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Development Of A Common Development Of A Common Platform For Electricity TradingPlatform For Electricity Trading
CERC Public Hearing CERC Public Hearing
Presentation By POWERGRIDPresentation By POWERGRID
19-December-200619-December-2006
IntroductionIntroduction CERC Staff Paper CERC Staff Paper
– Well researched and documentedWell researched and documented– Created AwarenessCreated Awareness
Building blocksBuilding blocks– Physical growth of networksPhysical growth of networks
» Interstate & Super gridInterstate & Super grid– UI and ABTUI and ABT
» Creation of a marketCreation of a market» Streamlined at the inter-state levelStreamlined at the inter-state level
– STOASTOA– Merging of marketsMerging of markets
A priori to market designA priori to market design– UIUI– STOASTOA
Short Term Open AccessShort Term Open Access
Experience So Far & Lessons LearntExperience So Far & Lessons Learnt
Growth Of STOA TransactionsGrowth Of STOA Transactions
+ 406 %
+ 35 %
Intra & Inter Regional Transactions Intra & Inter Regional Transactions (Energy MUs)(Energy MUs)
STOA - Participating Utilities STOA - Participating Utilities
No. of Transactions:No. of Transactions:Advance Vs Day AheadAdvance Vs Day Ahead
Approved Volume:Approved Volume:Advance Vs Day Ahead (MU)Advance Vs Day Ahead (MU)
Applied Energy As % Of Applied Energy As % Of Approved Energy (NR)Approved Energy (NR)
% Utilization of Advance % Utilization of Advance Reservation (NR)Reservation (NR)
STOA Utilization In NR: Sep – Nov ‘06STOA Utilization In NR: Sep – Nov ‘06(As % of Approved Energy)(As % of Approved Energy)
STOA Utilization In WR: Apr – Oct ‘06STOA Utilization In WR: Apr – Oct ‘06(As % of Approved Energy)(As % of Approved Energy)
Load Curve & STOALoad Curve & STOA(NR) (20-10-2006)(NR) (20-10-2006)
Load Curve & STOALoad Curve & STOA(WR) (09-11-2006)(WR) (09-11-2006)
Market Structure - GenerationMarket Structure - Generation
Market Structure - LoadMarket Structure - Load
STOA ExperiencesSTOA Experiences
An enriching experienceAn enriching experience 95% applicants successful in getting approval 95% applicants successful in getting approval
for STOAfor STOA Single Transaction SizeSingle Transaction Size
– Smallest – 1 MWSmallest – 1 MW– Largest – 450 MWLargest – 450 MW
Maximum transfer 2780 MW on a dayMaximum transfer 2780 MW on a day Diversity being gainfully utilizedDiversity being gainfully utilized
STOA ExperiencesSTOA Experiences
Advance ReservationAdvance Reservation– Applications received up to 300% of available Applications received up to 300% of available
corridorcorridor» Pro rata allotment Pro rata allotment
VolumesVolumes– No. of transactions in day-ahead approx 4 times No. of transactions in day-ahead approx 4 times
that in advance reservationsthat in advance reservations– Energy volume in day-ahead approx 10% of that in Energy volume in day-ahead approx 10% of that in
advance reservationsadvance reservations
STOA ExperiencesSTOA Experiences
Utilization of booked corridorUtilization of booked corridor– About 70%About 70%
– Put and call options ?Put and call options ?
– Easy exit - low costEasy exit - low cost
Corridor availability Corridor availability – Peak hours – Corridor available but low volumesPeak hours – Corridor available but low volumes
– Off peak hours – Corridor & power availableOff peak hours – Corridor & power available
Costlier (liquid) generation & captives under utilizedCostlier (liquid) generation & captives under utilized Day ahead transactionsDay ahead transactions
– Serious playersSerious players
STOA ExperiencesSTOA Experiences UI volumesUI volumes
– Excessive reliance on UIExcessive reliance on UI– Need for a cap on UI volumeNeed for a cap on UI volume
Exploding size of matrixExploding size of matrix– Nearly 100 control areasNearly 100 control areas
» Implementation of Intra-State ABTImplementation of Intra-State ABT
– 96 time blocks96 time blocks Day ahead – schedules & utilizationDay ahead – schedules & utilization
– Frequent revisionsFrequent revisions– Un-utilized corridors, prospective buyers/sellers availableUn-utilized corridors, prospective buyers/sellers available– No show at 1500 hrsNo show at 1500 hrs
» Getting streamlined through intervention of Honble’ Commission Getting streamlined through intervention of Honble’ Commission
STOA ExperiencesSTOA Experiences
Assessment of Transfer CapabilityAssessment of Transfer Capability– Weather dependent loadWeather dependent load– Monsoon dependent Hydro generationMonsoon dependent Hydro generation– Firmness of maintenance schedulesFirmness of maintenance schedules– UI volumes – high uncertaintyUI volumes – high uncertainty– Floating frequency band – line flows affectedFloating frequency band – line flows affected– Frequent large contingenciesFrequent large contingencies
TTC, ATC, FC ATC, FC SATC, TRM, CBMTTC, ATC, FC ATC, FC SATC, TRM, CBM
STOA ExperiencesSTOA Experiences Evils of pro-rata Evils of pro-rata
– Advance Booking – E-bidding being avoidedAdvance Booking – E-bidding being avoided– SchedulingScheduling– Curtailment on congestionCurtailment on congestion– Problems of SEAMSProblems of SEAMS
» Multiple regions and states affectedMultiple regions and states affected– ReconciliationReconciliation
“If the system operator chooses such tools as pro rata curtailment or bilateral curtailment for line loading relief, they will interfere with economic dispatch.”
Steven Stoft, Power System Economics (3-4.5)
STOA Contracts So Far …. ?STOA Contracts So Far …. ? Advance Contracts – Advance Contracts –
– Firm ?Firm ?– For physical delivery ?For physical delivery ?– Forwards?Forwards?– Options Options
» Call ?Call ?» Put ?Put ?
“The day-ahead market is the forward market with the greatest physical implications”
Steven Stoft, Power System Economics (3-5)Steven Stoft, Power System Economics (3-5)
Procurement OptionsProcurement Options Long term contractsLong term contracts
– DirectDirect– Through tradersThrough traders
Short term open accessShort term open access– DirectDirect– Through tradersThrough traders
UIUI Power Exchange - Power Exchange - Another optionAnother optionFreedom to choose from the alternatives
Four Pillars of Market DesignFour Pillars of Market Design
IMBALANCESCONGESTION
MANAGEMENTANCILLARY
SERVICES
SCHEDULING &
DISPATCH
ELECTRICITY MARKET
Sally HuntSally Hunt
The Way Forward …The Way Forward …
Intra state ABT and STOA at state levelIntra state ABT and STOA at state level– Regulatory framework at state levelRegulatory framework at state level– Harnessing of latent generationHarnessing of latent generation– Optimal use of embedded generationOptimal use of embedded generation– Reduce market dominanceReduce market dominance– Intra State STOAIntra State STOA– Management of imbalances within statesManagement of imbalances within states
The Way Forward …The Way Forward …
Strengthening of network (state level)Strengthening of network (state level) Indexing of the real time market price (UI Indexing of the real time market price (UI
Rate)Rate)– Rationalization a pre-requisite for efficient Rationalization a pre-requisite for efficient
market functioningmarket functioning Robust financial settlement systemRobust financial settlement system Information exchange systemInformation exchange system
– Strong IT infrastructureStrong IT infrastructure– TransparencyTransparency
Resource buildingResource building
The Way Forward …The Way Forward …
Market rules that do not compromise with Market rules that do not compromise with system operator’s responsibilitysystem operator’s responsibility regarding regarding power quality and reliability.power quality and reliability.
“In the absence of a mature physical system operators fight an endless losing battle”
Charles ConcordiaCharles Concordia
Power ExchangePower Exchange
Voluntary participationVoluntary participation Double sided auctionDouble sided auction Uniform pricingUniform pricing Normative transmission charges, to startNormative transmission charges, to start Normative transmission losses, to startNormative transmission losses, to start No bid capsNo bid caps Robust financial settlement systemRobust financial settlement system Strong IT infrastructureStrong IT infrastructure Resource buildingResource building Organizational issuesOrganizational issues
““Bilateral markets provide a private Bilateral markets provide a private coordinating mechanism;coordinating mechanism;
Exchanges provide a public, centrally Exchanges provide a public, centrally determined market price.”determined market price.”
“All except the real time market are financial markets in the sense that the delivery of power is optional and the seller’s only real obligation is financial”
Steven Stoft, Power System EconomicsSteven Stoft, Power System Economics
Thank YouThank You