2. Presentation Outline
• Review of Fundamentals
• Power Exchanges
– Concepts
– Implementation in India
• Regulatory Framework
• Procedures for Collective Transactions
• Congestion Management
– Market Splitting
– Sharing of Available Margins amongst the Power Exchanges
• Experience Gained in India
• Trading of Renewable Energy Certificates in the Power Exchanges
• Taking the Markets to the Next Level
– Proposal For Evening Market
– Sub-Hourly (15 – Minute) Market in Power Exchange
• Recent International Experience
2
4. Market
• A mechanism through which buyers and sellers
interact to determine prices and exchange goods and
services
• Entire set of conditions surrounding production,
transport and distribution of a product
• Size determined by geography, transport, costs, etc.
4
5. In a market everything has a price !!!
• Price
– is the value (not cost) of the good/service in terms of
money
– represents the terms on which voluntary exchange of
goods & services takes place
– Serves as signal to the producers and consumers
5
6. 6
Demand
• Need + Purchasing power = Demand
• Law of downward–sloping demand
– When price of a commodity is raised, buyers tend to buy less
of the commodity, other things remaining constant (e.g.,
purchasing power, related goods, preferences, environment,
etc.)
Quantity
Price
7. 7
Supply Curve
• The supply curve shows the relationship between its
price and the amount of that commodity that producers
are willing to produce and sell, other things held
constant (e.g., cost of production, technological
advancement, related goods, etc.)
Quantity
Price
10. 10
Price elasticity of demand
Elastic
More Elastic
Less elastic
Perfectly Inelastic
Perfectly elastic
Change in Quantity Demanded in response to change in Price
12. Bilateral (OTC) Markets
• Common price through a co-operative approach
• Major Concerns –
– Price Discovery
– Price Discrimination
– Liquidity
– Transaction Costs
12
13. Power Exchanges - Definition
• An electricity Power Exchange provides a spot
market, mainly day-ahead, for electricity, which
like any other market matches demand and supply
for each time block, while providing a public price
index
13
14. Power Exchange – Characteristics (1)
• A Market Place
– Voluntary or Mandatory
– Anonymous auction platform
– Neutral
• Liquidity
– A competitive wholesale spot trading arrangement
• Energy Only Markets
– Do not account for any technical constraints or capacity
payments
• Bids
– Sale Bid – Quantum and Minimum price
– Buy Bid – Quantum and Maximum price
14
15. Power Exchange – Characteristics (2)
• Price Discovery
– Common price achieved through non co-operative
approach
– Price Discovery by matching of demand-supply
– Price signals
– Benchmark reference price
• Congestion Management
– Implicit Auction
– Market Splitting
15
16. Power Exchange – Characteristics (3)
• Standardized specifications
– Contract structure
• Robust Clearing & Settlement systems
– Counter party credit risk absorbed
• Risk Management
– Payment Security
– Standard margining system
Eliminates credit rating
• Fair, Safe, orderly market
– Rigorous financial standards and surveillance
procedures
16
17. Bilateral (OTC) Contract vs. Power
Exchange
OTC contract Exchange Traded
Available to limited market
participants
Liquid market – wider market
participation
Bilateral/ Customized Contracts Standardized contracts
Counter party credit risk Counter party risk assumed by
exchange
Is an involved participant Platform is Neutral
Opaque dealing Transparent price discovery
mechanism
Bilateral dispute settlement
mechanism
Well defined dispute settlement
mechanism
Difficulty in reporting and regulating
various trades
The exchange is the central
reporting and regulating entity
17
18. Interplay: PX – Bilateral Markets (OTC)
• Rivals
– Competition between two types of markets
• Complementary
– Competition limited to day-ahead
– Preference to OTC in longer time frame
• Inter-dependent
– Prices on the PX & OTC must be very close else
arbitrage occurs
– Hedging
18
19. The PX Clearing House
• Subordinate to the PX
• Intermediary for transactions
• Tracks all transactions
• Primary role
– Guarantee financial reliability to the participants
• Participants required to maintain margin accounts
• Effectively hedges against credit risk
19
20. Advantages PX
• Promotes trade and competition
• Reliable price discovery
– Reference for bilateral contracts
• PX recognizes value of the commodity (electricity)
– Does not guarantee lower prices
• Optimal utilization of sparse resources
– Generation
– Transmission
• Credit risks covered by the PX
• Congestion Management
• Facilitates trading of short term arising on account of
uncertainty in demand forecasting
20
21. 21
Auction Models
MCP
MCV MCV
MCP
PRICE PRICE
VOLUMEVOLUME
One Side Auction Two Side Auction
Supply SupplyDemand
Estimated
Demand
MCP = Market Clearing Price MCV = Market Clearing Volume
24. Types of Bids
• Single bids
– Price – Quantity pairs, one for each hour
• Block Bids
– A Block bid is all or none type of a bid i.e. bid will get
accepted by the system only if price and volume
condition is getting satisfied.
– Can cause unpredictable movements of prices and
volumes
System Operator Training 24
26. The Milestones
• July 2006
– Staff Paper by CERC
• February 2007
– CERC Guidelines for establishment of Power Exchange
• August 2007
– In principle approval to the first power exchange in the country
• January 2008
– Revised Regulations for Open Access in Inter-state Transmission,
Effective 1st April 2008
• June 2008
– Procedure for Scheduling of Collective Transactions by CTU
– Commencement of operations
• October 2008
– Second Exchange begins operations
26
27. Power Exchange in India – Salient Features
• Multiple Power Exchanges
– Competition amongst Exchanges
• Voluntary participation
• Double sided bidding
• Uniform pricing
• Day-ahead exchange
• Hourly bids
• Congestion management by market splitting
27
29. Regulator’s Approach
• CERC Guidelines for setting up of a Power Exchange:
“The general approach of the Commission is to allow
operational freedom to the PX within an overall
framework. The regulation would be minimal and
restricted to requirements essential for preventing
derailment/accidents and collusion. Private
entrepreneurship would be allowed to play its role.
The Commission shall keep away from governance of
PX, which would be required to add value and provide
quality service to the customers”
NLDC 29
30. CERC Power Market Regulations, 2010 (1)
• Scope & Extent
– OTC Markets
– Power Exchange Market
– Other Power Exchange Markets
Derivatives
• Types of Contracts
– Delivery based OTC Contracts
– Financially settled electricity derivatives contracts
transacted in OTC market
– Delivery based contracts transacted on Exchange
– REC Contracts
– Capacity, Ancillary, Derivative based contracts (future)
System Operator Training 30
31. CERC Power Market Regulations, 2010 (2)
• Prior to grant of permission to Power Exchange, CERC
may examine
– Type of contract (day ahead, term ahead etc);
– Price Discovery methodology and matching rules
proposed;
– Transaction period – When transaction shall commence
and for what tenure transaction session shall continue
before delivery commences;
– Risk Management mechanism
Margining mechanism
Final Price Settlement mechanism
– Delivery mechanism, delivery duration
System Operator Training 31
32. CERC Power Market Regulations, 2010 (3)
Objectives of the Power Exchange (Regulation 10)
•Ensure fair, neutral, efficient and robust price
discovery
•Provide extensive and quick price dissemination
•Design standardised contracts and work towards
increasing liquidity in such contracts
– Explanation: Liquidity is a measure of ease of entering
or exiting into a transaction (generally large
transaction) with minimal impact in the market price
of the transacted contract.
System Operator Training 32
33. CERC Power Market Regulations, 2010 (4)
Principles of Price Discovery (Regulation 11)
•The economic principle of social welfare maximisation
and to create buyer and seller surplus simultaneously
during price discovery.
•The bidding mechanism shall be double sided closed
bid auction on a day ahead basis.
•The price discovered for the unconstrained market
shall be a uniform market clearing price for all buyers
and sellers who are cleared
•In case of congestion in transmission corridor, market
splitting mechanism shall be adopted.
•The delivery / drawl of power shall be considered at
the regional periphery.
System Operator Training 33
34. CERC Power Market Regulations, 2010 (5)
• Other Provisions
– Prudential Norms
– Governance Issues
– Ownership Patterns
– Registration – Fees
– Membership
– Clearing House
– Interface with System Operator
System Operator Training 34
35. Open Access Regulations, 2008
• Earlier Regulations notified in February 2004
(amended in 2005) stand repealed
• Covers Short Term Open Access Transactions only
• Categories of Transactions
– Bilateral
– Collective Transactions discovered on a Power
Exchange
• Nodal Agency
– Bilateral: RLDCs
– Collective: NLDC
36. • Transmission Charges
– Shift from “Contract Path” to “Point of Connection”
– Both buyers and sellers to pay
– IR Links – no separate treatment
• Transmission Losses
– Applicable on both buyers and sellers
• Disbursement of Transmission Charges
– 25% retained by CTU
– 75% to be credited to long-term customers
Open Access Regulations, 2008:
Provisions For Collective Transactions
37. • Thrust on Empowerment of SLDCs
• SLDC Concurrence [Clause 8(2)]
– NOC/Standing Clearance to be obtained by State
Utilities/Intra-State Entities from the SLDC for trading
through PX
– SLDC to respond within 3 days
– SLDCs may charge appropriate fee for such
NOC/Standing Clearance (as per SERC or Rs. 5000 if
not notified by SERC)
Open Access Regulations, 2008:
Provisions For Collective Transactions
39. Eligibility Conditions
• Entities scheduled by RLDCs
– Deemed Regional Entity
Entities whose metering and energy accounting done by RLDCs
• Entities scheduled by SLDCs
– SLDCs to assess TTC/ATC for their State system
– Prior Consent from respective SLDCs
– Standing Clearance / NOC
• New Entities
– To Satisfy conditions as laid down in IEGC
– Obtain Prior Approval from RLDCs/SLDCs as per
jurisdiction
NLDC 39
40. Commercial Conditions (1)
• Charges for Collective Transactions payable to
SLDCs
– Transmission Charges: As per SERC, if notified or else
Rs. 80/MWh
– Operating Charges: Rs. 2,000 per day for each point of
transaction
– Each point of injection and drawl to be counted
separately by SLDCs
– PX to settle SLDC charges directly with respective SLDC
41. Commercial Conditions (2)
• Charges for Collective Transactions payable to NLDC
• Application Fee
– @ Rs. 5,000/-, payable by PX to NLDC at the time of application
• Transmission Charges
– Applicable for each point of injection and drawl
– Charges for use of ISTS @ Rs. 100 per MWh
• Operating Charges
– @ Rs. 5,000/- per day per group involved
– Buyers and Sellers in a State to be clubbed into separate groups
– Each group to be counted as a single entity by NLDC
• Payment by PX to NLDC
– Transmission and Operating Charges: By next working day
– Preferred Mode: Electronic Fund Transfer
42. Treatment Of Losses
• Average transmission losses of the respective region
to be applied, both on Buyers and Sellers
– Sellers to inject extra power (MW) in addition to
contracted power (Contracted Power + Losses)
– Buyers to draw less power (MW) than contracted power
(Contracted Power – Losses)
• Applicable losses to be declared in advance
• Intra-State losses to be taken care of by the
respective SLDCs
• Additional losses for wheeling, if necessary
– To be notified in advance by NLDC
– Applicable only for Injection
NLDC 42
43. Real Time Congestion Management
• Curtailment
– By RLDCs at the periphery of Regional Entities
SLDCs to further incorporate this curtailment for State
Utilities/Intra-State Entities
• Settlement
– Transmission Charges: Pro-rata refund by NLDC to PX
– Operating Charges: Not to be revised
– Direct settlement between PX and its participants
44. N L D C
Power Exchange
RLDCs
Information
exchanged over
leased line between
NLDC and PX
SLDCs
Final Trade Results for State Utilities & Intra State
Entities to be sent by PX directly to SLDCs
Information Exchange
ProvisionalSolution
RequestforScheduling
46. Demarcation into Bid Areas
Area Region States
N1 North JK, HP, CHD,
PUN, HAR
N2 North RAJ,DEL, UP,
UTT
W1 West MP, CHTG
W2 West MAH,GUJ, GOA,
DD,DNH
S1 South AP, KAR, GOA
S2 South TN, KER, PONDY
E1 East WB, SIK, BIH,
JHAR
E2 East ORISSA
A1 North-East TRIP, MEGH,
MANI, MIZO
A2 North-East AS, AP, NAGA
NLDC 46
48. NLDC 48
Congestion Management - Market Splitting
Cost of Congestion: 2000
Zone – A
Load=100
MW
Zone – B
Gen=120
MW
Case – I : No Transmission
Constraint
ZONE - A (LOAD)
0
50
100
150
200
250
300
0 20 40 60 80 100M W
PRICE
ZONE - B (GEN)
0
50
100
150
200
250
300
-140 -120 -100 -80 -60 -40 -20 0MW
MCP=125
Case – II : Constraint = 40 MW
Solution:
• Increase price in Zone A to reduce demand to 40
MW
• Decrease price in Zone B to reduce supply to 40
MW
50. Congestion Management in Multi Exchange
Scenario (1)
• ISSUE
– Sharing of available margins
• Possible Methods
– Priority Based Rules
– Explicit Auction
– Merging of Bids
• Priority Based Rules
Lowest MCP
Highest MCV
Highest MCP X MCV
Maximization of Social Welfare, consumer surplus, etc.
May not lead to an overall economy
NLDC 50
51. Congestion Management in Multi Exchanges
Scenario (2)
• Explicit Auctioning amongst Exchanges
– Inter-dependencies in the Indian scenario
– Difficult to implement
• Merging of bids obtained by each Power Exchange
– Equivalent to system operator interfacing with only one
Exchange
– Confidentiality issues
• Pro – rata rationing of available margins
– Simple to implement
– Sub-optimal method
– Possibility of over-estimation of capacity
– Further complications
Arising out of inter-dependencies in the Indian scenario
NLDC 51
52. Implementation in India
• Worldwide, one Power Exchange dealing with
physical delivery in one market
• Pro-rata sharing of available margins
– Applied on cleared trade volumes on each area and
each corridor
– Interim arrangement
– Debate on for a more optimal method
NLDC 52
53. Discovery of Multiple Prices & Interplay
• Prices discovered in Power Exchange
– Reflection of anticipated UI price for the next day
• Multiple Prices
– Collective Transactions:
Two prices – one for each exchange
– Two Grids – two UI Prices
– In case of congestion, market split
Area prices
Multiple exchanges
NLDC 53
54. Case Study
• No congestion till onset of severe winter
• Occasional congestion after 12th Dec 08
– Foggy conditions in Talcher area
• Case of 12th Dec 2008
– Period of Congestion: 0500 – 0600 Hrs
– Congested Corridor: Total import to SR
– TTC to SR reduced from 4000 MW to 3600 MW
– Total provisional requisition: 1430 MW
– Total trades cleared: 1091 MW
– Market split into NEW Grid and SR Grid
– MCP [IEX website]:
NEW Grid: Rs. 4.80 per kWh
SR Grid: Rs. 6.00 per kWh
– Cost of Transmission discovered
Rs. 1.20 per kWh
NLDC 54
62. CASE OF MCV INCREASE AFTER CONGESTION
• Day ahead Market
saw increase in
Cleared Volume after
congestion is
declared in particular
time blocks due to:
– Block –bids
– New Sell/Buy bid
getting cleared in
Final iteration
NLDC 62
SOURCE:IEX Website
66. Dealing in Renewable Energy Certificates (1)
Provisions in the CERC REC Regulations, 2010
Regulation 8.1
•“Unless otherwise specifically permitted by the Commission by order, the
Certificates shall be dealt only through the Power Exchange and not in any other
manner.”
Regulation 8.2
•“The Certificate issued to eligible entity by the Central Agency may be placed for
dealing in any of the Power Exchanges as the Certificate holder may consider
appropriate, and such Certificate shall be available for dealing in accordance with
the rules and byelaws of such Power Exchange.
•Provided that the Power Exchanges shall obtain prior approval of the Commission
on the rules and byelaws including the mechanism for discovery of price of the
Certificates in the Power Exchange.”
• NLDC 66
67. Dealing in Renewable Energy Certificates (2)
• Statement 3.7.2 of the SOR on “Dealing in the Certificates”
states that
“The Commission has noted the observations and would like to
reiterate that provision in the Regulation that REC shall be dealt
only in the Power Exchange is adequate and also legally
sustainable. The nature of operation of Power Exchange (which
essentially is a platform where buyers and sellers buy and sell
at the price discovered by matching aggregate demand and
supply) is conducive to the development of the new and
emerging concept of REC. The Commission is well within its
jurisdiction under Section 66 of the Act to provide for the
specific manner in which this new concept should be evolved. In
any case this mechanism does not debar the traders from
facilitating transactions in REC as Members of the Power
Exchanges. The final regulations provide that the bye-laws of
power exchange to be approved by the Commission should
include price discovery mechanism.
NLDC 67
68. Pricing of Renewable Energy Certificates (1)
• Provisions in the CERC REC Regulations, 2010: Regulation 9.1
“ The price of Certificate shall be as discovered in the Power
Exchange. Provided that the Commission may, in consultation with
the Central Agency and Forum of Regulators from time to time
provide for the floor price and forbearance price separately for
solar and non-solar Certificates.
NLDC 68
68
CERC determined Floor price and Forbearance price for dealing in Certificates,
which shall remain valid up to FY 2012.
Non Solar REC
(Rs/MWh)
Solar REC
(Rs/MWh)
Forbearance Price 3,900 17,000
Floor Price 1,500 12,000
69. Pricing of Renewable Energy Certificates (2)
• Statement 3.8.2 of the SOR on “Pricing of Certificates” states
that
“ The Commission has noted the observations. As regards the
need for forbearance price, the Commission would like to
emphasize that forbearance price is necessary to avoid price
volatility which may defeat the very purpose of facilitating the
RPO compliance by utilities through REC mechanism. The
Commission has, however, acceded to the suggestion of
providing for minimum price for REC along with forbearance
price, to ensure the threshold level of revenue certainty. This is
considered necessary to instill confidence in the investors
towards REC mechanism. The Commission has also agreed to
the suggestion of providing for broad guiding principles which
the Commission would bear in mind while determining the
forbearance price.Suitable modifications have accordingly been
made in the draft regulations.”
NLDC 69
70. Trade & Redemption (1)
• Price Discovery in Power Exchanges
– Double sided auction
– Closed auction to start with, provision of continuous trade
– Uniform price, with provision for pay-as-bid in future
• Market lot = 1 REC
• Trading Sessions
– Monthly for the first year, frequency may be increased
depending on liquidity
– Non-Solar and Solar RECs
– Last Wednesday of every month
– Timing: 1 PM to 3 PM
NLDC 70
71. Trade & Redemption (2)
• Provisional Results
– By 3:30 PM from both PX to NLDC
– Max bid volumes, seller wise, to be sent to NLDC for
checking
• Post Trade Check
– Sellers to limit total sell in both the PXs to the total RECs
held by the concerned RE Generator such that the total
cleared volume is less than total RECs held
• Checking by NLDC
– For total quantum of bids in both the PXs taken together
– NLDC to revert back by 4 PM.
NLDC 71
72. Trade & Redemption (3)
• Default by Sellers
– In case of default by any Seller(s) in terms of volume, bids
of the defaulter(s) to be rejected in both the PXs and
auction to be run by both PXs excluding the defaulter(s)
bids.
– Defaulter can bid in the subsequent auction next month
onwards. In case of three defaults in a year, report to
CERC.
• Final Results
– By 5 PM from PX to CA
• Checking and Extinguish
– By the Central Agency by 6 PMNLDC 72
73. NLDC 73
Schematic Description of Procedure for Redemption
Obligated
Entity / Buyer
Obligated
Entity / Buyer
Eligible
Entity
Eligible
Entity
Power
Exchange(s)
Power
Exchange(s)
Offer for Sale
13:00 to 15:00 hrs
1a
Bid for Purchase
13:00 to 15:00
1b
Central
Agency
Central
Agency
Verification
Conditions
(By 15:30)
Verification
Conditions
(By 15:30)
22
Confirmation
Of REC validity &
quantity
(by 16:00)
Confirmation
Of REC validity &
quantity
(by 16:00)
Central
Agency
Central
Agency
Intimation of Trade results
For Extinguishing REC
(By 17:00)
3
Market Clearance
(Volume & Price)
ReportsReports
4
75. Information Dissemination
• Central Agency Website: www.recregistryindia.in
– List of Registered REC Holders
– Total quantum valid RECs as on date, trend for the
past
• Trade Results
– MCP and MCV on Power Exchange Websites
www.iexindia.com
www.powerexindia.com
• List of REC Buyers, obligated entities:
– PX to give monthly report to CERC/CA
• List of seller defaulters:
– PX Website / CA Website NLDC 75
76. Moving to the Next Level:
Some Issues under Discussion
NLDC 76
80. 01/13/15 POSOCO 80
Corridor Utilization
IEX Website
Congestion
Observed
Seasonally
Only towards
NR, SR and
S1 – S2
Only a couple of
corridors
congested
out of
a dozen
81. 01/13/15 POSOCO 81
Prevailing Scenario
• Shortages
– Round the clock and in all regions
• In many hours
– Sale bids >> Purchase bids
• Volume lost due to price mismatch is substantial
• Congestion
– During some hours
– Only couple of corridors facing mild congestion
– Margins available on other corridors
– Market split by very low price difference !!
• Need for an Evening Market in the Power Exchanges
82. 01/13/15 POSOCO 82
Advantages of the Proposed Evening Market
• Consumers
– More choice and satisfaction
• Sellers
– Another opportunity
• Further optimization of the portfolio
• Take a more informed position in the market
• Better utilization of uncongested and under-utilized
corridors
• More economy and efficiency
• Social welfare maximization
• Change in strategy and an overall improvement
• Likely that more volume is cleared
• Movement to the next level
85. NLDC 85
15 – Minute bidding in PX (1)
• USP of the Indian Market Structure
– 15 Minute Scheduling
– 15 Minute Metering
– 15 Minute Accounting
• Ramping Rate
– Hour boundary: high ramp rate (1000 MW)
Large Changes in HVDC set points (NEW – SR) in operation
– 15 minute bidding
facilitate gradual ramping up and down
provide operational ease to the participants
• Better portfolio management
• Better management of imbalances
– Deviations from the schedule
86. NLDC 86
15 – Minute bidding in PX (2)
• Encourage participation by the Renewable
Energy Sources
– Australian Market has adopted 5 minute interval for facilitation of
renewable energy sources
• Prices discovered in PX and UI Prices
– Hourly prices on the Power Exchanges
– UI Prices are on a 15 minute interval
– Introduction of 15 minute bidding would make the two comparable
• Both the Morning and the Evening Markets
should have 15 – minute bidding interval
88. CIGRE 2010:
Study Committee C5 on Electricity Markets
• Preferential Subject 1:
– Challenges of national or state regulations of transmission
and system operators in regional markets, L. A. Dale
– 8 Papers
• Preferential Subject 2:
– Impact of intermittent Resources or Demand Response on
Market Designs; Andrew L. Ott
– 10 Papers
• Preferential Subject 3:
– Interactions of environmental incentives and markets (e.g.
carbon) with electricity markets, Charles F. Zimmermann
– 4 Papers
89. C5-101: Experience of India’s first power
exchange and challenges ahead
• Outline of Electricity trading in India
• Features of Power Exchange
– Members and clients
– Delivery and interface with system operator
– Block bids
• Operational experience
– Participation level
– Price trend and volatility
• Issues and challenges
– Propensity to over draw rather than schedule power
– Last priority to power exchanges in transmission capacity
allocation
– Price cap on day-ahead transaction
90. C5-102: Harmonization of cross border transmission
capacity allocation within the Central West Europe region
• Presentation of CWE Region (Belgium, France,
Netherlands, Luxembourg and Germany)
– harmonisation of the rules for allocating the transmission
capacity within CWE
• The establishment of the Joint Auction Office (JAO)
• The scope of activities of the Joint auction office
– allocating the daily capacity on the German borders
– Operating the explicit daily auctions on Belgium borders
– Coupling fallback
– Collecting and sharing the congestion revenue for the
TSOs
• Harmonisation and improvement of the auction rules
• Brief of CWE Market Coupling project
91. Attempt to Harmonize in Europe (C5-102)
• definitions,
• products to be auctioned,
• participation requirements,
• financial guarantees,
• firmness of both allocated capacities and nominated programs,
• definition of force majeure,
• bids format,
• time schedule of the auctions,
• compensation/reimbursement in case of reduction,
• payment modalities,
• secondary market principles (”use it or sell it”),
• responsibility of parties,
• the suspension/termination of contract conditions.
92. C5-106 : Czech and Slovak spot electricity market
coupling on the basis of implicit capacity allocation
• Daily transactions between the two market areas take place
exclusively in the form of implicit auctions.
• The implicit auction office is a virtual area in the information
system of one of the market operators; it ensures that sell bids
and buy bids in the two market areas are matched.
• The virtual office is a part of both information systems, and the
two market operators will alternate in performing the function
of the virtual office.
• Implicit auctions are based on the principle of price coupling;
• In the event of capacity constraints at the interconnection point
the market splits, and two prices are created.
• In the event of transactions constrained due to congestion and
market split, the price difference generates an implicit auction
price that generates revenues allocated between the two
transmission system operators.
93. C5-107: Multiple power exchanges in India – a case
study
• Study of the experience gained from the operation of multiple
power exchanges in a single physical delivery market in India
• Salient features of PX implementation in India
• Allocation of available transfer margins,
• Congestion management
• Interplay between the bilateral market, day-ahead market in
Power Exchanges and the real time market.
• Issues
– Multiplicity of price signals
– Regulatory overlap – forward price signals
– Regulatory uncertainty – price caps
– Transmission pricing & losses
– Balancing market guiding vector
– Available margins for the PXs
– Impact of block bids