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Cross Border Electricity Trade,SAARC centric.
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www.iexindia.com
Cross Border Electricity Trade
Rohit BajajVP (BD)
In this presentation
Introduction to Exchange Mechanism
Proposed mechanism for cross border trade through exchange
International examples
Way Forward for SAARC Exchange
Introduction to Exchange Mechanism
Company Snapshot
96% Market Share ~80,000MWh average daily trade
3000+ Participants 2100+ Industries
Competition
LiquidityTransparency
IEX Market SegmentsDelivery-based Contracts
Day-Ahead Marketsince June,08
Closed , Double-sided Auction 10-12 am biddingEach 15-min block , 0.1 MW min NOC required
Term-Ahead Marketsince Sep,09
Day-Ahead Contingency – Another window 3-5pm
Intra-Day - for rolling evening peak hours
Daily- for rolling seven days (delivery starting after 4 days)
Weekly- for upto 11 days
Renewable Energy Certificatessince Feb,11
Next… Energy Saving Certificates
Green Attributes as CertificatesSellers : RE generators not under feed in tariffsBuyers: Obligated entities1MWh equivalent to 1 REC
Auction Continuous
Features of Day Ahead Market
A closed double-sided anonymous auction for each 15-min time block for the following day
The balance between the aggregated sale and purchase curves defines the market clearing price (MCP)
12 Bid area defined
Congestion Management through market splitting and determining Area Clearing Price (ACP) specific to an area
Bid types: Portfolio Orders or Block OrdersMinimum bid=Re.1 for 1MWh 12 Bid Areas
N1
N2A2
A1
W3
E2
E1
N3
W2
W1
N2
S2
S1
DAM Cleared Volume and Market clearing price (MCP)
DAM Monthly average Price
Proposed mechanism for cross border trade through Exchange
Status of Bilateral Interconnections within SAARC Countries
Existing Interconnections
Volume traded PPA/PSA Planned/Expected Interlinks
India– Nepal 22 links of 132/33/11kV
~ 150 MW imported from India by Nepal
Medium Term, commercial transactions
400 kV AC double-ckt lines operated at 220 kV. Expected by 2015
India-Bhutan 400/220kV D/C links
Import by India from 3 projects.
120MW Dagachhu expected by Sep.
Inter-government Agreement for 3 projects.
Methodology for accounting to be decided.
India-Bangladesh
HVDC Link 500 MW imported from India by Bangladesh
250 MW under Long, rest under medium term
IEX transactions possible for 30-100 MW. Up-gradation of 500 MW link to 1000 MW
India –Sri Lanka
No Link No N/A 500 MW HVDC Bipole line with submarine cable are discussed.
India-Pakistan
No Link No N/A Under discussions
Why harness the Power Exchange markets for regional trade?
• Better resource optimization– Can use the inherent margins in transmission to transact
power• Management of daily demand variations
– Daily demand variations and Peak requirements can be managed optimally through Day-Ahead Transactions.
• Competitive, transparent and neutral market• Liquid, diversified market• Standardized contracts, competitive prices through
market determined prices (no need for negotiations)
Bangladesh: Trading through Exchange
• At present, against 500 MW capacity, Bangladesh is getting maximum of 470 MW
• Utilise IEX platform for the remaining 30 MW
• Designate trader as the nodal facilitator for cross border trade with the exchange
• Major Trading Licensee already registered as Member of IEX
• BPDB can designate any of these traders to carry out trade on the Exchange on behalf of the country
• Bangladesh will be identified as an extension of the E1 bid area
Nepal: Trading at the Exchange
• Step 1: NEA to become client of an Indian trader– NEA can become client of the Indian Trader who is already a member at
the Exchange and will carry out trade on behalf of NEA
• Step 2: Bid entry at the Exchange– Post determination of ATC, the trader can enter bids for the available
quantum and a limiting price daily into the Exchange trading system on behalf of NEA.
• Step 3: Payment Settlement – Traders to make pay-in on behalf of NEA to IEX on daily basis.– NEA can have a weekly or monthly payment arrangement with the trader. – The trader can be paid trading margin plus financing charges.
Identification of separate bid area
12 Bid Areas Additional bid area could be added for each country
N1
N2A2
A1
W3
E2
E1
N3
W2
W1
N2
S2
S1
N1
N2A2
A1
W3
E2
E1
N3
W2
W1
N2
S2
S1
B1
B3
B2
B4
International Experience
Evolution of Integrated Electricity Markets
Example: SAPP, WAPP Nordpool North West Europe Coupling
Integration level: Shallow Intermediate Fully integrated
Liquidity: Low High Very High
Rules and Procedures: Formalised between all countries
Pre existent rules of Competitive Market followed by other joining markets
Re aligning of the rules to bring markets on a common platform
Mainly long term transactions Long term with short term transactions
Diversified products and presence of derivatives market
Individual Satellite markets come together to form a
single Liquid Market
CMCM
CMCM
SM
SM SM
SM
CM
Individual Satellite markets join already existent single
Liquid Market
Two or more competitive markets join/couple to form
larger integrated market
CMSM
SM SM
SM
Efficiency, Liquidity, Integration level
Proposed Market for the SAARC
Region
Way forward for SAARC Exchange
SM
SM SM
SM
CM
Proposed market for SAARC Region
Presence of Liquid markets in India
Exchanges in India offers standardised contracts and competitive platform and allow market based price discovery
Governing regulations and policy development are still at nascent stage in many countries, this will allow other countries to align the relevant rules for development of a harmonized market.
• SAARC single Electricity Market– Single Day-Ahead Market for SAARC Market– Examples around world:
• NORDPOOL ( 4 countries +Lithuania & Estonia)• Central West Europe• SAPP
• Limited Harmonisation of Rules (Common minimum)– Balancing & Settlement Rules across countries– Payment Security & Commercial terms– Grid connectivity standards
• Gather political will for mutual benefit of energy sectors of countries
Highly Scalable model for competitive electricity market
Way Forward
Best Power Exchange in India – Enertia Awards ‘13
Best Performing Power Exchange – Power Line Awards ’13 & ‘12
Best E-enabled consumer platform – India Power Awards ‘09
Thank You for your attentionwww.iexindia.com
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 20Portfolio A 20 20 20 20 20 20 20 10 7 4 0 0 0 0 0 0 0 0 0 0Portfolio B 60 60 60 60 50 40 40 40 40 40 40 40 20 20 20 20 20 20 20 20Portfolio 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 -120Portfolio E 0 0 0 0 0 -40 -50 -50 -50 -50 -60 -60 -90 -90 -90 -90 -90 -90 -90 -90Portfolio F 0 0 0 0 0 -20 -20 -20 -20 -20 -20 -30 -40 -40 -40 -40 -40 -40 -40 -40
190 170 150 150 140 120 110 100 97 94 90 90 70 30 30 30 30 30 30 30
0 0 0 0 -40 -120 -150 -151 -155 -170 -200 -210 -250 -250 -250 -250 -250 -250 -250 -250
Total Buy, MW
Total Sell, MW
190 170 150 150 100 0 -40 -51 -58 -76 -110 -120 -180 -220 -220 -220 -220 -220 -220 -220Net Transaction, MW
Model Price Calculation algorithm
0 50 100 150 200 250 3000
2
4
6
8
10
12
14
16
18
20Demand (Buy) Supply (Sell)
MCP: Rs 2.5
MCV: 120 MW
Why Exchange for cross border trade
Competitive & Vibrant Markets
Transparent and neutral platform
Price discovery – trusted and reliable
Double-sided bidding – best price discovery tool
Implicit Auction: Transmission management
REGIONAL IMPLICIT AUCTIONS
CWE Price coupling
Austria AT price coupled to GE/CWE (no congestion)
BritNed GB price coupled to NL/CWE
Nordic + Estonia Price coupling, also Poland via Swepol
ITVC Volume coupling CWE - Nordic
Italy - Slovenia Price coupling
Mibel (Iberia) Price coupling
Czech - Slovak Price coupling
Current Status
REGIONAL IMPLICIT AUCTIONS
CWE Price coupling
Austria AT price coupled to GE/CWE (no congestion)
BritNed / IFA GB in price Coupling
Nordic + Estonia Price coupling, also Poland via Swepol
NWE Price Coupling
Italy - Slovenia Price coupling
Mibel (Iberia) Price coupling
Czech - Slovak Price coupling
NWE project objective
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