Power Trading

Power Trading

Financial Markets

Electricity

Triple Point Technology 2

Current Situation…

Market Advantage Drawback

Term Known price over an extended period

May prove to be price sub-optimal

UI Flexible players can achieve good returns

Unpredictable Could be punitive

Generation Transmission Distribution Consumers


Electricity price is a natural candidate for Volatility

•Cannot be stored

•Essential

•Grid constraints

•Temperature/ Weather

•Load Crash

•Amount of daylight

•Price of generation fuels

•Imbalances immediate


The New Value Chain

ProductionCompany

TransportCompany

DistributionCompany

Retailer

TraderEnergyExchange

RLDC/ SLDC(Grid operator)

Consumer

ServiceProvider

New Power SectorNew Power Sector


Isolated markets

Bilateral agreements

Long-term auctions

Daily auctions

Market splitting

Integrated market

The Evolution Process


Status first Power Markets in EUROPE

Country Start Market Spot Forward Zonal price

Balancing

Nordic 1/1993 Nordpool Y Y Y Y

Spain 1/1998 OMEL Y Y N Y

Holland 5/1999 APX Y N N** Y**

Germany 6/2000 LPX* Y N Y N

UK-UKPX 6/2000 UKPX Y Y N Y

Poland 6/2000 Gielda Energii

Y N N N

Germany 7/2000 EEX* Y Y N N

UK-NETA 3/2001 Elexon N N N N

UK-APX 3/2001 APX UK Y Y N Y


Today….

Demand side of the industry has no role in the price setting mechanism

Large portfolio generating companies influence price

Does not facilitate traders and other non-traditional players into the market

Excessive price opacity in the contracts market.

c

Energy Act Government

Regulator

Regulatory rules

Market Operator

Exchange Rules

Tariff code

Network code

System code

System Operator


Steps Forward

The replacement structure: Standardized

Contracts Short Term Bilateral

Market Day Ahead

Auctions Market Hour Ahead Market


India Electron Exchange

Where electricity could be Bought, Sold Or Traded In An Open But Regulated Environment


IEE- Short Term Market

CPP/ IPP/ SEB/ Trader

CPP/ IPP/ SEB/ Trader

Auto Auto matchingmatching

Auto Auto matchingmatching

Availability of Availability of Transmission Transmission Availability of Availability of Transmission Transmission

AuctionsAuctionsAuctionsAuctions

Day AheadDay AheadDay AheadDay Ahead

Hour AheadHour AheadHour AheadHour Ahead

ContractsContractsContractsContracts

Standard Standard ProductsProducts

Standard Standard ProductsProducts

Credit Limit/ Credit Limit/ CheckCheck

Credit Limit/ Credit Limit/ CheckCheck

BidBidBidBid


Contract SpectrumC

ON

ST

RU

CT

ION

DE

LIVE

RY

3+ Y

ears

Mon

ths

Hou

rs

Min

utes

Decreasing time before delivery

Decreasing Term of the Contract

Long term

ComplexTailoredBilateral

Negotiated

Short term

StandardisedAuction BasedFormula/ Fixed-

pricedBilateral

Day Ahead

SimpleStandardised

BilateralPosted bids/offers

Formula/ Fixed Priced

Hour Ahead

Auto matchedFormula Priced/ Fixed

PricedImmediate Scheduling


A typical operator

1 2 3 4 5 6 7 8 910

11

12

13

14

15

16

17

18

19

20

21

22

23

24

36

34

32

30

28

26

24

22Bilateral (Base load) contract

Bilateral (peak load) contract

Day Ahead Hour Ahead

Sell

BuyBuy

Sell

Forecasted demand

Ancillary Service

Intra Day demand

Real-time demand

Surpluses/Deficits - balance Company physical supply and demand


An Exchange will facilitate

Price Transparency Ability to know the price of

electricity now and in the future (up to 15 months)

Index based Trading Buy/ Sell +/- UI

Risk Management Manage price/ delivery risk Secure and Regulated market

Guaranteed performance of trades

Credit tracking mechanism Default Mitigation mechanism

Lower Transaction Cost Flexibility

Term of delivery Time of Closure

Access to a wider/ larger market spectrum

Power of Buyers

Power of

Suppliers

New Entrants

Substitutes

Open/ Transparent/ Competitive

Market


More Options ……

Market Advantage Drawback

Term Known price over an extended period

(determine a base level)

May prove to be price sub-optimal

Forwards High flexibility

Reported pricing

Short-term bilateral Attractive pricing

Risky to source all volume here

UI Use to your advantage in smaller percentages

Highly unpredictable Could be punitive


IEE Value Added Services


Asset Management

Scheduling

Tagging

LDC & Electronic

Market Communications

Load Management

Auctions

Trading

Load Aggregation and Forecast

Resource Information

Accepted Bids

Deals

ScheduleInformation

Tags & Tag Disposition

Notification& Assessmessages

Auction Information

Bids

Accepted Bids

Bids & Schedules

Accepted Bids,Final Schedules, Settlement Info &Market Information

WholesaleSettlements

Deals

Schedules

Schedules

Invoices & Payments

Doing Business with IEE


Integrated suite of enterprise-wide trading systems Manages a multitude of commodities: power, natural gas, oil,

refined products, chemicals, and others Built on Triple Point’s next-generation n-tier architecture

The Triple Point “XL” Platform


Position Manager

Trades Trade Manager

Forecasting, Real Time – Position / PL

Real Time Reporting, and Maintenance

Scheduling Manager

Real Time – Book Outs, Back-to-Backs, Movements

SettlementManager

Real Time – Invoices / StatementsPayment Application

- Options Manager- Hourly Trade Blotter- Confirmation Manager- Contracts Manager

- Forward Price Curves-Price / Load Shaping (P)- P/L Analyzer- Position by Counterpart*

- Match Manager- Nominations*- Transportation*- Allocations*

- Statement Manager- Payments Blotter- Payments Manager

Create a Trading Back- Office


Development Center in Pune

India

Current strength= 70.

Client Services Team

Support to Asian Clients

Technical Support Group

24 * 7 Support to clients in

US/ India.

Triple Point (India)

IEE


The Company That We Keep….

Documents

Power Trading