INDIAN ENERGY EXCHANGE MARCH 2020 For Public Use
In this presentation Introduction to Indian Power Market Product Portfolio Trading Mechanism Market snapshot Participation Volume Price Trade @ IEX
Installed Capacity of India (Figures in GW) State Private Central All India 368 103 172.2 92.8 368.3 356 344 327 29.5% 46.2% 24.3% 100% 86 298 78 69 57 268 39 243 45 45 32 45 44 223 43 7 7 29 7 7 200 25 41 6 26 26 28 26 26 41 6 24 24 39 5 39 23 132 5 21 5 8 20 35 205 201 197 192 185 4 165 15 145 130 112 71 10th Plan11th Plan FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 (till Jan-20) Coal Gas & Diesel Nuclear Hydro RES
Power Supply situation in the Country Energy Available Installed Capacity Peak Met Year (at the end of FY) (Excluding RE Gen.) ( MW ) (MW) (MU) 2011-12 1,99,877 1,16,191 8,57,886 2012-13 2,23,344 1,23,294 9,11,209 2013-14 2,43,029 1,29,815 9,59,829 2014-15 2,67,367 1,41,160 10,30,785 2015-16 2,98,060 1,48,463 10,90,713 2016-17 3,26,848 1,56,934 11,35,332 2017-18 3,44,002 1,64,066 12,01,528 2018-19 3,56,100 1,77,022 12,44,758 • During the last 8 years, capacity has increased at a CAGR of 8.7 % i.e. from 199 GW to 356 GW in FY 19, peak demand met increased at a CAGR of only 5% Installed capacity has grown at a faster pace compared to demand Source: CEA
Indian Power Market Development trend Spot trading on Exchanges OTC Markets Multi Buyer/Seller Single buyer/seller Improved liquidity and Efficiency
Growing share of Short-term market FY 2009 FY 2019* Long Term 93.86% 88.3% PPA for over 25 years through long term Short-Term 6.1% 11.7% 0.4% Exchanges 4.0% Through traders 3.2% 4.1% Direct Bilateral 0.5% 1.5% Unscheduled Interchange 2.1% 2.0% Source: Percentage as per CERC Report on Short Term Power Market (Till March‘19)
IEX Market Segments • Day-Ahead Delivery for next day • Market Price discovery: Closed , Double-sided Auction since June,08 • Intraday: For Delivery within the same day Intraday Market & Day- • Day Ahead Contingency: Another window for next day Ahead Contingency • Gate closure : 2.5 hours Round the clock since Jul’15 • For delivery up to 11 days Term-Ahead Contracts • since Sep,09 Daily Contracts, Weekly Contracts • Renewable Energy Green Attributes as Certificates • Certificates Sellers : RE generators not under feed in tariffs • since Feb,11 Buyers: Obligated entities; 1MWh equivalent to 1 REC • Energy Saving Certificates 1 Ecert= 1 Mtoe( Metric Tonne Oil Equivalent) • Trading Session on every Tuesday of the Week since 27 Sep’17 • Trading time 1300 hrs to 1500 hrs Auction Continuous
Company Snapshot 97.5% Market Share 5500+ MW average daily trade 6000+ Participants 4100+ Industries 70+ Commercial 50+ Discoms 500+ Conventional Generators 1500+ RE Participants Transparency Liquidity Competition Market Share-FY 19 (DAM+TAM) Average Daily Trade- FY19(DAM) Participation-as 29 th February 2020
What benefits does the power exchange provide? Nation-wide voluntary access Delivery Based E-trading contracts No counterparty Robust Platform risk
IEX Volume Growth : Strong trend line 60,000 Electricity Volume 52,241 50,000 46,214 Cleared Volume (MU) 40,576 40,000 34,397 29,270 28,363 30,000 22,811 20,000 12,712 14,415 10,000 6,214 2,616 0 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY18 FY 19 Source: IEX Data (DAM+TAM) FY 09: from 27 Jun’08 - 31 Mar’09; Actual Volume of FY 2018 -19
Intra ra Day REC Product Portfolio
Product Segments Day Ahead Market Trade for the following day (DAM) Contracts for every 15 min, closed auction • Intraday From 3 Hrs ahead to Term Ahead 11 days in advance • Day Ahead Contingency • Daily Market (TAM) 4 types of • Weekly contracts Trade green attributes of electricity Renewable Energy Certificates (RECs) 1 REC = 1 MWh of green energy
Contract Characteristics TERM AHEAD MARKET Contract Day Ahead Intraday Day Ahead Daily Weekly Characteristic Market Contracts Contingency Contracts Contracts From 2 nd day to 0400-2400 Hrs Delivery Next day For next day For next week same day next 10 days Continuous Continuous Continuous Auction Type Closed Auction Open Auction trading trading trading Block of Hours Block of Hours Contracts 15 min Hourly Hourly (Fixed) (Fixed) All Days; All Days; Wed & Thur, Fri; Trade Availability All Days All days 1500-2300 1200-1500 1200-1600 Pay in: T+1 Pay in: T+1 Financial Pay-In- D-1; Pay Pay-In- D-1; Pay Pay-In- D-1; Pay Settlement Out – D+1 Out – D+1 Out – D+1 Pay out: T+1 Pay out: T+2 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 N1 N3 The intersection between the aggregated sale and purchase curves defines the market clearing A2 N2 N2 price (MCP) A1 E1 W1 W3 13 Bid area defined W2 E2 Congestion Management through market splitting S1 and determining Area Clearing Price (ACP) specific to an area S3 S2 Bid types: Portfolio Orders or Block Orders S2 Minimum bid=Re.1 for 0.1MWh 13 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
Bid Types • Bids for each 15 min • Relational Block Bid can be entered for any 15 min • Varying price and • Mother or child bid quantum pairs • No circular links • Allow partial execution • No partial execution Single/Portfolio Block Bid 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 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.
Matching: Model Price Calculation algorithm (Example for a sample 15-min) Price Tick 0 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 0 0 0 0 0 0 0 0 0 0 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 0 0 -40 -60 -80 -81 -85 -100 -120 -120 -120 -120 -120 -120 -120 -120 -120 -120 Portfolio E 0 0 0 0 0 -40 -50 -50 -50 -50 -60 -60 -90 -90 -90 -90 -90 -90 -90 -90 Portfolio F 0 0 0 0 0 -20 -20 -20 -20 -20 -20 -30 -40 -40 -40 -40 -40 -40 -40 -40 Total Buy, MW 190 170 150 150 140 120 110 100 97 94 90 90 70 30 30 30 30 30 30 30 Total Sell, MW 0 0 0 0 -40 -120 -150 -151 -155 -170 -200 -210 -250 -250 -250 -250 -250 -250 -250 -250 Net Transaction, 190 170 150 150 100 0 -40 -51 -58 -76 -110 -120 -180 -220 -220 -220 -220 -220 -220 -220 MW 20 Demand (Buy) Supply (Sell) 18 16 14 12 10 8 6 4 MCP: Rs 2.5 2 0 0 50 100 150 200 250 300 MCV: 120 MW
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
Better handling of congestion @ IEX Details of Congestion IEX PXIL Unconstrained Cleared Volume # (BUs) A 50.13 0.09 B Actual Cleared Volume and hence scheduled (BUs) 50.06 0.08 C Volume of electricity that could have been cleared and 0.07 0.01 hence not scheduled because of congestion (BUs) (A-B) D Volume of electricity that could not cleared as % of 0.13% 11% Unconstrained Cleared Volume * This power would have been scheduled had there been no congestion.
Term Ahead Market
TAM Market Segments Open Auction Continuous Continuous Continuous
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