PTC India Limited is a power trading company established in 1999 by the Government of India to promote power trading and develop a power market in India and neighboring countries. It has grown to become a major player in domestic and cross-border power trading. PTC facilitates power trading between India and Nepal, currently supplying Nepal 30-150 MW annually through both commercial arrangements and under major river treaties. However, fully realizing opportunities for power trade between the two countries faces challenges related to regulations, grid infrastructure, investments, and off-taker creditworthiness that need to be addressed to establish a robust power market.

1. NEPAL POWER INVESTMENT SUMMIT 2016
01 June 2016
Power Trading Opportunities and Challenges between Nepal & India
Ajit Kumar, Director (Commercial & Operations)
PTC India Limited
ajit@ptcindia.com

2. PTC: Genesis & Objectives
 PTC India Ltd. (PTC), was established in the year 1999 by Govt. of India; with
primary focus on
 promoting power trading to optimally utilize existing resources
 attract viable investments in the power sector on the strength of multi-buyer model
 creating a Power Market in India and the neighbouring countries
 Promoted by public sector majors in the industry
 NTPC, POWERGRID, PFC and NHPC
 Emergence of PTC and its resounding success recognized power trading as a
distinct licensed activity in Electricity Act 2003
 Board with eminent persons from Government and Power Sector
 Stock listed on BSE and NSE since 2004; widely held by institutions.

3. PTC: Milestones
Incorporated
1999
Commenced sustained Business
Operations
2001
2002 Commencement of Cross Border Trade
Listed on NSE and BSE
2004
2007 Established PTC Financial Services
Established PTC Energy Ltd.;
PFS Listed on NSE and BSE; 2011
2013
Started PTC Retail for HT/industrial consumers
2014
Export of power to Bangladesh
SignedAgreements for Tangsibji HEP in Bhutan; Long Term
Share~40% of total volume
2015
2009
2008
Power to NEA
on commercial
terms

4. Renewables / Energy
Efficiency
• Promoting Renewables
through models like Bundling
• Energy efficiency
implementation
• Advisory Services
Power Trading
• Domestic OTC market;
Short/Medium& Long-term
trades (utilities)
Retail (Open Access
consumers)
• Cross Border trade
Investments
• Early stage support as Equity
Investor / co-developer
• PTC India Financial Services
Ltd.
Fuel Intermediation & Asset
Building
• Tie up fuel from international
markets
• Sale of fuel in domestic
market
• PTC Energy Limited
An Integrated Energy Player
PTC: Capability Profile

5. PTC: Overview
DII
(Domestic
Instl.
Investors)
44%
FII
(Foreign
Instl.
Investors)
40%
Promoters
16%
Shareholding as on
31/03/2016 (%)
PTC Today
 PTC’s business includes Short term, Medium term, Long term (including
cross border) power trading, banking, trading of power through Power
Exchanges
 PTC has now expanded its business operations and moved towards an
Integrated Energy player
 PTC India Financial Services Ltd
 PTC Energy Limited
 Direct investments in other identified projects
 Fuel Intermediation
1.6
4.2
11.0
8.9
10.1
9.5
9.9
13.8
18.2
24.5
24.3
28.6
35.1
37.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15
Total BUs traded
Promoted by industry participants with a credible
track record and significant sector experience
• NTPC - India’s largest thermal power
generator
• POWERGRID - India’s largest Central
Transmission Utility (CTU)
• PFC – Development Financial Institution (DFI)
dedicated to the power sector
• NHPC - Large hydroelectric power generator
in India
PTC Today
 PTC’s business includes Short term, Medium term, Long term
(including cross border) power trading, banking, trading of power
through Power Exchanges
 PTC has now expanded its business operations and moved towards
an Integrated Energy player
 PTC India Financial Services Ltd
 PTC Energy Limited
 Direct investments in other identified projects
1.6
4.2
11.0
8.9
10.1
9.5
9.9
13.8
18.2
24.5
24.3
28.6
35.1
37.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15
Total BUs traded

6. PTC Market Share: FY 16
PTC
35%
Others
65%
PTC Market Share - FY16
*Including Cross Border
Volumes (MU)* Overall
PTC 42,360
Others 78,601
Market volume (MU) 1,20,961
95,249
1,20,961
0
20,000
40,000
60,000
80,000
1,00,000
1,20,000
1,40,000
FY 15 FY 16
Volume
(MU)
Financial Year
Tradeable Volumes (MU) - FY 15 and FY 16
Financial Years Volumes (MU)
FY 15 95,249
FY 16 1,20,961
% Change 26.99%

7. Prior to Power Markets
Monopoly Suppliers (SEBs, Private Licensees) ; Each SEB had an allocated
share in a Central/ Jointly owned station
Generators (CGSs, IPPs and SEBs) with capacity fully tied up
Price setting by Central/ State Governments – SEBs hardly having any
say
Entire sector developed on fixed rate return; Interplay of market forces
remained non-existent
Utilities would back-down in case of low demand and resort to load
shedding in case of excess demand
Power as a resource for earning revenue did not exist in this cost based
regime

8. Objectives of Indian Power Market
Current situation End goal
Largely cost plus tariff
systems with limited
incentives for improving
efficiencies
A well functioning power
market leading to free
competition
Gradual transition
path
The power sector needs to introduce competition into the power procurement process
as it gradually migrates to competitive markets across electricity value chain

9. Facilitating Investments
Power
Market
Powermarkethas in fact become a catalyst
forprivate investmentin powersector
More than 75,000 MW underdevelopment
by IPPs withoutany Governmentsupport
The wholesale marketforelectricity in India
is completely voluntary by design -that
none of the market participants are obliged
to operate through a restricted and
compulsory market.
Further,the rules regarding standardsof
supply are more liberal, permitting greater
flexibility to utilities on demand side
response
Such strong markets make capitalfunding
easierthrough effective supportfrom
marketintermediaries
LT
60%
ST/MT
30-40%
PX
~10%
Capacity Tie-Up

10. Growth in Power Trading
• Power Trading growth
• Volume has grown from 22 BUs in 2008 to
105 BUs in FY14
• As percentage of total generation, ST market has
grown from 3% in 2008 to 11% in FY14
• Power Exchanges started in 2008
• Two exchanges – IEX and PXIL
• PTC co-promoter of first National PX Indian
Energy Exchange (IEX) – has > 97% market
share
• Type of Trades
• Day Ahead Market (DAM) – 95% of PX
trades
• TermAhead Market (TAM) – 5% of PX trades
• Renewable Energy Certificates (RECs) 0
2
4
6
8
10
12
0
20
40
60
80
100
120
FY10 FY11 FY12 FY13 FY14
ST Market Volume (BUs) % of Generation

11. The Pioneer’s Role
Instruments Mechanism
Process &
Execution
Pioneer Role - Initiated development of short
term power market and introduced innovative
products for customers
Transition from cost-based returns to market
based returns
Creating “value” for power – market based price
discovery of power
Optimal utilization of generation capacity – short-
term trading
Increased generating capacity addition – long-
term trading
Development of Power Exchange
Establishedthe viability of concept
Powermarketcan play key role
in growth of sector
Credible intermediary
PaymentSecurity Mechanism
Weekly billing to reduce credit
risks
Rightto divert in case of default
Relationship of
trust,transparency
Comfortto developerof power
projects –by addressing marketrisks
Comfortto lender– by addressing
creditrisks
A catalystforprivate investmentin
the sector

12. Category of Buyers
Categoryof
Buyers
State
Utilities/Distribution
licensees
Industries
Source ofPowersupply
• Generationfrom State Generationcompanies/OwnGeneration
• Long term sourcing from CentralGenerators-NTPC/NHPC etc.
• Pooling from Ultra Mega Powerprojects underCase-2
• Procurementthrough competitivebidding
• Long term (up to 25/35 years.)
• Medium Term (1-5 Years)
• Shortterm (<1 Year)
• PowerSwap arrangementbetween State Utilities (Banking)
• Procurementfrom Hydelsourceson bilateralbasis (Forup to 35
years)
• PowerExchanges(IEX/PXIL)
• Shortterm contingencythrough negotiation
• Self Generation(Captive PowerPlant)
• Procurementfrom State Utilities/Distribution Licensees
• Procurementof Powerfrom Powertraders/Generators through
competitivebidding/Negotiation through Open Access
• Procurementfrom PowerExchanges(IEX/PXIL)

13. Short Term : Type of Transactions
• Bilateral – Discom to Discom sales
o Directly between two discoms or
between a discom & a generator
o Banking transactions
o Direct Participationin
CompetitiveBidding Tenders
• Bilateral – through traders
o Largest component of Short-
term Market
o Facilitatedby traders
o Negotiable Contracts
o Short-term tenure up to 1 year
o CompetitiveBidding Tenders
o Banking transactions
• Through Power Exchanges (PX)
o >2500 participants
o >1500 Open Access (OA)
consumers
o Day-ahead & Term ahead
market, Contingency, Open
Access Consumers
Particulars AgreementDuration Open AccessDuration
Medium Term (earlierSBDs) >1 year up to 7 years
>3 months up to 3 years
Medium Term (FOO) >1 year up to 5 years
Long Term (excluding Hydro) >7 years up to 25 years
>12 years
Long Term (Hydro) >7 years up to 35 years
ShortTerm –Bilateral Up to 1 year Fora period of up to 3 months
ShortTerm –PowerExchange
Day AheadMarket(1 day) 1day (corridorleftaftershort
term bilateral)
Term AheadMarket(up to 7 days) Up to 7 days in advance

14. Existing Regional Cooperation in South Asia
 Presently, inter-country cooperation mainly on bilateral basis
 Mostly as Govt. to Govt. initiatives with an intermediary as facilitator.
 Bhutan – India
 PTC imports ~1400 MW power annually from Bhutan
 Single largest revenue earner for Bhutan
 Nepal – India
 PTC facilitates power sourcing for Nepal on commercial terms(30 MW).
 NVVN is supplying 80 MW.
 Regional cooperation now moving as a mix of Govt. to Govt. and competitive routes
 Bangladesh – India
 250 MW supply to Bangladesh as Govt. to Govt. Arrangement
 250 MW & 30 MW through competitive bidding route (PTC)

15. Status of Current Collaborations
The above are small but crucial steps towards formation of a SAARC power
Market. But there are many more barriers required to be removed to create a
vibrant South Asian Power Market place
 Currently India imports about 1400 MW from Bhutan.
 Another5000 MW likely to be added by 2020.
Bhutan-India
 PTC facilitates powersourcing forNepalin winters on commercial terms
 Severaltransmission interconnections existsbetween India & Nepalon Radial
Mode
 400 kV Muzaffarpur-Dhalkebarline once fully loaded willhave carrying capacity of
1000 MW.
Nepal-India
 500 MW poweris being supplied from India via 400 kV HVDC Behrampur-
Bheramara line.
Bangladesh-
India
 Proposed HVDC interconnectionbetween Madurai (India)and Anuradhapura (Sri
Lanka)through the Palk Strait
 The carrying capacity of the line will be 1000 MW
Srilanka-India
Pakistan-India  Proposed interconnectionbetween India and Pakistan with carrying capacity of
500 MW underdiscussion

16. Nepal India Power Exchange
 Mahakali Treaty 70 Million Units/year (30MW)
 Koshi Treaty 10 MW
 50 MW
 No limit
 Limited by transmission capacity
Year
Energy
export to
Nepal (MUs)
2008-09 50
2009-10 69
2010-11 46
2011-12 69
2012-13 79
2013-14 97
Volume ofelectricity supplied by
PTC
Free Power under Major River Treaty
Contiguous border Power Exchange (with Indian SEBs)
Commercial Power Trading (With PTC India Limited)
Systematic power exchange between India and Nepal began from 1992
after the first power exchange committee meeting held in New Delhi.

17. Trading Challenges in Nepal
Laws and Regulation
 Presence of Independent Electricity Regulator can
stabilize & enhance trading activities by establishing
prudent settlement processes
 Formulating regulations for Cross Border trading
activities would facilitate a competitive trading market
 Adequate political support & stakeholder commitment
would play a significant role in hastening the trading
activities
Technical / Evacuation of power
 Establishment of clear procedures for evaluating
the technical impact of cross border projects
 Harmonization of Grid Codes, Connectivity
Standards, Penal mechanism for Incidences of
Grid Indiscipline
 Adequate monitoring and operational discipline in
interconnected system and protection system
Investment and Commercial
 Regulatory certainty for investments in Power
sector
 Funding requirement for creation of
Generation/Transmission assets. Payment Security
Mechanism, Currency transaction and translation
risk.
 Clarity required on connectivity (Power evacuation
system), open access and displacement of
cheaper power (Merit order dispatch mechanism)
Financial / Off-taker’s creditworthiness
 Financial support from multilateral agencies such as
ADB, World Bank.
 Sufficient revenues certainty as a result of high
regulatory risk
 Payment security mechanism and participation of
private sector.
 Legally enforceable agreements with proper dispute
mechanism and equitable risk sharing.

18. Opportunities for Trade of Power with Nepal
 PTC has signed PSA with NEA for supply of 150 MW for 25 years facilitating the
financial closure of Dhalkebar-Muzaffarpur line ( December 2011)
 Purchase of power from Indian Market through commercial terms
 Sale of power to Indian Utilities on Long term/Medium term/Short term basis.
 Sale & buy on India power exchange platform on day ahead basis.
 Explore suitable cross border banking arrangement with Indian Utilities to meet
seasonal variations.

19. Nepal Scenario
Role of PowerTraders
Year Dry Season (MW) WetSeason (MW)
Gen Peak
Shortage
Peak Gen Shortage Surplus
2013/14 641 1242 602 1217 849 368 8
2014/15 665 1357 693 1309 902 407 69
2015/16 940 1480 541 1379 1139 239 261
2016/17 1001 1612 611 1555 1363 191 404
2017/18 1694 1742 48 1680 1987 0 306
2018/19 1807 1880 73 1814 2217 0 403

20. 20
Thank You
Please reach me at- ajit@ptcindia.com