Rajesh K Mediratta VP- Business Development 17-Feb-11
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Outline
• Introduction to Power Markets • Indian Power market • Indian Energy Exchanges – Products – DAM (Trading Details, Congestion Management, Scheduling) – TAM (Trading Details, Scheduling) – REC
• SAARC Energy Exchange – Way forward www.iexindia.com
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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Whole Sale Competition
Gen. Co.-1
Gen. Co.-2
Gen. Co.-3
Transmission a natural monopoly therefore regulated
Transmission Co.
Dist. Co.-1
Dist. Co.-2
Competition in generation
Dist. Co.-3
Distributors can choose who will supply them (Distributor can buy from any GENCO).
Consumers
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Retail Competition
Gen. Co.-1
Gen. Co.-2
Gen. Co.-3
Competition in Generation
Transmission: Natural monopoly Transmission Co.
Retailers / Suppliers
Retailers / Suppliers can choose who will supply them Distribution: A monopoly
Distribution System
Consumers
End consumer can choose who will supply them
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Market Development Derivatives
Market Maturity
Exchanges
OTC / Bilateral Markets Individual B&S
Time
7
POWERGRID
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2/17/2011
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
► Open Access both at utility level and consumer level ► Competitive procurement for medium-term and long-term power ► Development of a vibrant trading platform
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Power Markets The players and their function
network owners system operator(s) regulators
Infrastructure
power exchange(s)
Market Places
generators Consumers traders non-license members
Market Participants
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Role of Power Exchange ► A neutral and easy access to the marketplace
► Standardized Contract ► Offers “law of One Price” ► An automatic interface. ► Clearing & settlement of deals ► Security by being a safe counterpart ►Information disemination among the participants
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Evolution of Electricity Market 1998…
1996..
2008
2001….
2004
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European Power Exchanges Emerging system price zones? Market Copling Nord Pool
Consolidation?
APX UK
EEX / Powernext
OMIP OMEL
OPCOM – SE POOL GME
12
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Indian Power Market – An Overview
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Evolution of Power Market in India Financial Derivatives Capacity Market Ancillary Market
Power Exchange 2008 Open Access 2004 Settlement System 2002-03 Grid Code Feb.’2000 www.iexindia.com
Five Regional Grids Two Frequencies
August 2006 North synchronized With Central Grid
March 2003 West synchronized With East & Northeast
NEW Grid
October 1991 East and Northeast synchronized
South Grid
Central Grid
MERGING OF MARKETS
North East
West South
Northeast
Five Regional Grids Five Frequencies
Installed Capacity 162 GW www.iexindia.com
Indian Power Market Indian Power Market
Long Term
Medium Term
PPA’s
Bilateral
Bilateral
1 Direct 2 Trader
1 Direct 2 Trader
Short Term
1.Day Ahead 2. Same day 3. FCFS 4. Upto 3 months 5. Banking
Commenced since November,2010 Sellers :RE generators sell certificates Buyers: Obligated entities purchase certificates to fulfill RPO National market for RE
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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 • 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) www.iexindia.com
IEX - DAM Product Description
[2/2]
• 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 – – – –
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
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Time Line for scheduling of Collective Transaction
10:00
12:00 13:00 14:00
Market Participants to place their Bids PX 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
15:00 17:30
18:00
NLDC to confirm acceptance. PX to send files to SLDCs for scheduling
PX to send Scheduling Request to NLDC based on margin specified by NLDC
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RLDCs/SLDCs to incorporate Collective Transactions in the Daily Schedule
Collective transaction: 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.
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Collective transaction: SUBMISSION/PROCESSING OF APPLICATION
• 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. • 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.
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Collective transaction: SUBMISSION/PROCESSING OF APPLICATION • 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.
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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 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.
• 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.
• 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.
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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). • 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.
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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. • Intra-state transmission losses should also be taken care of in the schedules by respective SLDCs.
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Treatment of Losses • 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) • Average Transmission Losses of the Region where the Entity is geographically located • Additional Losses for Wheeling, if necessary – To be notified in advance by NLDC – Only for Injection
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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 Scheduled Drawal
