Ahead Market

since June,08

• Delivery for next day
• Price discovery: Closed , Double-sided Auction

Term-Ahead Contracts

since Sep,09

• For delivery up to 11 days
• Daily Contracts, Weekly Contracts

Renewable Energy Certificates

since Feb,11

Energy Saving Certificates

since 27 Sep’17

Intraday Market & Day- Ahead Contingency

Round the clock since Jul’15

• Intraday: For Delivery within the same day
• Day Ahead Contingency: Another window for next day
• Gate closure : 3 hours
• Green Attributes as Certificates
• Sellers : RE generators not under feed in tariffs
• Buyers: Obligated entities; 1MWh equivalent to 1 REC
• 1 Ecert= 1 Mtoe( Metric Tonne Oil Equivalent)
• Trading Session on every Tuesday of the Week
• Trading time 1300 hrs to 1500 hrs

7

Auction Continuous

Company Snapshot

97% Market Share + 5000 MW average daily trade

6000+ Participants 4000+ Industries 70+ Commercial 50+ Discoms 400+ Conventional Generators 1500+ RE Participants

Competition Liquidity Transparency

8

Market Share-FY 18 (DAM+TAM) Average Daily Trade- FY18(DAM) Participation-as on 30 April’18

What benefits does the power exchange provide? Nation-wide voluntary access E-trading No counterparty risk Robust Platform Delivery Based contracts

IEX Volume Growth : Strong trend line

2,616 6,214 12,712 14,415 22,811 29,270 28,363 34,397 40,576 46,214

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY18 Cleared Volume (MU)

Electricity Volume

FY 09: from 27 Jun’08-31 Mar’09; Actual Volume of FY 2017-18

10 Source: IEX Data (DAM+TAM)

Product Portfolio

Intra ra Day REC

Day Ahead Market (DAM) Term Ahead Market (TAM) Renewable Energy Certificates (RECs)

Trade for the following day Contracts for every 15 min, closed auction

From 3 Hrs ahead to 11 days in advance

4 types of contracts

• Intraday
• Day Ahead Contingency
• Daily
• Weekly

Trade green attributes of electricity 1 REC = 1 MWh of green energy

Product Segments

Contract Characteristic

Delivery Auction Type Contracts Trade Availability Financial Settlement

Day Ahead Market

Next day Closed Auction 15 min All Days Pay-In- D-1; Pay Out – D+1

Intraday Contracts

0400-2400 Hrs same day Continuous trading Hourly All days Pay in: T+1 Pay out: T+1

Day Ahead Contingency

For next day Continuous trading Hourly All Days; 1500-2300 Pay in: T+1 Pay out: T+2

Daily Contracts

From 4th day to next 7 days Continuous trading Block of Hours (Fixed) All Days; 1200-1500 Pay-In- D-1; Pay Out – D+1

Weekly Contracts

For next week Open Auction Block of Hours (Fixed) Wed & Thurs; 1200-1600 Pay-In- D-1; Pay Out – D+1

TERM AHEAD MARKET

Contract Characteristics

T = Trade D = Delivery

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 The intersection between the aggregated sale and purchase curves defines the market clearing price (MCP) 13 Bid area defined Congestion Management through market splitting and determining Area Clearing Price (ACP) specific to an area Bid types: Portfolio Orders or Block Orders Minimum bid=Re.1 for 0.1MWh Minimum Price & Volume Step = 0.1p * 0.1 MWh

13 Bid Areas

N1 N2 A2 A1 W3 E2 E1 N3 W2 W1 N2 S2 S1 S2 S3

Congestion Management Risk Management Bidding and Matching

Understanding exchange mechanism

Treatment

• f losses

and charges

DAM trading process

Bidding Matching Review corridor and funds availability Result Confirmation Scheduling

Bids for 15- min each or block bids can be placed MCP &MCV calculated Corridor availability and funds verified Collective transaction confirmation by NLDC Final Schedule sent to RLDC for incorporation Final ACV and ACP calculated. Market splitting if congestion

10:00 am to 12:00 pm 12:00 pm to 1:00 pm 1:00 pm to 2:00 pm 3:00 pm 5:30 pm 6:00 pm

Bid Types

• Bids for each 15 min

can be entered

• Varying price and

quantum pairs

• Allow partial execution

Single/Portfolio Bid

• Relational Block Bid

for any 15 min

• Mother or child bid
• No circular links
• No partial execution

Block Bid

DAM-Single Bid

DAM-Block Bid

Rules for bid linking :

• A bid (bid B) can only be

linked to one other bid (bid A)

• Both bid A and bid B must be
• f same type, i.e. sale-sale or

purchase-purchase.

• Bid A and bid B can span any

set of hours independently of each other

• Bid A and bid B can have any

bid price independently of each other.

Price Tick 1 1.1 2 2.1 2.5 3 3.1 3.5 3.8 4 4.1 5 7 9 12 14 17 19 20 Portfolio A 20 20 20 20 20 20 20 10 7 4 Portfolio B 60 60 60 60 50 40 40 40 40 40 40 40 20 20 20 20 20 20 20 20 Portfolio C 70 70 70 70 70 60 50 50 50 50 50 50 50 10 10 10 10 10 10 10 Portfolio D 40 20

• 40
• 60
• 80
• 81
• 85
• 100
• 120
• 120
• 120
• 120
• 120
• 120
• 120
• 120
• 120
• 120

Portfolio E

• 40
• 50
• 50
• 50
• 50
• 60
• 60
• 90
• 90
• 90
• 90
• 90
• 90
• 90
• 90

Portfolio F

• 20
• 20
• 20
• 20
• 20
• 20
• 30
• 40
• 40
• 40
• 40
• 40
• 40
• 40
• 40

190 170 150 150 140 120 110 100 97 94 90 90 70 30 30 30 30 30 30 30

• 40
• 120
• 150
• 151
• 155
• 170
• 200 -210
• 250
• 250
• 250
• 250
• 250
• 250
• 250
• 250

Total Buy, MW Total Sell, MW 190 170 150 150 100

• 40
• 51
• 58
• 76
• 110 -120 -180 -220 -220 -220 -220 -220 -220 -220

Net Transaction, MW

Matching: Model Price Calculation algorithm (Example for a sample 15-min)

2 4 6 8 10 12 14 16 18 20 50 100 150 200 250 300

Demand (Buy) Supply (Sell)

MCP: Rs 2.5 MCV: 120 MW

Congestion Management

SR WR

S1 50 MW RS 8000 B1 50 MW RS 8500 S1 50 MW Rs 8/u B1 50 MW RS 8.5/u B2 150 MW RS 9000 B2 160 MW Rs 9/u S2 40 MW RS 8500 S2 40 MW Rs 8.5/u S3 50 MW RS 7500 S3 50 MW Rs 7.5/u B1 100 MW Rs 6/u S1 80 MW Rs 9.5 B3 30 MW Rs 7/u B3 30 MW RS 7000

Deficit 100 MW

S1 80 MW RS 9500

B1 100 MW RS 6000 S2 120 MW RS 8000

S2 20 MW Rs 8/u

S3 100 MW RS 5500

S2 100 MW Rs 5.5/u

Surplus 100 MW

Required Flow 100 MW

Congestion Management

SR WR

S1 50 MW RS 8000 B1 50 MW RS 8500 B2 160 MW RS 9000 S2 40 MW RS 8500 S3 50 MW RS 7500 B1 100 MW RS 6000 S1 80 MW RS 9500 B3 30 MW RS 7000

Deficit 100 MW

S2 20 MW RS 8000 S2 100 MW RS 5500

Surplus 100 MW

Allowed Flow 20 MW

Surplus 20 MW

Highest Seller getting rejected Lowest Buyers getting rejected

Deficit 20 MW

CERC MMC Report for FY 2016-17

• Better handling of congestion @ IEX

Details of Congestion IEX PXIL A Unconstrained Cleared Volume#(BUs) 41.31 0.29 B Actual Cleared Volume and hence scheduled (BUs) 39.83 0.25 C Volume of electricity that could have been cleared and hence not scheduled because of congestion (BUs) (A-B) 1.48 0.04 D Volume of electricity that could not cleared as % of Unconstrained Cleared Volume 3.59% 3.66%

* This power would have been scheduled had there been no congestion.

Term Ahead Market

26

TAM Market Segments

Open Auction Continuous Continuous Continuous 27

Types of Contracts

• Weekly and Daily

– FBA -- Firm Base – 24 Hrs – FNT -- Firm Night – 8 Hrs (0-7 & 23-24) – FDY -- Firm Day – 11Hrs (7-18) – FPK -- Firm Peak – 5 Hrs (18-23)

• Day Ahead Contingency and Intra-Day

– Hourly ( DAC-24 hrs & Intraday-04-24)

Region Specific Contracts

28

Trading of Intra-day Contracts

1-2 2-3 3-4 4-5 5-6 0:30-1 6-7

4-5 5-6 6-7 7-8 9-10 8-9

10-11 11-12 12-13 13-14

Trading Hours:19.5 (00:30-20:00) Delivery Hours:20 (04-24)

14-15 15-16 16-17 17-18 18-19 19-20 21-22 22-23 23-24 20-21

7-8 9-10 8-9 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Contracts available for delivery on the same day Trading Hour 29

Intra-day & DAC contracts with current trading system

Trading Date

Trading Time Intra-Day contracts DAC contracts

17-04-2016 00:30- 01 H5 to 24 (of 17-04) 17-04-2016 01 - 02 H6 to 24 (of 17-04) 17-04-2016 02 - 03 H7 to 24 (of 17-04) 17-04-2016 03 - 04 H8 to 24 (of 17-04) 17-04-2016 04 - 05 H9 to 24 (of 17-04) 17-04-2016 05 - 06 H10 to 24 (of 17-04) 17-04-2016 06 - 07 H11 to 24 (of 17-04) 17-04-2016 07 - 08 H12 to 24 (of 17-04) 17-04-2016 08 - 09 H13 to 24 (of 17-04) 17-04-2016 09 - 10 H14 to 24 (of 17-04) 17-04-2016 10 - 11 H15 to 24 (of 17-04) 17-04-2016 11 - 12 H16 to 24 (of 17-04) 17-04-2016 12 - 13 H17 to 24 (of 17-04) 17-04-2016 13 - 14 H18 to 24 (of 17-04) 17-04-2016 14 - 15 H19 to 24 (of 17-04) 17-04-2016 15 - 16 H20 to 24 (of 17-04) H1 to 24 (of 18-04) 17-04-2016 16 - 17 H21 to 24 (of 17-04) H1 to 24 (of 18-04) 17-04-2016 17 - 18 H22 to 24 (of 17-04) H1 to 24 (of 18-04) 17-04-2016 18 - 19 H23 to 24 (of 17-04) H1 to 24 (of 18-04) 17-04-2016 19 - 20 H24 to 24 (of 17-04) H1 to 24 (of 18-04) 17-04-2016 20 - 21 H1 to 24 (of 18-04) 17-04-2016 21 - 22 H2 to 24 (of 18-04) 17-04-2016 22 - 23 H3 to 24 (of 18-04) 17/18-04-2016 23.00 - 00:30*

Trading of Weekly & Daily Contracts

SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Weekly Daily

31

Market Place Functionality (TAM)

32

BID MATCHING

Open/Closed Auction

Orders accumulated during call phase (no matching) Orders matched after call period Orders are used for calculation common price i.e. Equilibrium Price. All successful orders matched at Equilibrium Price.

Continuous Trading

Price-time priority based continuous matching The highest Buy order & lowest Sell order gets the priority If the prices are same then priority is given to the time

• f the order received.

UNIFORM AUCTION

The Sellers

S1 S2 S3 S4 S5

S6 B1

B2 B3 B4 B6 B5 B7

The Buyers Trade Matched

Selected Sellers : S1,S2,S3,S4 (partial) Selected Buyers : B1,B2,B3,B4

MCP :Rs 8000/MWh Volume: 125 MW

125

50 MW @ Rs 5,500 40 MW @ Rs 7,000 50 MW @ Rs 8,000 50 MW @ Rs 9,000 50 MW @ Rs 10,000 10 MW @ Rs 6,000 10 MW @ Rs 10,000 40 MW @ Rs 9,000 50 MW @ Rs 8,000 25 MW @ Rs

8,000

25 MW @ Rs

7,000

50 MW @ Rs 6,000 50 MW @ Rs 5,500

CONTINUOUS TRADING PROCESS

TWS Screen

Pending Buy Order Pending Sell Order

Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ Rs 5500/MWh Sell 15 MW @ RS 5500/MWh Buy 10 MW @ Rs 4500/MWh

Trading Engine

Buy 10 MW @ RS 4500/MWh Sell 15 MW @ RS 5500/MWh

TWS Screen

Pending Buy Order Pending Sell Order

Buy 10 MW @ 5000/MWh Sell 15 MW @ Rs 5500/MWh

Buy 10 MW @ 4500

Trading Engine

Buy 10 MW @ RS 5000/MWh Buy 10 MW @ RS 5000/MWh Buy 10 MW @ RS 4500/MWh

Sell 15 MWh @ 5500 TWS Screen

Pending Buy Order Pending Sell Order

Sell 15 MW @ RS 5000/MWh

Sell 15 MW @ 5500

Trading Engine

Sell 15 MW @ Rs 5000/MWh

Buy 10 MW @ 5000 Buy 10 MW @ 4500 Sell 15 MW @ 5500

Sell 5 MW @ Rs 5000/MWh Trade 10 MW @ RS 5000/MWh Buy 10 MW @ RS 4500/MWH

Bid Modified

Risk Management in DAM/TAM

Proprietary/Trading Licensee Members Professional Members

Initial Margin Basis/Additional Margin Initial Margin Basis/Additional Margin

Day-Ahead Market

Margin equal to Last 7 Days Average of Buy turnover As per Bank Balance including Hair Cut Factor

TAM-Intraday

105% of order

• 105% of order Value
• TAM-DAC

100% of order Value

• 100% of order Value -

TAM-Daily

5% of order Value 50% of Trade Value 5% of order Value 50% of Trade Value

TAM-Weekly

5% of order Value 50% of Trade Value 5% of order Value 50% of Trade Value

REC

100% of order Value

• 100% of order Value -

Member Client RMS

Credit facility can be provided by Trader Member to their clients No credit or funding facility by Professional Members to their clients

Timelines for payment of Charges: DAM/TAM

NLDC Charges

• Application Fees is paid in advance = T
• NLDC Scheduling & Operational Charges is paid on T+1
• Transmission Charges CTU is paid on T+1

SLDC Charges

• SLDC Scheduling & Operational Charges is paid on T+1
• Transmission Charges STU is paid on T+1
• Area Transmission Charges (ATU) is paid on T+1
• Area Load Dispatch Centre (ALDC) is paid on T+1

RLDC Charges

• Application Fees/PoC/SLDC/RLDC charges is paid on Within 3 working days of

Acceptance

T = Trade Date

• Both Buyers and Sellers to absorb losses
• Average Transmission Losses of the Region where the Entity is

geographically located.

Treatment of Losses

Draw less than contracted power (Contracted Power – losses) Inject more than contracted power (Contracted Power + Losses)

Buyer Seller

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

100 MW

at NR periphery

POC Loss

1.5%

98.5 MW

at State periphery

State Loss

4.85%

93.72 MW at Buyer End

X

(Buyer) Bid Volume Scheduled Drawal <= SLDC Clearance

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

POC Loss 1.5% 106.69MW

Injected by seller

State Loss 4.85% Y (Seller)

101.52MW at state periphery

100 MW at regional periphery

Bid Volume Scheduled Generation <= SLDC Clearance

Maximum Bid= Volume in standing clearance – Regional & State losses

Market Snapshot

Participation Volume Prices

Key statistics: Electricity & REC Market

Market Share

(FY16-17)

State Utilities Generators Industrial Consumers Average Daily Volume

57.6% 17 States I 5 UTs 1,040

>2 Crore RECs Highest: 32,39,142 RECs

ELECTRICITY REC 97% 29 States I 5 UTs 440 >120,000 MWh

Highest : 172,447 MWh

3,046 4000

IEX Data as on 30 April, 2018

Increasing Participation

Participation

26 8 6 343 10 489 32 123 2 537 21 58 18 32 3 48 37 20 1 1 824 20 249 63 1 25 27 476 4

Consumer: 4000 Generator: 440

Participation at IEX

430 7 5 14 35 1 1

7

224 12 3

Open Access Status across Indian States

States Generator Consumer Haryana

 

Punjab

 

Rajasthan

 

HP

 

J&K

 

Uttaranchal

 

Delhi

 

UP

 

States Generator Consumer M.P

 

DNH & DD

 

Gujarat

 

Chhattisgarh

 

Maharashtra

 

States Generator Consumer Assam

 

Bihar

 

Manipur/Mizo

 

Tripura/Sikkim

 

Jharkhand

 

A.P.

 

Meghalaya

 

Orissa

 

West Bengal

 

States Generator Consumer A.P

 

Karnataka

 

Tamil Nadu

 

Kerala

 

Northern Region Southern Region Western Region East & North Eastern Region

 

Allowed Not Allowed

Industrial segments with IEX

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

CERC MMC Report for FY 2016-17

Prices

*Average Price of Collective Transactions

IEX monthly Average MCP in DAM

IEX Monthly Prices

(FY 17-18)

Quarterly Prices FY 2017-18

Prices for various time block

APRIL 2018

DAM Cleared Volume v/s MCP

Volume

IEX Monthly Cleared Volume

IEX Day Ahead Market Price & Volume Trend

April 2018

TAM: Performance so far

Weekly Day-ahead Contingency Intraday Daily

2,929,652 MWh 15,08,969 MWh 12,97,500 MWh

5,96,416 MWh Total Volume traded

6,332 MUs

TAM Monthly Snapshot –April’18

Contracts

Weekly Intraday Day-Ahead Contingency Daily

Total Volume (MWh) 43,512 40,367 12,220 27,318 Max Price (Rs./kWh) 4.42 8.00 6.59 4.42 Min Price (Rs./kWh) 4.00 3.30 3.10 4.42

Trade @ 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

Who Can become Members of IEX ?

IEX Membership Types

Proprietary Member

Right to trade and clear on its

• wn account

Generator- Distribution licensees- IPPs - CPP- MPPs –O A consumers

Professional Member

Trade and clear

• n behalf of its

Clients NO CREDIT /FINANCING

Electricity Traders

Trade and clear

• n behalf of its

Clients CREDIT /FINANCING

Clients

Grid Connected Generator, Distribution licensees, IPPs, CPP, MPP, OA consumers Trader Client With valid PPA

Financial Requirements

Membership Category: Proprietary / Professional Member The financial criteria for payment options available on IEX are:

Fees Professional & Proprietary & Electricity Trader (Full Payment Option) Proprietary member (Light Payment Option)

Admission fee

• Rs. 35,00,000
• Rs. 10,00,000

Interest Free Security Deposit

• Rs. 25,00,000
• Rs. 10,00,000

Annual Subscription Fees

• Rs. 5,00,000
• Rs. 2,50,000

Processing Fees

• Rs. 10,000
• Rs. 10,000

TOTAL

• Rs. 65,10,000
• Rs. 22,60,000

Exchange Transaction 2p/kWh 3p/kWh

How to Move Ahead…

Become Member or Client (of a Member)…options

• Rs 22.6 Lacs +3p/kWh transaction fee
• Rs 65.1 lacs + 2p/kWh transaction fee
• 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

Registration

PRE -TRADING SELECTION OF MEMBER 1 week METERING (unless already done)

 Special Energy Meter

0.5-3

Months

SLDC Clearance/NOC

 NOC from respective SLDC

1 Month Registration at IEX

 Client registration for each point of drawal  Unique id created in Exchange system

0.15

Month

Member Related Activities Exchange Related Activities

Register for IEX Monthly Bulletin Register for Daily SMS alerts Use IEX Mobile Application to track prices Follow us @IEXLtd

Thank You

www.iexindia.com