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Electricity Trading at IEX
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In this presentation
Indian Power market
Who are we ?
Day-Ahead Market
IEX Journey so far
Membership
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Indian Power Market
Indian Power Market
Long Term Short Term
PPAs
Bilateral1 Direct
2 TraderExchange UI
1.Day Ahead2. Same day3. FCFS
4. Upto 3months
5. Banking
Day Ahead
1. I ntra day
2. DAC3. Daily4. Weekly5. Monthly
RealTime
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Long-term marketState Sector
generationCentral Sector
generationPvt
Sector
Generation
Electricity Market Segments(Oct,08)
Short-term
market (7%)
Bilateral Market (48%)
Through Traders
41%
Direct Trading
7%
UI (43 %) Exchange(9 %)
Short-term Market
As per CERC October MMC Report
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IEX : Who are we ?
Promoters
Joint Equity Partners:
Technology :
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Technology
The leading technology provider to the worldsmost liquid power exchange, NORDPOOL.
Also own all exchanges in Nordic countriesexcept NORDPOOL Spot
Also owns exchanges in the Nordic and Balticregions
Four power exchanges in Europe currentlyusing technology.
.
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Background..
CERC accorded approval to IEX tocommence operations 9th June, 2008
IEX Commences Live Trading 27th
June, 2008
IEX Files application for approval of
Term-Ahead Contracts (TAM) 2nd Sept, 2008
CERC asked NLDC & IEX to finalizechanges in procedures 18th Nov, 2008
CERC gave in-principle approval 27th Nov,2008
CERC amends the inter-state open 20th
May, 2009access regulations
IEX filed affidavit with modified Rules 22nd May, 2009
Bye Laws & Business Rules
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IEX - DAM Product Description
Order Types:
Hourly Orders
1 hour
Max/Min Price, Volume, Hour
Different Price-Quantity Pairs
Partial Execution Possible
Block Orders
Consecutive hours during the same day
Customize block bid allowed
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IEX - DAM Product Description
Order Characteristics
Firm commitment to purchase or sell
Min and Max order price
Portfolio and Block bids
Trading Availability
Every Calendar Day
Order Entry
Entry for orders related to Delivery Day (D day) possible on D-1
from 10:00 hrs to 12:00 hrs
Contract
Contract Size: Minimum 1 MWh Minimum volume step: 0.1 MWh
Minimum price step: Rs 1 per MWh
Total Contract Price: Order Volume multiplied by ACP
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IEX - DAM Product Description
Finalising Trades 24 hour prices at 15:00 hrs of D-1 day
Determine the trades accepted
Delivery Point Periphery of Regional Transmission System in which the grid-
connected exchange entity, is located
Settlement Daily settlement at ACP x Volume traded
Final settlement adjusted for any force majeure deviations
Security of Transactions IEX act as counter party
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Price (Rs./ kWh) 0 201 2 2.1 3 3.1 4 4.11.1
SalePurchase
Rs/kWh
MW40 80 120
2
3
4
Price
MW
2.5
Portfolio A, MW 20 020 020
SUM, Purchase 120 100 80 80 60 60 40 40 202060
Portfolio C, MW 40 -400 -12020 0 -120-80 -81-60
Portfolio B, MW 6060 2040 40 2040 4040
SUM, Sale 0 0 -40 -120-120-80 -81-60
Net transaction 120 20 -100-80-20 -21100 80 80 -1000
0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
P
rice($/MWh)
0
50
100
150
200
250
-150 -100 -50 0 50 100 150
MW balance
P
rice($/MWh)
1
2
3
4
5
Rs
./kWh 2.52.5
2 .5
6 0
MCP:
MCV (Market clearing volume):
Price Calculation Algorithm .each hour
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Trader Station: Single Bid
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Trader Station: Block Bid
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10:00 14:00 18:0012:00
MarketParticipants toplace their Bids
PX to send SchedulingRequest to NLDCbased on marginspecified by NLDC
RLDCs/SLDCsto incorporateCollective
Transactions inthe DailySchedule
PX to sendprovisionalunconstrained
solution toNLDC and flowon TS asinformed byNLDC
13:00 15:00
NLDC to checkfor congestion.In case ofcongestion shallintimate PX
regarding to theperiod forcongestion andavailablemargins
Time Line for scheduling of Collective Transaction
NLDC to
confirmacceptance.PX to send filesto SLDCs forscheduling
17:30
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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 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.
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Benefits to Participants Better Price Discovery
Neutral and unbiased platform More transparent price discovery mechanism
Less Overheads
Reduces search cost No hassle of transmission corridor booking No negotiation
Payment Security undertaken by PX
Healthy cash flow as pay-out on immediately after delivery date Better Price Signals
Empowers demand-side responses to price-signals and moreeconomic grid operation
Provides long-term and short-term price signals
Single-point check on non-competitive practices (market power, pricemanipulation etc.)
Priority over 3 day ahead for IEX transaction
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IEX Participant Snapshot (till 31stJuly09)
11,440
(MW)
3,340
(MW)
SLDC Clearance to trade(Active Members & Clients)
364Captive Power Plants
28101Active members/Clients
31125Total no. of Member/Clients
PublicPrivate
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Increase in Participants (till 31st July, 09)
IncreasingParticipations
7369
34
2427202116136
25 24
3536
156147
89
79 81
95
72676462
123
78
58 57
0
30
60
90
120
150
June
'08
July'
08
Aug'08
Sept'
08Oc
t'08
Nov'0
8
Dec'0
8
Jan'09
Feb'
09
March
'09
April'
09
May'
09
June
'09
July'
09
Months
No.
ofParticipants
Maximum Active Portfolio
Member & Clients
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Volatility of Day-Ahead Market(Min& Max price in a day)
Price
(RS/MWh)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1-Ma
y
8-Ma
y
15-M
ay
22-M
ay
29-M
ay5-
Jun
12-Jun
19-Jun
26-Jun
3-Jul
10-Jul
17-Jul
24-Jul
31-Jul
Delivery day
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Wide-ranging participationacross the nation
23 states & 4 UTs 129 portfolios
Smooth Coordination with System Operators
Adequate Liquidity (June 31st July09) 4.22 BUs Cleared Volume (single side) Rs 3,398 Crs Turnover
All time high of
26.43 MUs(20thJune,09) 28.27 MUs unconstrained (3rd July 09)
IEX: Performance so far
IEX
PXI
IEX
PXI
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Nationw ide acceptance
StateUtilities
CPP
GreenPower
Total Participants156
Open Accessconsumer
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DAM: Demand Supply Gap
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
28-J
un-08
29-J
ul-08
28-A
ug-08
27-S
ep-08
27-O
ct-08
26-N
ov-08
26-D
ec-08
25-J
an-09
24-F
eb-09
26-M
ar-09
25-A
pr-09
25-M
ay-09
24-J
un-09
24-J
ul-09
Date
Volume(MWh)
0
1500
3000
4500
6000
7500
9000
10500
12000
13500
15000
A
vgprice(Rs/MWh)
Total Sale Bid(MWh) Total Purchase Bid(MWh) Average MCP
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IEX Score (till 31st July, 09)
IEX Price & Volume Trend
434
478
323
379
75
233 279
376
450
355291
180
377
0.42
4.62
6.20 6.41
10.47
7.668.36
6.425.62
6.14
7.568.46
7.687.507.73
0
100
200
300
400
500
600
June 08 July 08 Aug 08 Sept 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 March 09 April 09 May' 09 June' 09 July'09
Months
M
onth
ly
Volum
e(M
Us
0
2
4
6
8
10
12
Price
Rs/kW
h
Total Monthly Volume (MUs) Monthly Avg Price (Rs/kWh)
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IEX Hourly MCV & MCP( April 2009)
IEX Average Hourly MCV & MCP for April, 2009
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hours
Volum
e(MWh)
0.00
1.00
2.00
3.00
4.00
5.006.00
7.00
8.00
9.00
10.00
11.0012.00
13.00
Prices(Rs/kWh)
MCV(Hourly) MCP(Hourly)
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IEX Average Hourly MCV & MCP for June 2009
0
200
400
600
800
1000
1200
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hours
Volume(MWh)
0.00
1.00
2.00
3.00
4.00
5.006.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
Prices(Rs/kWh)
Hourly Avg. Volume Hourly Avg. Price
IEX Hourly MCV & MCP( June 2009)
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IEX Hourly MCV & MCP( July 2009)
IEX Average Hourly MCV & MCP for July 2009
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hours
Volume(MWh)
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
Prices(Rs/kWh)
Hourly Avg. Volume Hourly Avg. Price
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MEMBERSHIP
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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 ?
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IEX Membership Category
Proprietary Member (*) Professional Member(right to trade and clear on its own account) (trade and clear on his own account & on behalf of its Clients)
Generator
Distribution licensees
IPPs, CPP & MPPs
Open access consumers
Grid-connected Client (*) Trader Client
(eligible to buy or sell electricity and is
connected to the grid.)
(is eligible to trade in electricity
under the Electricity Act, 2003
and has a legally valid power
purchase/sale agreement,
which gives the Client the rightto purchase and sell electricity )
Generator
Distribution licensees
IPPs, CPPs & MPPs
Open access consumers
* Denotes that foll. Entities requires Standing Clearance from SLDC
Electricity Trader
Financial Brokers
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Membership Category and Financial Requirements
Membership Category: Proprietary / Professional Member
The financial criteria for payment options available on IEX are:
Rs. 22,60,000Rs. 65,10,000TOTAL
Rs. 10,000Rs. 10,000Processing Fees
Rs. 2,50,000Rs. 5,00,000Annual SubscriptionFees
Rs. 10,00,000Rs. 25,00,000Interest Free Security
Deposit
Rs. 10,00,000Rs. 35,00,000*Admission fee
Proprietary member
(Light Payment Option)
Professional & Proprietary
member(Full Payment Option)
Fees
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How to Move Ahead
Become Member Rs 22.6 Lacs +2p/kWh transaction fee
or
Rs 65.1 lacs + 1p/kWh transaction fee
or Client @ 1Lakh
Standing Clearance from UTs/State SLDC Eligibility
ABT Meters Sufficient transmission capacity
Terminal for Trading: Connectivity with exchange can be done in two ways
Internet Immediate
Leased Line
Start Buying from IEX or Sell surpluses to IEX
IEX I i i i
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IEX InitiativesContinuous communication with Users
IEX Daily SMSService for
Trade Details
IEX MonthlyBulletin
IEX hourlyTrade Pricesdisplayed onits website
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