Introduction to Power Markets” - ESMAP Introduction to Power...• Introduction to Power Markets...
Transcript of Introduction to Power Markets” - ESMAP Introduction to Power...• Introduction to Power Markets...
“ Introduction to Power Markets”
www.iexindia.com
February 14-15, 2011
Rajesh K Mediratta
VP- Business Development
17-Feb-11
Outline
• Introduction to Power Markets
• Indian Power market
• Indian Energy Exchanges – Products
www.iexindia.com
– DAM (Trading Details, Congestion Management, Scheduling)
– TAM (Trading Details, Scheduling)
– REC
• SAARC Energy Exchange – Way forward
Development of Power Market
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Market Models in Power Sector
• Complete Monopoly
• Single-Buyer Model
• Wholesale Competition
• Retail Competition or Direct
Access
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Access
Transmission Co.
Gen.Co.-1
Gen.Co.-2
Gen.Co.-3
Competition in generation
Transmission a natural monopoly therefore regulated
Whole Sale Competition
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Transmission Co.
Dist.Co.-1
Dist.Co.-2
Dist.Co.-3
Consumers
therefore regulated
Distributors can choose who will supply them (Distributor can buy from any GENCO).
Transmission Co.
Gen.Co.-1
Gen.Co.-2
Gen.Co.-3
Competition in Generation
Transmission: Natural monopoly
Retail Competition
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Retailers / Suppliers
Distribution System
Consumers
Retailers / Suppliers can choose who will
supply them
Distribution: A monopoly
End consumer can choose who will supply them
Market Development M
atu
rity
Exchanges
Derivatives
www.iexindia.com72/17/2011POWERGRID
Time
Ma
rke
tM
atu
rity
OTC /
Bilateral
Markets
Individual
B & S
Competition in Electricity Market
To make electricity market competitive following elements are essential:
► Several buyers and sellers to avoid exercise of market power
► Demand and supply responsiveness to price
► Equal access to essential facilities like transmission and distribution
► Liquid and efficient marketplacesMulti-buyer multi-seller model
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► Liquid and efficient marketplacesMulti-buyer multi-seller model
► Open Access both at utility level and consumer level
► Competitive procurement for medium-term and long-term power
► Development of a vibrant trading platform
network ownerssystem operator(s)
regulatorsInfrastructure
Power MarketsThe players and their function
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power exchange(s) Market Places
generatorsConsumers
tradersnon-license members
Market Participants
Role of Power Exchange
► A neutral and easy access to the marketplace
► Standardized Contract
► Offers “law of One Price”
► An automatic interface.
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► An automatic interface.
► Clearing & settlement of deals
► Security by being a safe counterpart
►Information disemination among the participants
Evolution of Electricity Market
2008
1998…1996..
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2001….
2004
APX
UK
European Power Exchanges
Nord Pool
Emerging system price zones?
Market Copling
Consolidation?
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12
OMEL
UK
EEX / Powernext
GME
OMIP OPCOM – SE POOL
Indian Power Market – An Overview
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Ancillary
Market
Evolution of Power Market in India
Capacity
Market
Financial
Derivatives
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Grid Code
Feb.’2000
Market
Settlement System
2002-03
Open Access
2004
Power Exchange
2008
NEW Grid
South
Grid
October 1991
East and Northeast
synchronized
March 2003
West synchronized
With East & Northeast
August 2006
North synchronized
With Central Grid
Five Regional Grids
Two Frequencies
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South
West
North
East
Northeast
Five Regional Grids
Five Frequencies
Central Grid
Installed Capacity 162 GW
MERGING
OF
MARKETS
Indian Power Market
Indian Power Market
Long Term Short Term
BilateralBilateral
Medium
Term
BilateralBilateral
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UIPPA’s2 Trader
Bilateral1 Direct
2 Trader
Exchange
1.Day Ahead
2. Same day
3. FCFS
4. Upto 3
months
5. Banking
Day Ahead
1. Intra day
2. DAC
3. Daily
4. Weekly
5. Monthly
Real
Time
2 Trader
Bilateral1 Direct
2 Trader
Long-term market (88%)
State Sector
generation
45 %
Central Sector
generation
37 %Pvt
Sector
Generation
Electricity Market Segments
Short-term market
(12%)
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9%
Bilateral Market (52.32%)
Through Traders
38.37%
Direct Trading
13.95
UI (30.10 %) Exchange
(17.58 %)
Short-term Market
As per CERC August 2010 MMC Report
Indian Energy Exchanges – Products
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● Day-Ahead Market
● Term-Ahead Market� Intra-day, Day-Ahead Contingency
� Daily
� Weekly
� Monthly (awaiting approval)
● RE Certificates Market
Products on Exchange
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● RE Certificates Market � Commenced since November,2010
� Sellers :RE generators sell certificates
� Buyers: Obligated entities purchase certificates to fulfill RPO
� National market for RE
Day-Ahead Market
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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
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• 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)
• Trading Availability
– Every Calendar Day
• 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
IEX - DAM Product Description [2/2]
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• 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
Time Line for scheduling of Collective Transaction
10:00 14:00 18:0012:00
Market
RLDCs/SLDCs to
incorporate
Collective
Transactions in
13:00 15:00
NLDC to
confirm
17:30
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Market
Participants to
place their Bids
PX to send Scheduling
Request to NLDC based
on margin specified by
NLDC
Transactions in
the Daily
SchedulePX to send
provisional
unconstrained
solution to
NLDC and flow
on TS as
informed by
NLDC
NLDC to check
for congestion.
In case of
congestion shall
intimate PX
regarding to the
period for
congestion and
available
margins
confirm
acceptance. PX
to send files to
SLDCs for
scheduling
Scheduling and open access for collective transactions
discovered in a power exchange through anonymous
simultaneous competitive bidding by buyers and sellers,
presently on day-ahead basis.
Collective transaction:
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presently on day-ahead basis.
• NLDC shall indicate by 11:00 hrs, the list of interfaces/transmission system
on which unconstrained flows are required.
• Power exchange(s) by 13:00 hrs shall furnish interchange on various
interfaces along with information on total drawal and injection in each of
the regions.
NLDC to check for congestion and intimate to the exchange by 14:00 hrs.
Collective transaction:SUBMISSION/PROCESSING OF APPLICATION
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• NLDC to check for congestion and intimate to the exchange by 14:00 hrs.
• Application to be submitted by power exchange(s) to NLDC by 15:00 hrs
each day for transactions to be implemented on the following day.
• Power exchange shall club all buyers within a state in one group and all
sellers in another group for purpose of scheduling by RLDCs.
• NLDCs shall send the details to various RLDCs by 16:00 hrs for final
checking and accommodating them in their schedules. The RLDCs should
confirm acceptance to NLDC by 17:00 hrs.
• NLDC to convey acceptance of scheduling of collective transactions to
power exchange(s) by 17:30 hrs.
Collective transaction:SUBMISSION/PROCESSING OF APPLICATION
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Collective transaction:
SCHEDULING
• Inter-regional schedules to be issued by RLDCs at 18:00 hrs
each day.
• RLDCs shall schedule the Collective Transaction at the
respective periphery of the Regional Entities.
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Collective transaction:COMMERCIAL CONDITIONS
� Non-refundable fee of Rs. 5000/- payable along with each Application.
� Transmission Charges, for use of inter-State transmission system, at the
rate of Rs.30/MWh for the energy approved for transmission for each
point of injection and for each point of drawal.
� Operating Charges @Rs.5000/- per day per Entity involved.
� All Buyers within a State shall be clubbed together into one group and all
Sellers within a State shall be clubbed together into another group by the
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Sellers within a State shall be clubbed together into another group by the
Power Exchange(s).
� Payments of Transmission Charges and Operating Charges shall be made
by the Power Exchange(s) to the NLDC/SLDC (in case of intra-state), by
next working day falling after the day on which its Application was
processed at NLDC.
Price (Rs./kWh) 0 20 1 2 2.1 3 3.1 4 4.11.1 2.5
Portfolio A, MW 20 020 1020
Portfolio C, MW 40 -400 -12020 0 -120-80 -81-60
SUM, Sell 0 0 -40 -120-120-80 -81-60
Net transaction 120 20 -100-80-20 -21100 80 80 -1000
Price Calculation Algorithm ….each hour
20 0
5.0
Portfolio B, MW 6060 2050 40 4040 4040 20
SUM, Purchase 120 100 80 80 70 60 50 40 204060 20
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0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
Pri
ce
($
/MW
h)
0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
Pri
ce
($
/MW
h)
1
2
3
4
5
Rs.
/kW
h
2.52.52.52.52.52.52.52.5
Pri
ce (
Rs.
/MW
h)
Volume (MW)
Purchase
Sell
Terminology
• Bidding Area: A geographical area comprising whole or part of actual PX market area. All bids must be related to a bidding area.
• Market Clearing Price (MCP): The Unconstrained Initial Price consisting of all bidding areas.
• Partial Calculation Area: Smaller Calculation area that arises after splitting the bid area.
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• Area Clearing Price (ACP): A set of bidding areas that gets common price (i.e. no internal bottlenecks) as end result of SAPRI price calculation.
• Bottleneck: A cut where calculated flow exceeds capacity.
• Source: The surplus partition of a calculation area.
• Sink: The deficit partition of a calculation area.
BID AREAS
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Trader Station: Single Bid
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Trader Station: Block Bid
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Linked Block Bid
• Mother-Child Linked Bids
Link different block bids; condition of selection of linked block bid (child block bid)
will depend upon the selection criteria of “linked to” (mother block bid) block bid.
Rules for bid linking :
• A bid (bid B) can only be linked to one other bid (bid A).
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• Both bid A and bid B must be of 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.
Collective transaction:
TREATMENT OF LOSSES
• Inter-state transmission losses to be applied separately on buyers and
sellers.
• To compensate for losses in the system, the sellers shall inject extra power
into the system in addition to the contracted power.
• To compensate for losses, the buyers shall draw less power than
contracted.
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contracted.
• Intra-state transmission losses should also be taken care of in the
schedules by respective SLDCs.
• 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)
Treatment of Losses
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(Contracted Power + Losses)
• Average Transmission Losses of the Region where the Entity is geographicallylocated
• Additional Losses for Wheeling, if necessary– To be notified in advance by NLDC– Only for Injection
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
Bid VolumeScheduled Drawal
<= SLDC Clearance
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100 MW
at NR periphery
NR
Loss
6%
94 MW at S1
periphery
S1
Loss
4.85%
89.441 MW at
Buyer End
X
(Buyer)
<= SLDC Clearance
Maximum Bid= Volume in standing clearance + Regional & State losses
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
Bid VolumeScheduled Generation
<= SLDC Clearance
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SR
Loss
6%
111.14 MW
Injected by seller
at its end
A1
Loss
4.85%
Y
(Seller)106 MW at state
periphery 100 MW at
regional
periphery
Maximum Bid= Volume in standing clearance – Regional & State losses
Open Access Charges
• All Payment related to Open Access Charges
– Payment to be made by Applicant to the Nodal RLDC
– within three working days from the date of acceptance
• Application Fee:: (Rs. 5000/-) to Nodal RLDC
– Along with application (for Advance/FCFS transaction)
– With in 3 working days ( for same day or next day transaction) fromthe date of application submission.
• Transmission charges :: to be in Rs/MWH
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• Transmission charges :: to be in Rs/MWH
– Intra-region (Rs.80/MWh)
– Adjacent Region (Rs.160/MWh)
– Wheeling (Rs.240/MWh)
– STU charges – as specified by respective SERCs or Rs.80/MWh(default)
– Collective transactions:;Rs100/Mwh
Congestion Management
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Congestion Management
SR WR
S1
50 MW
RS 8000
B1
50 MW
RS 8500
B2
150 MW
RS 9000
S2
40 MW
RS 8500
S3
50 MW
RS 7500
B3
30 MW
RS 7000
Deficit
100 MW
S1
80 MW
RS 9500
B1
100 MW
RS 6000
S2
120 MW
RS 8000
S3
100 MW
RS 5500
Surplus
100 MW
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S1
50 MW
Rs 8/u
B1
50 MW
RS 8.5/u
B2
150 MW
Rs 9/u
S2
40 MW
Rs 8.5/u
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
S2
20 MW
Rs 8/u
S2
100 MW
Rs 5.5/u
Required
Flow
100 MW
Congestion Management
SR WR
Deficit
100 MWSurplus
100 MW
Surplus
20 MW
Highest Seller getting rejectedLowest Buyers getting rejected
Deficit
20 MW
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S1
50 MW
RS 8000
B1
50 MW
RS 8500
B2
150 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
S2
20 MW
RS 8000
S2
100 MW
RS 5500
Allowed
Flow
20 MW
Highest Seller getting rejectedLowest Buyers getting rejected
price
area 1
price
area 2
price
area 1 & 2
Congestion Management : Market Splitting
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MWhMWh MWh
Needed capacity for exchange between the areasNeeded capacity for exchange between the areas
in order to achieve the same price in both areasin order to achieve the same price in both areas
Courtesy Nordpool Consultancy
area 1
price
area 2
price
(exchange volume)
area surplus
at
MCP
needed
capacity
available
capacityavailable
capacity
price forprice for
area 2area 2
SystempriceSystemprice
Congestion Management : Market Splitting
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MWh MWh
(exchange volume)
area deficit
at
MCPneeded
capacity
available
capacity
available
capacity
price forprice for
area 1area 1
SystempriceSystemprice
Courtesy Nordpool Consultancy
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
Trader Member Facilitator Member
� D-1 At 09:30 Hrs : Pre-trade Margin Check.
� equal to the 100% of the
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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.
� 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.
Availability Based Tariff (ABT)
Applicable to participants buying/selling in Short-term
Settlement system for contracted sale / purchase of power.
Two parts of triff system
1. Energy charges
for scheduled energy
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2. Imbalance Charges : Unscheduled Interchange Charges for deviation from schedules
10.00
12.00
14.00
16.00
18.00
20.00
U I Rates w.e.f May 03, 2010
UI
Ra
tes
in R
s/U
nit
U I Rates
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0.00
2.00
4.00
6.00
8.00
10.00
49
.00
49
.04
49
.08
49
.12
49
.16
49
.20
49
.24
49
.28
49
.32
49
.36
49
.40
49
.44
49
.48
49
.52
49
.56
49
.60
49
.64
49
.68
49
.72
49
.76
49
.80
49
.84
49
.88
49
.92
49
.96
50
.00
50
.04
50
.08
50
.12
50
.16
50
.20
50
.24
50
.28
UI
Ra
tes
in R
s/U
nit
Frequency in Hz
Balancing Market (UI)
• Third part of ABT
• Frequency linked rates
• Incentives for helping the Grid
• Inculcates self discipline
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• Inculcates self discipline
• Scientific commercial mechanism
• Simple dispute-free weekly settlement
Term-Ahead Market
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TAM Market Segments
Open Auction Continuous
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Open Auction Continuous
Continuous Continuous
Bilateral transaction:
“Bilateral transaction” means a transaction for exchange of energy (MWh)
between a specified buyer and a specified seller, directly or through a
trading licensee or discovered at power exchange through anonymous
bidding, from a specified point of injection to a specified point of drawl for
a fixed or varying quantum of power (MW) for any time period during a
month.
• Scheduling and open access up to three months in advance.
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• Scheduling and open access up to three months in advance.
• Scheduling and open access for the current month up to four days in
advance.
• Scheduling and open access for the day-ahead and up to three days in
advance.
• Scheduling and open access for the same day in the event of a
contingency.
Bilateral transaction: APPLICATION SUBMISSION
• RLDC will check if connectivity with CTU/ ISTS or STU system (as the case
may be) is established, necessary metering , protection, communication
are in place, transfer capability upto the CTU network for power flow of
the quantum of injection/drawal applied for is available on the date of
application and whether the applicant has undertaken to abide by the
Central Electricity Authority (Technical Standards for Connectivity to the
Grid) Regulations, 2007.
• Application to be submitted to::
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• Application to be submitted to::
– Nodal RLDC where point of drawal is situated
– & also to all RLDCs involved in the transaction
• Application Contents
– Details:: Buyer / Seller / Point of injection/ point of drawal /Contracted power at supplier interface/ date/ time period (as per(Format-I-Application for scheduling) along with application fee.
Bilateral transaction: ADVANCE SCHEDULING
• Advance Scheduling – 3 months in advance
• Separate Application –
– Month wise - each transaction
• Time Line for submission
– Last date for submission ( -10 / -5 / 0 days prior to end of currentmonth MO – for transaction in M1, M2, M3)
– Cut-off time of application: 17:30 Hrs. of last day (Day 0)
– Request for concurrence (RLDC) – by 12:00 Hrs. next day (Day 1)
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– Request for concurrence (RLDC) – by 12:00 Hrs. next day (Day 1)
– Concurrence - by 20:00 Hrs (Day 1)
– Congestion Information to Applicant – next day 12:00 Hrs (Day 2)
– Revised Request – next day 11:00 HRs. (Day3)-Format-V-Request forrevision due to congestion)
– E-bidding – in case of Congestion (Day 4)
– Acceptance/Refusal of Scheduling Request – (Day 5)-Format-VI-Acceptance for scheduling
Bilateral transaction: e-bidding procedure
• Invitation of Bids from the concerned applicant– period of congestion– RTS/IR corridor – expected to get over stressed
• Only Registered Users– User ID & Password– Electronic submission – website of CTU– Bid Closing time as specified– Single Price Bid– No Modification/withdrawal once submitted
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– No Modification/withdrawal once submitted• Bid Price• – In addition to Open Access Transmission charges
- Multiples of Rs. 10/ MWh . ( Min. Rs. 10/MWh)• Mandatory - Non-participation – Rejection of Application• Acceptance - Decreasing order of Price Quoted• Equal Price Bids – Pro-rata• Applicant getting approval < request � Charges as quoted• Applicant getting approval=request � Charges as paid by last applicant getting
approval = request
“First-come-first-served” basis
• Scope
– FCFS shall be considered only when transactions are commencing & terminating in the same calender month.
• Separate Application for each month
• To be submitted 4 days prior to date of Scheduling
• Processing time – 3 days on FCFS basis
• Application Received upto 1730 hrs in a day to be processed together –
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• Application Received upto 1730 hrs in a day to be processed together –same priority
• Application Received after 17:30 Hrs. - to be considered as received next day
• Congestion Management – pro-rata
Day-ahead bilateral transaction
• Applications received within 3 days prior to the day of
Scheduling and up to 15:00 Hrs. of the day immediately
preceding the day of scheduling shall be treated as same
priority
• Processing only after processing of the Collective
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• Processing only after processing of the Collective
Transactions of the Power Exchange (s)
• Congestion Management – Pro-rata
Contingency
• Buying Utility/Trader on its behalf to make an Application tothe Nodal RLDC
• To be considered after 1500 hrs of the day immediatelypreceding the day of scheduling
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• In case of intra-day/same day –
scheduling from 6th time block
• Congestion Management – Pro-rata
Incorporation in daily schedules
• Incorporation in Daily Schedules of the RegionalEntities
• Average energy losses - estimated on weekly basis
– RLDCs – ISTS (Inter Control area)
– SLDC – (Intra-State/Control area)
• Resolution of 0.01 MW at each State/inter-Regional
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• Resolution of 0.01 MW at each State/inter-Regionalboundaries.
• Losses on the system to be compensated by Drawingutility (net drawal schedule after deducting losses)
• Ramp-up- commencement of the transaction
• Ramp-down- at the time of termination of thetransaction
MATCHING OF BIDSOPEN UNIFORM AUCTION
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The Sellers
S1S2
S3S4
S5 S6
The BuyersTrade MatchedSelected Sellers : S1,S2,S3,S4 (partial)Selected Buyers : B1,B2,B3,B4MCP :Rs 8000/MWh Volume: 125 MW
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
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B1B2
B3 B4
B6B5
B7
125
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
6,00050 MW @ Rs
5,500
Advantage of Closed Double Sided Closed Bidding
• Better price discovery due to independent bidding by sellers
and buyers.
• Uniform pricing is achieved.
• Non discriminatory pricing i.e. Price is free from any
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• Non discriminatory pricing i.e. Price is free from any
extraneous factors
• Competitive quotes from the participants.
MATCHING OF BIDS CONTINUOUS TRADING
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CONTINUOUS TRADING
TWS Screen
Pending Buy Order Pending Sell Order
Sell 15 MW @ RS 5500/MWhBuy 10 MW @ Rs 4500/MWh
Trading Engine
Buy 10 MWh @ RS 4500/MWh Sell 15 MWh @ RS 5500/MWh
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Buy 10 MW @ Rs 4500/MWh Sell 15 MWh @ Rs 5500/MWh
Buy 10 MWh @ RS 4500/MWh Sell 15 MWh @ RS 5500/MWh
TWS Screen
Pending Buy Order Pending Sell Order
Sell 15 MW @ Rs 5500/MWhBuy 10 MWh @ 4500
Trading Engine
Buy 10 MW @ RS 5000/MWh
Buy 10 MW @ RS 5000/MWh
Buy 10 MW @ RS 4500/MWh
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Buy 10 MW @ 5000/MWh
Buy 10 MW @ RS 5000/MWh
TWS Screen
Pending Buy Order Pending Sell Order
Sell 15 MWh @ 5500
Trading Engine
Sell 15 MW @ Rs 5000/MWh
Buy 10 MWh @ 5000
Buy 10 MWh @ 4500
Sell 15 MWh @ 5500Sell 5 MW @ Rs 5000/MWhBuy 10 MW @ RS 4500/MWH
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Sell 15 MWh @ 5500Sell 15 MW @ RS 5000/MWh
Sell 15 MW @ Rs 5000/MWh
Trade 10 MW @ RS 5000/MWh Bid Modified
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)
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• Day Ahead Contingency and Intra-Day
– Hourly ( DAC-24 hrs & Intraday-18-24)
Region Specific Contracts
Trading of Intra day Contracts
Trading Hours 5 (12-17)
12-13
13-14
Delivery Hour 6 (18-
24)
18-19
19-20
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13-14
14-15
15-16
16-17
19-20
20-21
21-22
22-23
23-24
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
Weekly
Daily
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14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
Treatment of Losses…TAM
• An Example: Seller in NR, Buyer in SR, FBA Contract of 100 MW at Seller’s State
Periphery (Delivery Point).
StateNR SRERState
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State
Buyer
4%84.48 MW at
Buyer end
NR
Loss
3.5%
SR
Loss
5%
ER
Loss
4%
State
Seller
3%
X
(Sell)
Contract Region
(Delivery Point)
103.09 MW
at Seller end
Y
(Buy)100 MW at
State
Periphery
96.5 MW at
Region
Periphery
88 MW at
State
Periphery
92.64 MW at
Region
Periphery
* Loss and charge details are of indicative purposes
Transmission and Operating Charges…TAM
• An Example: Seller in NR, Buyer in SR, Contract of total 1000 MWh at Seller’s State
Periphery (Contract Region). All transmission charges will be paid on the basis of
total MWh at the point of injection.
Charges to be paid
by Seller Charges to be paid by Buyer
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NR
Tx-
Rs.80/MW
h
Op-Rs.
2000/Day
SR
Tx-
Rs.80/MW
h
Op-Rs.
2000/Day
ER
Tx-
Rs.80/MW
h
Op-Rs.
2000/Day
State
Seller
Tx-
Rs.40/MW
h
Op-Rs.
2000/Day
X
(Sell)
Contract Region
(Delivery Point)
Y
(Buy)
State
Buyer
Tx-
Rs.35/MW
h
Op-Rs.
2000/Day
* Loss and charge details are of indicative purposes
DAM & TAM Features
Feature DAM TAM
Contracts Day Ahead Intra-day, Day-Ahead Contingency, Daily,
Weekly
Contract Availability National level Region-wise
Delivery Period Hourly RTC, Off Peak, Day, Evening Peak & Hourly
Matching Close, double-sided Auction Open Auction / Continuous
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Scheduling As per “Procedure for scheduling
of Collective Transactions”
As per “Procedure for scheduling of
Bilateral Transactions”
Delivery point Regional periphery Seller’s State Periphery
Losses & Charges Seller: Its State & Region
Buyer: Its State & Region
Seller: till its state periphery
Buyer: from Seller state to its drawal point
Quantity variation Nil Intra-Day & DAC: Nil
Others: Some contracts upto (-)20%
Trading Procedure
MATCHING
Open Auction•Orders accumulated during call phase
(no matching)
• Orders matched after call period
• Orders are used for calculation common price i.e. Equilibrium Price.
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• 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 of the order received.
Renewable Energy Certificates
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Introducing an another option… REC
Feed-in Tariff[State Regulated Tariff]
REC Option
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Sale of Electricity
at Market Price in
open 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
of Power Purchase*
Electricity Green Attributes
APPROVED RE SOURCES
WindWind
Biomass,Biomass,
Bio Bio –– fuel fuel
co co -- generationgeneration
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SolarSolar
Small HydroSmall Hydro
Municipal WastesMunicipal Wastes
Any type/source Any type/source approved by approved by MNREMNRE
Salient Features of REC Mechanism
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
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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)
Floor Price Forbearance Price
Solar RECs Rs. 12,000/REC Rs. 17,000/REC
RECs Floor/Forbearance Price
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Non-Solar RECs Rs. 1,500/REC Rs. 3,900/REC
1 REC is equivalent to1 MWh
Reference : CERC Order in matter of Petition no. 99/2010, dated March 23, 2010
Process
Procedure for ACCREDITION Procedure for ACCREDITION ((Through State nodal Agency)Through State nodal Agency)
Procedure for REGISTRATION Procedure for REGISTRATION (Through Central Agency NLDC)(Through Central Agency NLDC)
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Procedure for ISSUANCE Procedure for ISSUANCE (Through Central Agency NLDC)(Through Central Agency NLDC)
Procedure for TRADING & REDEMPTIONProcedure for TRADING & REDEMPTION(Through PXs)(Through PXs)
Trading at IEX
Trading Day Last Wednesday of every Month
Market Clearing Closed Double sided auction
Trading Time 1300-1500 Hrs
Verification by Central agency for Valid REC by
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By 1530 HrsVerification by Central agency for Valid REC by
cleared seller at IEX
By 1600 Hrs Central agency confirms REC
By 1630 Hrs IEX finalizes trade
By 1700 Hrs Buyer & Sellers informed to Central Agency
By 1800 Hrs Invoice raised (proof of REC trade)
Performance so far…
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Performance so far…
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IEX won India Power Award for
“ Best e-enabled consumer platform”
Over 2 years of Adequate Liquidity
• 29 State Utility
• 850+ Portfolios
• 641 Direct consumer 84%
16%
IEX
PXI
IEX Market Share (as on January 31, 2011)
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• 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)
Participation at IEX
STATE No. of CPP'sOpen Access
Industrial Consumers
Maharashtra 4 0
Rajasthan 7 22
Karnataka 5 0
Andhra Pradesh 5 17
Punjab 3 209
Orissa 1 2
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Orissa 1 2
Madhya Pradesh 9 3
Chhattisgarh 29 0
Haryana 2 17
Tamilnadu 0 357
Gujarat 6 2
Uttarakhand 0 8
Arunachal Pradesh 0 2
Total 75 641
Increasing Participation
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IEX monthly Average Price
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IEX Monthly Volume
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IEX Day Ahead Market Price & Volume Trend – January’2011
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Prices for various time block- January’2011
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SAARC Energy Exchange ?
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SAARC Energy Exchange ?
Way Forward
• Integrating Markets
• Liquidity
• Diversity
• Better Price Discovery
• Share Shortages/Surpluses
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IEX Capabilities
�The platform can be used for trading :
� Electricity among South Asian Nations
� Associated transmission capacity
� Multi-currency trading
� Certificates for Renewable
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� Certificates for Renewable
� Any Product within Nepal
SAARC Energy Exchange Way Forward ?
• Jurisdictional Issues
� Allowing Grid connected entities from SAARC nations
� Settlement Deviations : Uniformity
� NLDC to act as Nodal Agency for scheduling at national
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� NLDC to act as Nodal Agency for scheduling at national
boundaries
• Imbalance mechanism within each nation
• Nepal-Bhutan-India may be the first to connect markets
SAARC Energy Exchange Similar initiatives
• South African Power Pool (SAPP)
• NORDPOOLNorway:
FinlandNord Pool FinlandHelsinki
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• Central-West Europe
Norway:Nord Pool ASANord Pool Spot ASOslo
DenmarkNord Pool DanmarkFredericia
SwedenNord Pool SverigeStockholm
SAARC Energy Exchange Similar initiatives
Several Initiatives in Central-West Europe
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Thank You !!!Thank You !!!www.iexindia.comwww.iexindia.com
Promoters
Joint Equity Partners:
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Technology :
Key Success Factors
• Control area demarcation & boundary metering
• Simple Design
• Robust transmission system
• Balancing mechanism
• Transparency and non-discriminatory implementation
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• Compliance
Market Design in Europe
• Mostly decentralized markets
• Voluntary Participation
• Day-Ahead Auctions with Implicit Auction of Capacity
• Trading through OTC markets supplemented by DA auctions
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• Explicit auction for others
• DA markets are coupled, intra-day markets are not accessible across the
border
History of the Liberalisation in the Nordic Electricity Market
SWEDEN
FINLAND
• Electricity Market Act, June/Nov 1995
• Full market opening 1998
• Part of Nord Pool area 1998
Rapid electricity market opening in the 1990´s.
NORWAY
• Energy Act, Jan 1991
• Full market opening 1992
• Power Exchange 1993
• Nord Pool Norway-Sweden 1996
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SWEDEN
• Electricity Market Act, Jan 1996
• Full market opening 1999
• Nord Pool Sweden-Norway 1996
DENMARK
• Electricity Act, 1998
• Energy act amandment, June 1999
• Full market opening Jan 2003
• Nord Pool West Denmark 1999, East Denmark 2000
National marketsplaces replaced by
single Nordic market
Source: Statnett
Nordic Market
Nord Pool Nordic TSOs
Spot market
Elspot- DAM
Intra-day Market
Elbas
MW
Price
Spot price
Demand Supply
Bids / Asks MW
Price
Real time balancing market (BM)
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Auction trade system
Single hour contracts and block contracts
Auction trade
Bid areas approximately national TSO areas
Congestion management between bid areas
Total ATC allocated to DAM
Portfolio bidding
Self dispatch
Balance requirements
Data for 2006:
Trade volume: 250 TW h
Market share: ~ 60 %
Continuous trade system
Single hour contracts
Operates after DAM
Remaining ATC allocated to Elbas
Gate closure 1 hour before delivery
Can manages congestion
Germany is included
Portfolio bidding
Self dispatch
Trade volume (2006): ~ 1 TWh
Based on merit order bid curve
Merit order by price only
Demand side bidding
Starting price connected to DAM price
Manages all real time congestions
Separate BMs for all Nordic countries
Step-wise harmonisation
At present Norwegian hydro power
provide most of the balance power.
Separate imbalance prices for TSOs
• Founded: 1 January 1993
• Owners: All 4 TSOs in the Nordic countries
• Locations: HQ – Oslo (Norway), Stockholm (Sweden), Helsinki(Finland), Fredericia (Denmark), Berlin (Germany) and Amsterdam (the Netherlands).
• Participants: >400
• Physical trade (2005): 176 BUs
• Financial trade (2005): 786 BUs
• Clearing of bilateral
market trades: 1, 316 BUs
Nord Pool Group: Facts and Figures
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market trades: 1, 316 BUs
• Employees: >90
• EEX (Germany): 17.3% shares in EEX (European Energy Exchange)
• PWX (France): Licensing – spot market trading system is licensed to France’s Powernext exchange
NP = Nord Pool ASA, Nord Pool Clearing, Nord Pool Consulting NPS = Nord Pool Spot AS, Nord Pool Spot Finland Oy
Source: Nord Pool
Volume of Electricity Transacted through Trading Licensees
and Power Exchanges (inter-State transmission)
20.00
25.00
30.00
35.00
2.77
7.09
Vo
lum
e (
BU
s)
www.iexindia.com
0.00
5.00
10.00
15.00
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
11.8514.19 15.02
20.96 21.92
26.82
Vo
lum
e (
BU
s)
Electricity Transacted by Trading Licensees Electricity Transacted by Power Exchanges
2/17/2011
Price trend in Short Term markets
4.1
6
7.0
4
6.4
1
7.5
7
5.7
3
6.8
9
4.9
9
2
3
4
5
6
7
8
Pri
ce (
Rs/
kW
h)
www.iexindia.com
0
1
2007 2008 2009
Pri
ce (
Rs/
kW
h)
Price of Electricity Transacted through Traders
Price of Electricity Transacted through Power Exchanges
Price of Electricity Transacted through UI
• Weighted Average power price in 2009 less than 2008
• Average Price through Traders higher than transaction in Power Exchange
1022/17/2011