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FAQs ON POWER TRADING What is power trading? Power trading inherently means a transaction where the price of power is negotiable and options exist about whom to trade with and for what quantum. How can one trade power? Through a Professional Trading member like Alankit Imaginations Ltd or become a direct member of the Exchange if one has a minimum required net worth of Rs. 150 Lacs. What are the Pre Requisites for trading at the Energy Exchange?

Grid connectivity SLDC concurrence required for application to nodal RLDC Margins required for purchaser

What is the minimum power unit that one can trade? Contract Size: Minimum 1 MWh Minimum volume step: 0.1 MWh Minimum price step: Rs 1 per MWh What are trading hours? Entry for orders related to Delivery Day (D day) possible on D-1 from 10:00 hrs to 12:00 hrs. (every calendar day) When is the delivery done? It’s a Day Ahead market where Trading is done on D-1 day and delivery is done on D day. When is the trade finalized? 24 hour prices at 15:00 hrs of D-1 day What is the Delivery Point? The Delivery is done on the Periphery of Regional Transmission System in which the grid-connected exchange entity is located. How secured is the entire Transaction?

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It is a very secured transaction as the IEX act as counter party How is power trading beneficial? It serves as a good instrument between the generating facilities who could enhance electricity generation at different points of time during different seasons and those electricity distribution companies or large consumers who need such power, in a dynamic way, in varying magnitudes. This platform, therefore, serves the needs of both - those who can produce and supply and those who need. What is the use of Energy Exchange? Being a demutualised, nationwide, electronic exchange it offers an instrument to hedge price risk more efficiently at a reasonably priced cost. The focal point is ensuring fair trade practices to increase market reliability. It aims to help the distribution licensees in precisely adjusting portfolio as a function of consumption or generation profile and make the sector more pulsating and unlock untapped power. Its endeavor is to provide a market for captive, co-generation and renewable power to sell power. Who regulates this process? The physical market of electricity would be regulated by CERC. Power exchange maintains strict anonymity about market participants which prevents exercise of market power and conspiracy. How transparent is the entire trading process? Market transparency would be ensured, by computerized trading system and immediate dissemination of all relevant information related to any trade. Who can bid the price of power unit? The bids can be submitted by both buyers and sellers of electricity so as to eliminate the chances of market domination by one of them. The buyer or the seller can bid the price through the trading member of the exchange (e.g- Alankit Imaginations Ltd) How is the bidding done? The bid is done for the Day ahead spot market. The spot physical market defined for power exchange is a day ahead market (contracting for the next day). The buyer or the seller has to quote the price of the power unit for the day ahead to its trading member (e.g-Alankit Imaginations Ltd) who would put the bid on the energy exchange on behalf of the client.

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How the price is finally determined? The price is determined through Fosters Competition. It brings the various players, connected through a grid covering large geographical area, into a common marketplace and thus reduces the possibility of scarcity price enjoyed by sellers in a deficit area, and unfair consumer surplus enjoyed by buyers in a surplus area. A uniform price is determined through the matching of Aggregate Demand and supply for the same product offered at the same time and place. Who has the Clearing and Guarantee System? The power exchange would have clearing system. It means, once a trade is cleared, exchange would become buyer to all sellers and seller to all buyers.. How can one get the State Clearance in connection with Open Access License? State Utilities and intra-State Entities proposing to participate through Power Exchange(s) shall not be permitted by the Power Exchange(s) without “Concurrence” or “No Objection” or “Prior Standing Clearance”, from the respective State Load Dispatch Centers (SLDCs), except in case of “Concurrence, or “No Objection” or “Prior Standing Clearance”, as the case may be, is deemed to have been granted by the concerned SLDC in accordance with second provision to clause 4 of Regulation 8. This has to be done by the client itself. What are the fixed charges and the operating charges at the State and Regional Level? In addition to 1 paisa per unit of IEX charges, transmission charges for use of inter-State transmission system at the rate of Rs.100/MWh (10 paisa per unit) for the energy approved for each point of injection and for each point of drawl Operating charges @ Rs.5000/- per day per Entity are also involved. However, 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 Power Exchange(s). NLDC shall count each buyer group and each seller group for each of the Power Exchange(s) as separate Entities for Scheduling and levy of Operating Charges What are the Transmission Charges?

a) Regional transmission system which is as per Central Electricity Regulatory Commission Regulations,2008

b) State transmission system which is as per the State electricity Regulatory Commission Regulation,2008.

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What is the exact figure of transmission losses? The losses are mainly at State and regional level transmission. Inter-State transmission losses would be applied separately on Buyers as well as Sellers. Further, to compensate for the losses in the inter-State transmission system, the Sellers shall have to inject extra power in addition to the contracted power and in the same way the buyers shall draw less power than contracted power. The average transmission losses of the respective Region would be applied along with additional losses (if any), as notified in advance by NLDC for particular Region(s) , on the basis of power flow pattern and studies carried out by the RLDCs/NLDC. These additional losses (if any) as notified by NLDC would be applied only on the Sellers in the collective transaction of the particular Region, having Injection Schedule at the periphery of the Regional Entities to compensate for losses due to wheeling of power through other Region(s). What are the initial margins to be kept with the trading member (Alankit Imaginations Ltd)?

Pre trade : Last 7 days average trade value Post trade : Additional margin over and above pre trade average, min 50 % in

cash and rest in Non cash collaterals (BG & FDR) No Margins for Sellers except IEX charges

How can one start Power trading at the earliest?

Become Alankit Client Sign the Client Registration Form available with Broker Member Get Registration Identification Code after payment of requisite fee,

etc. Standing Clearance from State SLDC – Eligibility

ABT Meters Sufficient transmission capacity

Start Buying from IEX or Sell surpluses to IEX