Evolution of Power Exchange

S. C. SaxenaNational Load Despatch Center

Power System Operation Corporation Ltd.

Market Design

IMBALANCESCONGESTIONMANAGEMENT

ANCILLARYSERVICES

SCHEDULING & 

DISPATCH

ELECTRICITY MARKET

“Making Competition Work in Electricity”, Sally Hunt

Four Pillars of Market Design

Evolution of Power Market in India

10/5/2013 NLDC - POSOCO 32004: Open Access

2008: Power Exchange

FUTURE … • Ancillary Market • Capacity Market• Peaking Power

2009: Imbalance (UI)

2011: Transmission Pricing (POC)

2010: Power Market, REC

April, 2012: Sub-Hourly Market (15 Min Bidding in PX)

2009: Grant of Connectivity,LTA and MTOA

2009: Trading License

2009: Congestion Management

25 – 12 Years 3 Years –3 Months

< 3 Months

Medium Term

Short TermLong Term

Products in the Short Term Market

Bilateral -Advance

Bilateral - FCFS PX Day -

AheadContingency

Products in Different Time Frames

Implementation of Power Exchanges in India - The Milestones

July 2006Staff Paper by CERC

February 2007CERC Guidelines for establishment of Power Exchange

August 2007In principle approval to the first power exchange in the country

January 2008Revised Regulations for Open Access in Inter-state Transmission, Effective 1st April 2008

June 2008Procedure for Scheduling of Collective Transactions Commencement of operations of first Power Exchange (IEX)

October 2008Second Exchange (PXIL) begins operations

5

Regulatory Framework for Market by CERCIndian Electricity Grid Code (IEGC)Short Term Open Access Regulations

Bilateral TransactionsCollective Transactions

Power Market RegulationsScope & Extent

OTC MarketsPower Exchange MarketOther Power Exchange Markets

Types of ContractsDelivery based OTC ContractsDelivery based contracts transacted on ExchangeREC ContractsFinancially settled electricity derivatives contracts transacted in OTC market (future)Capacity, Ancillary, Derivative based contracts (future)

NLDC 6

Indian 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 7

Power Exchange Operations

8

MCV

MCP

PRICE

SalePurchase

Accepted Purchase Bids (>= MCP)

(Consumers’ Discount)

Accepted Sale Bids (<= MCP)

(Generators’ Surplus)

Salient FeaturesMultiple Power Exchanges

Competition amongst Exchanges

Day-ahead exchangeVoluntary participationDouble sided biddingUniform pricing15 Minute bidsCongestion management by market splitting

Social Welfare Maximization

Transfer Capability Assessment by System Operators

POWERGRID 10

Intra-day STOA

Day-ahead STOA

Collective (PX) STOA

First Come First Served STOA

Advance Short Term Open Access (STOA)

Medium Term Open Access (MTOA)

Long Term Open Access (LTOA)

Reliability Margin (RM)

Available Transfer Capability is

Total Transfer Capability less Reliability Margin

TTC ATC

RM

Congestion Management: Bid Area

Area Region States

N1 North JK, HP, CHD, HAR

N2 North RAJ,DEL, UP, UTT

N3 North PUN

W1 West MP

W2 West MAH,GUJ, GOA, DD,DNH

W3 West CHTG

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

Charges and losses for any transactionCharges settled directly between buyer/seller and PX

Energy charges as per schedulePX Charges

Charges settled through System OperatorCharges for imbalance/deviationsTransmission charges

For inter-state transmission system – POC charges for injection and withdrawalFor intra-state system – As specified by respective SERC

Operating ChargesApplication Fees

Transmission LossesPOC losses for inter-state system (additional losses are applicable for use of intra-state system)To be paid in kind 12

Trade under STOA (Bilateral + Collective)

7467

55

393130

242317

32066

24111

19883

1812815414

956059333938

7780

10

20

30

40

50

60

70

8020

04-0

5

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

Ener

gy (B

Us)

-----

>

0

5000

10000

15000

20000

25000

30000

35000

40000

Num

ber o

f Tra

nsac

tions

---->

Volume of trade (BUs) No. of transactions

17

Information dissemination by the Power Exchanges

IEX

PXIL

Market Monitoring Cell of CERC

19

www.cercind.gov.in