Power Exchanges

Case Study on IEX

AGENDA
Indian Power Market
Market Design & Power Flow
Market Structure
Market Products & Status
Indian Energy Exchange
IEX Products
IEX Membership
Exchange Timelines
Day Ahead Market (DAM)
Term Ahead Market (TAM)
 INDIAN POWER MARKET
Indian Power Market
Market Design & Power Flow
Market Structure
Market Products & Status
Indian Energy Exchange
IEX Products
IEX Membership
Exchange Timelines
Day Ahead Market (DAM)
Term Ahead Market (TAM)
 Indian Power Market
Market Design & Power Flow
NR : ONE NATION ONE GRID
Deficit Region, Snow fed - run of the river Prior to 2014 there were NEW (North-East-
hydro West) Grid and SR (South Grid)
Highly weather sensitive load With COD of Raichur Sholapur 765 line
GRID Unified
NER:
Regional Level
Surplus Region, Very low load NR 3750 MW
6450 MW 1105 MW Five RLDCs operated by CTU
High hydro potential NER
Number of ISGS
2000 MW
ER: ISTS Transmission between State
ER 1085 MW
Surplus region, Low load WR Unlimited Inter-regional Links
Pit head base load plants
State Level
SIL 29 states, responsible for Generation,
WR: 3650 MW
Unlimited
Transmission & Distribution.
Deficit region
Effectively Control Areas
Industrial and agricultural load
SR State Load Despatch Centre
SR:
States purchases power from ISGS
Deficit region, High load
Trade between states facilitated by OTC &
Monsoon dependent Hydro Bilateral Market between trading firms &
Power Exchanges
Source: ATC Feb 8, 2017, NLDC
 Indian Power Market
Market Design & Power Flow
Inter-regional or Intra-regional flow of power is subject to
TTC and ATC
Real time power flow could be different from the ATC
Power
Flow Stability Limit
from A (SL)
to B
(MW)
Voltage Limit (VL)

Thermal Limit (TL) Total Transfer

Capability

TRM

Total Transfer CBM

Capability (TTC)
= Min ( TL, SL, VL) Existing transmission
commitments

Available Transfer Capability (ATC)

= TTC TRM-CBM Existing
Transmission Commitments

TRM Transmission Reliability Margin; CBM Capacity Benefit Margin

Indian Power Market
Market Structure
Aim is to make Free
Market, but , Indian Power Market
Within Regulated
Environment

Bilateral Collective Spot Market

Transactions Transactions

Electricity Act 2003

provides provision for MoU/Cost Plus Competitive DSM (UI),
both procurement Based/ Section Bidding/ Section Power Exchanges Intra-State
mechanism 62 63 Transactions

Negotiation
Driven Market Driven
 Indian Power Market
Market Products & Status
Long & Medium Short Term
Term Transactions Transactions
Day Ahead Contracts

Bilateral Month Ahead (up to 3 mths) Contracts

Power Purchase Negotiation based MoU
Agreements (PPA) Through Trader Intra Day Contracts

Banking Allows
auction of
both
Day Ahead
Collective conventional
Through Power power and
Intra Day
Exchanges renewable
energy as
Daily/Weekly/Monthly contracts
Note:
UI : Unscheduled Interchange arising out of
Spot Real Time UI Purchase
deviation from schedule and pricing linked with
prevailing Grid frequency Real Time Settlement
Pool based: Mumbai (Maharashtra) because of its Contingency purchases
as UI
peculiarity of transmission bottlenecks allows for Pool based Purchase
pool based purchased among Gencos and DISCOMs
within Mumbai
Indian Power Market
Market Products & Status
Market Drivers
Real time Demand-Supply Movement Market Drivers
Forced Generation/Transmission Outage Capacity Addition
Paying Capacity of Buyers Fuel Availability & Pricing
Release of suppressed demand due to Political factors Policy Incentive

Short Term Market Long Term Market

1.79 % 4.13% 3.65% 90.43 %

Collective Transactions Long Term (Based on MoU

through Power Exchanges basis as well as Competitive
Deviation Bidding basis)
Settlement Short Term Market
Market (UI) (Bilateral through traders
and Term Ahead Contract
on Power exchanges)
Source: CERC MMC Report October 2016
 INDIAN ENERGY EXCHANGE (IEX)
Indian Power Market
Market Design & Power Flow
Market Structure
Market Products & Status
Indian Energy Exchange
IEX & Product Offerings
IEX Membership & Registration
IEX Products
IEX Timelines
Treatment of Transmission Charges & Losses
Day Ahead Market (DAM)
Term Ahead Market (TAM)
Timelines for Payment of Charges DAM/TAM
 Indian Energy Exchange
IEX & Product
Nation-wideOfferings
voluntary access
3700 Open
Access
Trade for the following day
Delivery Based Consumers Day Ahead
E-trading
contracts Market (DAM) Contracts for every 15 min, closed
auction
From 3 Hrs ahead Intraday
to 11 days in
Day Ahead
Term Ahead advance
Contingency
Market (TAM) 4 types of Daily
Started with Day Ahead MarketNoProducts in June 2008
counterparty
Robust Platform
Started Term Ahead Market Productsrisk
in September contracts Weekly
2009
Started REC Product in February 2011
Renewable Trade Green Attributes of
Will start ESCerts Products Shortly
IEX is approved by CERC Energy Electricity
IEX Certifications Certificates 1 REC = 1 MWh of green
ISO 9001:2008 for Quality Management, (RECs) energy
ISO 27001:2013 for Information Security
Management and
ISO 14001:2004 for Environment Management
Indian Energy Exchange
IEX Membership & Registration
Right to Trade and Right to Trade and
Clear on Client Clear its Own
Behalf Account
High Cost High Cost
Low Transaction Fee Low Transaction
Credit/Financing Fee Clients/Members
Proprietary
Trader
Member Grid Connected
Member
(FPO) Generator, Distribution Licensees,
IPPs, CPP, MPP, OA

Trader Client
Proprietary With Valid PPA
Professional
Member
Member
(LPO)
Right to Trade and Right to Trade and
Clear on Client Clear its Own
Behalf Account
High Cost Low Cost
Low Transaction Fee High Transaction Fee
No Credit/Financing
Indian Energy Exchange
IEX Membership & Registration
Membership
Characteristics
Trader/Professional Proprietary
Member (FPO) can transfer to
any other eligible entity after 3
years

Proprietary Membership under

LPO is upgradable to FPO

Interest Fee Security Deposit

Service Tax applicable on all fee

except Security deposit

Annual Fee applicable

depending on membership
Indian Energy Exchange
IEX Membership & Registration
Member Related Activities

SELECTION OF MEMBER 1 week Exchange Related Activities

METERING (unless already done) 0.5-3

PRE -TRADING

Special Energy Meter Months

SLDC Clearance/NOC
NOC from respective SLDC 1 Month

Registration at IEX 0.15

Client registration for each point of drawal
Month
Unique id created in Exchange system
 Indian Energy Exchange
IEX Products TERM AHEAD MARKET

Contract Day Ahead Intraday Day Ahead Daily Weekly

Characteristics Market Contracts Contingency Contracts Contracts

0030-2000 Hrs From 4th day to

Delivery Next day For next day For next week
same day next 7 days

Continuous Continuous Continuous

Auction Type Closed Auction Open Auction
trading trading trading

Block of Hours Block of Hours

Contracts 15 min Hourly Hourly
(Fixed) (Fixed)

Trade All Days; All Days; Wed & Thurs;

All Days All days
Availability 1500-2300 1200-1500 1200-1600

Financial Pay-In- D-1; Pay in: T+1 Pay in: T+1 Pay-In- D-1; Pay-In- D-1;
T = Trade Settlement Pay Out D+1 Pay out: T+1 Pay out: T+2 Pay Out D+1 Pay Out D+1
D = Delivery
Indian Energy Exchange
IEX Timelines
Indian Energy Exchange
Treatment of Transmission Charges & Losses
Assumption:
POC Loss: 1.5%
State Loss: 4.85%
Buyer Bids 100 MW at respective regional periphery
Seller Bids 100 MW at respective regional periphery

BUYER
Quantum Quantum
received at received at Scheduled Drawl <= SLDC
Buy Bid =
State periphery Buyer end= Clearance
100 MW
= 98.5 MW 93.72 MW Buyer draws 93.72 MW
against Buy Bid of 100 MW
POC State at IEX
Loss Loss
=1.5% =4.85%
GENERATOR
Quantum to Quantum to
Scheduled Generation <=
Sell Bid = generate at generate at
SLDC Clearance
100 MW State periphery Generator End=
Seller Injects 106.69 MW
= 101.52 MW 106.69 MW
against Sell Bid of 100 MW at
IEX
Regional
Periphery
Indian Energy Exchange
DAM - Trading Mechanism
Time IEX Operations Events
10:00 hrs to Bid - Call Session
12:00 hrs
By 11:00 hrs Funds pay out pertaining to previous days delivery, margin refund request (if
any)
NLDC to inform list of interfaces/control areas/ regional transmission system
on which unconstrained flows are required
By 12:20 hrs Exchange to determine MCP /ACP & determining provisional obligations of
the Members
By 13:00 hrs Communication of unconstrained solution to NLDC.
Communication to bank to confirm & block the funds pay in from Buyer
Members; settlement account.
Exchange will issue to Members PROVISIONAL OBLIGATION
By 14:00 hrs NLDC to confirm available limit for scheduling.
Exchange will receive confirmation from bank for availability & blocking of
clear balance along with a note on shortages
By 14:30 hrs Interaction with Members to ensure availability of funds.
Exchange to determine MCP/ACP based on final funds status & final ATC
By 14:45 hrs Exchange will issue to Members FINAL OBLIGATION
By 15:00 hrs Exchange submits the requisition to the NLDC
File to be sent by Exchange to banks for actual debits
Indian Energy Exchange
DAM - Bids
Bids for each 15 min can be
entered
Varying price and quantum
pairs
Allow partial execution
Single/Portfolio Bid
Relational Block Bid for any
15 min
Mother or child bid
No circular links
No partial execution
Block Bid
 Indian Energy Exchange
DAM Pricing Algorithm
Buy Bid 1
Price INR/MWh 0 4000 8000 20000 Aggregate Buy Bid Aggregate Buy Bid
Quantity MWh 2000 2000 1000 500 Price INR/MWh 0 2000 4000 6000 8000 20000 Price INR/MWh 0 2000 3000 4000 6000 7000 8000 9000 20000
Buy Bid 2 Quantity MWh 3000 2500 2400 1800 1300 800 Quantity MWh 3000 2500 2450 2400 1800 1550 1300 1258 800
Price INR/MWh 0 2000 6000 20000
Quantity MWh 1000 500 300 300

Sell Bid 1
Price INR/MWh 0 4000 6000 9000 20000 Aggregate Buy Bid
Aggregate Sale Bid
QuantityMWh 0 -500 -1000 -1300 -1300 Price INR/MWh 0 2000 3000 4000 6000 7000 8000 9000 20000
Price INR/MWh 0 3000 4000 6000 7000 9000 20000
Sell Bid 2 QuantityMWh 0 -583.3 -875 -1100 -1800 -2000 -2100 -2200 -2200
QuantityMWh 0 -875 -1100 -1800 -2000 -2200 -2200
Price INR/MWh 0 3000 7000 20000
QuantityMWh 0 -500 -900 -900
MCP
Price INR/MWh 0 2000 3000 4000 6000 7000 8000 9000 20000
Aggregate
MWh 3000 2500 2450 2400 1800 1550 1300 1258 800
Buy Quantity
Aggregate
MWh 0 -583.3 -875 -1100 -1800 -2000 -2100 -2200 -2200
Sale Quantity

Net MWh 3000 1917 1575 1300 0 -450 -800 -941.7 -1400

Breakup the Buy and Sale Arrive at Sale + Buy,

Bid at all Price Tags using Breakup the Buy and if it is ZERO, the
formula Sale Bid at all Price Price at which it
Bids of different Buy (matching in both becomes ZERO is the
(y2-y1)/(x2-x1) = (y- Buy and Sale Bids) MCP and the MCV is
and Sale Volume at
y1)/(x-x1) Tags using formula the Volume
Different Price Tags
Considering 'x' as price (y2-y1)/(x2-x1) = (y- e.g. INR/MWh 6000
tag and 'y' as volume, it y1)/(x-x1) and 1800 MWh in
can be determined present example
Indian Energy Exchange
DAM Pricing Algorithm
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 20
Portfolio A 20 20 20 20 20 20 20 10 7 4 0 0 0 0 0 0 0 0 0 0
Portfolio B 60 60 60 60 50 40 40 40 40 40 40 40 20 20 20 20 20 20 20 20
Portfolio 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 -120
Portfolio E 0 0 0 0 0 -40 -50 -50 -50 -50 -60 -60 -90 -90 -90 -90 -90 -90 -90 -90
Portfolio F 0 0 0 0 0 -20 -20 -20 -20 -20 -20 -30 -40 -40 -40 -40 -40 -40 -40 -40

Total Buy, MW
190 170 150 150 140 120 110 100 97 94 90 90 70 30 30 30 30 30 30 30
Total Sell, MW 0 0 0 0 -40 -120 -150 -151 -155 -170 -200 -210 -250 -250 -250 -250 -250 -250 -250 -250

Net Transaction,
MW 190 170 150 150 100 0 -40 -51 -58 -76 -110 -120 -180 -220 -220 -220 -220 -220 -220 -220

20
Demand (Buy) Supply (Sell)
18
16
14
12
10
8
6
4
MCP: Rs 2.5 2
0
0 50 100 150 200 250 300
MCV: 120 MW
Indian Energy Exchange
The
TradeSellers
Selected
UNIFORM
MCP :Rs Buyers
Buyers
Matched
Sellers : S1,S2,S3,S4
B1,B2,B3,B4
:Volume:
AUCTION
8000/MWh 125 MW (partial)
10 MW @ Rs
6,000
50 MW @ Rs 50 MW @ Rs
50 MW @ Rs 40 MW @ Rs 50 MW @ Rs
9,000 10,000
5,500 7,000 8,000
S5 S6
S4
S3
S1 S2

B1
B2
B3 B4
B5
40 MW @ Rs
25 25 B6 B7
MW MW
9,000 50 MW @ Rs @ Rs @ Rs 50 MW @ Rs
8,000 8,000
50 MW @ Rs
7,000 6,000
10 MW @ Rs 5,500
10,000

125
Indian Energy Exchange
DAM Congestion Management
SR WR

Deficit
50
150
S1
B2
S2
B3
B1
S3
MW
S3
S1
Surplus
100S2
B1
MW
40
30 MW
50MW 80 MW
50 120
100 MW
100
Rs MW
8.0/u
Rs 9.0/u
8.5/u
7.0/u
Rs 7.5/u
RS 5500
100 MW
RS
RS 9500
8000
6000

B2
160 MW Required
S3
Rs 9.0/u
50 MW Flow S2
Rs 7.5/u 100 MW
100 MW
Rs 5.5/u
B1
S1 50 MW S2
50 MW RS 8.5/u 20 MW
Rs 8.0/u
Rs 8.0/u

S2 B1
B3 S1
40 MW 100 MW
30 MW 80 MW
Rs 8.5/u Rs 6.0/u
Rs 7.0/u Rs 9.5
Indian Energy Exchange
DAM Congestion Management
SR WR

Deficit Surplus
100
20 MW
MW 100
20 MW
MW
Lowest Buyers getting rejected
Highest Seller getting rejected
B2
S3
160 MW Allowed S2
50 MW
Rs 7.5/u
Rs 9.0/u Flow 100 MW
20 MW Rs 5.5/u
B1
S1
50 MW S2
50 MW
Rs 8.5/u 20 MW
Rs 8.0/u
Rs 8.0/u
S2 B3 B1
40 MW S1
30 MW 100 MW
Rs 8.5/u 80 MW
Rs 7.0/u Rs 6.0/u
Rs 9.5/u
 Indian Energy Exchange
DAM Paradoxically Rejected Bids
Price Quantity
Bid Hours
(INR/MWh) (MWh)
From Hr 1 to
Block Bid 3500 -50
Hr 2
Price for Hour 1 0 1999 2000 2999 3000 3999 4000 4999 5000 20000 ACP
Excluding Buy Quantity 400 400 325 325 325 325 100 100 0 0
3999.11
Block Bid Sell Quantity 0 0 -200 -200 -300 -300 -300 -300 -350 -350
Including Buy Quantity 400 400 325 325 325 325 100 100 0 0
2999.75
Block Bid Sell Quantity -50 -50 -250 -250 -350 -350 -350 -350 -400 -400

Price for Hour 2 0 999 1000 2999 3000 4500 4501 4999 5000 20000 ACP
Excluding Buy Quantity 400 400 300 300 300 300 100 100 0 0
4500.13
Block Bid Sell Quantity 0 0 -150 -150 -275 -275 -275 -275 -350 -350
Including Buy Quantity 400 400 300 300 300 300 100 100 0 0
2999.8
Block Bid Sell Quantity -50 -50 -200 -200 -325 -325 -325 -325 -400 -400
Average ACP
4249.62 Inclusion of Block Bid brings down the ACP below the Bid Price. But it fails to qualify the criteria of
excluding Block Bid
Average ACP Block Bid of Either Full Quantum at Quoted Price or None.
2999.78
including Block Bid

Exclusion of Block Bid brings up the ACP above the Bid Price. But it creates an impression that
Block Bid is rejected even its price is less than ACP

Because of this paradox, in final solution, the block bid is not selected although results suggests that
it should be selected. Because of this paradox, such bid rejection is categorized as Paradoxically
Rejected Bids
Indian Energy Exchange
TAM Products
Market Segments Market Functioning Market Products Bid Matching

Weekly Trade Power for an entire week Firm Base Open Auction
Firm Night
Firm Day
Daily Trade Power for an entire day Firm Peak

TAM Day Ahead Trade Power for an entire day on hourly

Contingency basis, 1 day ahead Hourly
Continuous
Trading
DAC 24 hrs
Trade Power for same day on hourly Intraday 14-
Intraday
basis 24 hrs
Indian Energy Exchange
TAM Process
IEX Validation
Bid Validation and Member sends the
Members obtain
Bid Entry acceptance and matching SLDC clearance to
SLDC Clearance
Margin Money collected IEX

Finalisation of
Reports generation IEX applies to nodal
Financial Settlement schedule by Nodal
by IEX RLDC
RLDC
Indian Energy Exchange
TAM Matching Mechanism
Open Auction
Orders accumulated during call phase (no
matching)
Orders matched after call period
Orders are used for calculation of
Equilibrium Price, Bids matched at this
price
Continuous Trading
Price Time Priority based continuous
bidding
The Highest Buy Order and Lowest Sell
Order gets the priority
If prices are same then priority given to Time
of order received
Indian Energy Exchange
TAM Matching Mechanism TWS Screen
CONTINUOUS
Pending Buy Order TRADING
PendingPROCESS
Sell Order
Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ RS 5500/MWh

Trading Engine
Buy 10 MW @ RS 4500/MWh Sell 15 MW @ RS 5500/MWh

Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ Rs 5500/MWh

Indian Energy Exchange
TAM Matching Mechanism
TWS Screen
Pending Buy Order Pending Sell Order
Buy1010
Buy MWMW @5000/MWh
@ RS 4500 Sell 15 MW @ Rs 5500/MWh

Buy 10 MW @ RS 4500/MWh

Trading Engine
Buy 10 MW @ RS 5000/MWh

Buy 10 MW @ 5000/MWh
Indian Energy Exchange
TAM Matching Mechanism
TWS Screen
Pending Buy Order Pending Sell Order
Buy1010
Buy MWMW @4500/MWH
@ RS 5000 Sell5 15
Sell MW MW
@ Rs@ 5500
5000/MWh

Buy 10 MW @ 4500

Trading Engine
Sell 15 MW @ Rs 5000/MWh

Bid Modified
Trade 10 MW @ RS 5000/MWh
Sell1515
Sell MWMWh @ 5500
@ RS 5000/MWh
Indian Energy Exchange
Timelines for Payment of Charges DAM/TAM

NLDC Charges RLDC Charges SLDC Charges*

Application Fees is paid in Application SLDC Scheduling &

advance = T Fees/PoC/SLDC/RLDC Operational Charges is paid
NLDC Scheduling & charges is paid on Within 3 on T+1
Operational Charges is paid working days of Acceptance State Load Dispatch Centre
on T+1 (SLDC) is paid on T
Transmission Charges CTU
is paid on T+1

Note: RLDC collects the STU charges and disbursed the same among the State Transmission utilities
Thank you
Himanshu Mishra
himanshumishra22@gmail.com
+91-8886691773
DAM-Single Bid
DAM-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.