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Cross Border Electricity Trade

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Cross Border Electricity Trade,SAARC centric.

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Cross Border Electricity Trade

  1. 1. Cross Border Electricity www.iexindia.com Trade Rohit Bajaj VP (BD)
  2. 2. In this presentation Introduction to Exchange Mechanism Proposed mechanism for cross border trade through exchange International examples Way Forward for SAARC Exchange
  3. 3. Introduction to Exchange Mechanism
  4. 4. Company Snapshot 96% Market Share ~80,000MWh average daily trade 3000+ Participants 2100+ Industries Transparency Liquidity Competition
  5. 5. IEX Market Segments Delivery-based Contracts Day-Ahead Market since June,08 Closed , Double-sided Auction 10-12 am bidding Each 15-min block , 0.1 MW min NOC required Term-Ahead Market since 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 Certificates since Feb,11 Green Attributes as Certificates Sellers : RE generators not under feed in tariffs Buyers: Obligated entities 1MWh equivalent to 1 REC Next… Energy Saving Certificates Auction Continuous
  6. 6. 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 Orders Minimum bid=Re.1 for 1MWh N1 N2 S1 12 Bid Areas A2 A1 W3 E2 E1 N3 W2 W1 N2 S2
  7. 7. DAM Cleared Volume and Market clearing price (MCP)
  8. 8. DAM Monthly average Price
  9. 9. Proposed mechanism for cross border trade through Exchange
  10. 10. 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
  11. 11. 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)
  12. 12. 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
  13. 13. 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.
  14. 14. Identification of separate bid area N1 N2 S1 S1 12 Bid Areas Additional bid area could be added for each country A2 A1 W3 E2 E1 N3 W2 W1 N2 S2 N1 N2 A2 A1 W3 E2 E1 N3 W2 W1 N2 S2 B1 B3 B2 B4
  15. 15. International Experience
  16. 16. CM CM SM CM SM SM Example: SAPP, WAPP Nordpool North West Europe Coupling Evolution of Integrated Electricity Markets Integration level: Shallow Intermediate Fully integrated Proposed Market for the SAARC 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 Region 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 CM CM SM SM SM Individual Satellite markets join already existent single Liquid Market Two or more competitive markets join/couple to form larger integrated market CM SM SM Efficiency, Liquidity, Integration level
  17. 17. Way forward for SAARC Exchange
  18. 18. SM SM CM SM SM 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.
  19. 19. Way Forward • 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
  20. 20. Thank You for your attention www.iexindia.com 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
  21. 21. Model Price Calculation 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 -40 190 170 150 150 140 120 110 100 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 -220 Net Transaction, MW 20 18 16 14 12 10 8 6 4 2 0 Demand (Buy) Supply (Sell) 0 50 100 150 200 250 300 MCP: Rs 2.5 MCV: 120 MW
  22. 22. 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
  23. 23. 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
  24. 24. 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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