Cross Border Electricity Trade,SAARC centric.

1. Cross Border Electricity
www.iexindia.com
Trade
Rohit Bajaj
VP (BD)

2. In this presentation
Introduction to Exchange
Mechanism
Proposed mechanism for cross
border trade through exchange
International examples
Way Forward for SAARC
Exchange

3. Introduction to Exchange
Mechanism

4. Company Snapshot
96% Market Share ~80,000MWh average daily trade
3000+ Participants 2100+ Industries
Transparency Liquidity
Competition

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. 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. DAM Cleared Volume and
Market clearing price (MCP)

8. DAM Monthly average Price

9. Proposed mechanism for cross
border trade through Exchange

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. 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. 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. 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. 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. International Experience

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. Way forward for SAARC
Exchange

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. 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. 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. 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. 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. 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. 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