Iex Enertia 210809

Electricity Trading at IEX

In this presentation … ™ Indian Power market ™ Who are we ? ™ Day-Ahead Market ™ IEX Journey so far… ™ Membership

Indian Power Market Indian Power Market

Long Term PPA’s

Short Term Bilateral 1 Direct 2 Trader

1.Day Ahead 2. Same day 3. FCFS 4. Upto 3 months 5. Banking

Exchange Day Ahead 1. 2. 3. 4. 5.

Intra day DAC Daily Weekly Monthly

UI Real Time

Electricity Market Segments(Oct,08)

Long-term market State Sector generation

Central Sector generation

Short-term market (7%) Pvt Sector Generation

Short-term Market UI

(43 %)

Exchange (9 %)

Bilateral Market (48%) Direct Trading

7%

As per CERC October MMC Report

Through Traders

41%

IEX : Who are we ? Promoters

Joint Equity Partners:

Technology :

Technology •

The leading technology provider to the world’s most liquid power exchange, NORDPOOL.

•

Also own all exchanges in Nordic countries except NORDPOOL Spot

•

Also owns exchanges in the Nordic and Baltic regions

•

Four power exchanges in Europe currently using technology. .

Background….. CERC accorded approval to IEX to commence operations

9th June, 2008

IEX Commences Live Trading

27th June, 2008

IEX Files application for approval of Term-Ahead Contracts (TAM)

2nd Sept, 2008

CERC asked NLDC & IEX to finalize changes in procedures

18th Nov, 2008

CERC gave in-principle approval

27th Nov,2008

CERC amends the inter-state open access regulations

20th May, 2009

IEX filed affidavit with modified Rules Bye Laws & Business Rules

22nd May, 2009

Day Ahead Market

IEX - DAM Product Description • Order Types: – Hourly Orders • 1 hour • Max/Min Price, Volume, Hour • Different Price-Quantity Pairs • Partial Execution Possible – Block Orders • Consecutive hours during the same day – Customize block bid allowed

IEX - DAM Product Description • Order Characteristics – Firm commitment to purchase or sell – Min and Max order price – Portfolio and Block bids

• Trading Availability – Every Calendar Day

• Order Entry – Entry for orders related to Delivery Day (D day) possible on D-1 from 10:00 hrs to 12:00 hrs

• Contract – – – –

Contract Size: Minimum 1 MWh Minimum volume step: 0.1 MWh Minimum price step: Rs 1 per MWh Total Contract Price: Order Volume multiplied by ACP

IEX - DAM Product Description • Finalising Trades – 24 hour prices at 15:00 hrs of D-1 day – Determine the trades accepted

• Delivery Point – Periphery of Regional Transmission System in which the gridconnected exchange entity, is located

• Settlement – Daily settlement at ACP x Volume traded – Final settlement adjusted for any force majeure deviations

• Security of Transactions – IEX act as counter party

Price Calculation Algorithm ….each hour Price (Rs./kWh) 0

1

1.1

2

2.1

2.5

3

3.1

20

20

0

40

40

40

-40 -60

-80

Portfolio A, MW 20 Portfolio B, MW 60

60

Portfolio C, MW 40 20

0

0

SUM, Purchase 120 100

80

80

SUM, Sale

0

0

Net transaction 120 100 80

80

40

60

4

4.1

20 0

40

20

20

-81 -120

60

60

-40 -60

-80

-81 -120

-120

20

-20

-21 -80 -100

-100

0

40

40

-120

20

20

250 250 5

Price Purchase

200 4 200

Sale

Price ($/MWh) ($/MWh) Price Rs./kWh

4

MCP: 2.5

3 Rs/kWh 2

3

150 150 100 2 100 50 150

MW 40

80 60 MW

120

MCV (Market clearing volume):

2.5

00 -150 -150

-100 -100

-50 -50

00 MW MWbalance balance

50 50

100 100

150 150

Trader Station: Single Bid

Trader Station: Block Bid

Time Line for scheduling of Collective Transaction

10:00

12:00 13:00 14:00

Market Participants to place their Bids PX to send provisional unconstrained solution to NLDC and flow on TS as informed by NLDC

NLDC to check for congestion. In case of congestion shall intimate PX regarding to the period for congestion and available margins

15:00 17:30

18:00

NLDC to confirm acceptance. PX to send files to SLDCs for scheduling

PX to send Scheduling Request to NLDC based on margin specified by NLDC

RLDCs/SLDCs to incorporate Collective Transactions in the Daily Schedule

Risk Management System ¾ D-1 At 09:30 Hrs : Pre-trade Margin Check. ¾ equal to the initial margins or average of last 7 days’ trading value, whichever is more. ¾ D-1 At 12:30 Hrs : Preliminary Obligation Margin Check Preliminary Obligation =< Funds Available (incl initial margin) Block funds. ¾ D-1 At 15:30 Hrs : Pay-ins ¾ At D+1 14:00 Hrs : Pay-out.

Benefits to Participants • Better Price Discovery – Neutral and unbiased platform – More transparent price discovery mechanism • Less Overheads – Reduces search cost – No hassle of transmission corridor booking – No negotiation • Payment Security undertaken by PX – Healthy cash flow as pay-out on immediately after delivery date • Better Price Signals – Empowers demand-side responses to price-signals and more economic grid operation – Provides long-term and short-term price signals • Single-point check on non-competitive practices (market power, price manipulation etc.) – Priority over 3 day ahead for IEX transaction

IEX Participant Snapshot (till 31st July’09) Private

Public

Total no. of Member/Clients

125

31

Active members/Clients

101

28

Captive Power Plants

64

3

3,340 (MW)

11,440 (MW)

SLDC Clearance to trade (Active Members & Clients)

Increase in Participants (till 31st

July, 09)

IncreasingParticipations

156 150

147

Maximum Active Portfolio

N o . o f P a rtic ip a n ts

123 120

Member & Clients 89

90

58 60

57

62

64

67

72

78

79

81

73 69 34

30

6

13

16

21

20

27

95

24

25

36

35

24

0 8 8 8 9 8 8 9 8 8 09 09 09 09 09 '0 '0 '0 '0 '0 '0 '0 '0 ' ' '0 ' ' t t ' l v c b y y e g e n y i c l l p h n O pr Ja Fe un No De rc Au Ju Ma Ju Se Ju A J a M

Months

Volatility of Day-Ahead Market (Min& Max price in a day) 16,000 14,000

10,000 8,000 6,000 4,000 2,000

Delivery day

ul -J 31

ul -J 24

ul -J 17

ul -J 10

l Ju 3-

26

-J

un

un 19

-J

un -J 12

n Ju 5-

ay 29

-M

ay 22

-M

ay -M 15

M 8-

ay

M

ay

0

1-

Price (R S/M W h )

12,000

IEX: Performance so far… • Wide-ranging participation across the nation – 23 states & 4 UTs – 129 portfolios – Smooth Coordination with System Operators

PXI

IEX

• Adequate Liquidity (June – 31st July’09) – 4.22 BUs Cleared Volume (single side) – Rs 3,398 Crs Turnover – All time high of • 26.43 MUs (20th June,09) • 28.27 MUs unconstrained (3rd July 09)

IEX

PXI

Nationwide acceptance… State Utilities

CPP

Green Power Open Access consumer

Total Participants 156

15000

90000

13500

80000

12000

70000

10500

60000

9000

50000

7500

40000

6000

30000

4500

20000

3000

10000

1500

0 l-0 9 24

-J u

9 n0 -J u 24

25

-M

ay

-0 9

9 -A pr -0 25

-0 9 26

-M

ar

b0 -F e 24

-J a 25

9

n09

8 c0 -D e 26

-N ov 26

-O 27

08

8 ct -0

8 p0 -S e 27

-A ug -0 8 28

-J u 29

-J u

n0

8

l-0 8

0

Date Total Sale Bid(MWh)

Total Purchase Bid(MWh)

Average MCP

Avg price (Rs/MWh)

100000

28

Volume (MWh)

DAM: Demand Supply Gap

IEX Score (till 31st July, 09) IEX Price & Volume Trend 12 10.47 500 400

10

8.46 7.66 7.73

8.36

7.56

7.50 7.68

450

300 376

6.14 5.62

6.42

377

478 379

6.20 6.41 323

355

434

6 4.62

291

200 233

4

279 180

100 0.42

8

2

75 0

0 June 08 July 08

Aug 08

Sept 08

Oct 08

Nov 08

Dec 08

Jan 09

Feb 09 March 09 April 09 May' 09 June' 09 July'09

Months Total Monthly Volume (MUs)

Monthly Avg Price (Rs/kWh)

P ric e (R s /k W h )

M o n th ly V o lu m e ( M U s )

600

IEX Hourly MCV & MCP( April 2009) 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00

700

Volume(MWh)

600 500 400 300 200 100 0 1

2 3 4

5 6 7

Prices(Rs/kWh)

IEX Average Hourly M CV & M CP for April, 2009

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hours

MCV(Hourly)

MCP(Hourly)

IEX Hourly MCV & MCP( June 2009) IEX Average Hourly M CV & M CP for June 2009 1200

13.00 12.00 11.00

1000

9.00

800

8.00 7.00

600

6.00 5.00

400

4.00

Prices(Rs/kWh)

Volume(MWh)

10.00

3.00 200

2.00 1.00

0

0.00 1

2 3 4

5 6 7

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hours

Hourly Avg. Volume

Hourly Avg. Price

IEX Hourly MCV & MCP( July 2009) IEX Average Hourly M CV & M CP for July 2009 700

13.00

600

11.00

500

10.00 9.00 8.00

400

7.00 6.00

300

5.00

200

4.00 3.00

100

2.00 1.00

0

0.00 1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hours Hourly Avg. Volume

Hourly Avg. Price

Prices(Rs/kWh)

Volume(MWh)

12.00

MEMBERSHIP

Who Can become Members of IEX ? Entities eligible for Membership: ƒ Inter-State Generating Stations (ISGS) ƒ Distribution Licensees ƒ State Generating Stations ƒ IPPs ƒ CPPs and IPPs (with consent from SLDC)

ƒ Open Access Customers (with consent from SLDC)

ƒ Electricity Traders / Brokers

IEX Membership Category

Proprietary Member (*) (right to trade and clear on its own account)

Professional Member (trade and clear on his own account & on behalf of its Clients) ¾Electricity Trader ¾Financial Brokers

¾Generator ¾Distribution licensees ¾ IPPs, CPP’ & MPPs ¾Open access consumers

Grid-connected Client (*) (eligible to buy or sell electricity and is connected to the grid.)

¾Generator ¾Distribution licensees ¾IPPs, CPPs & MPPs ¾Open access consumers * Denotes that foll. Entities requires Standing Clearance from SLDC

Trader Client (is eligible to trade in electricity under the Electricity Act, 2003 and has a legally valid power purchase/sale agreement, which gives the Client the right to purchase and sell electricity )

Membership Category and Financial Requirements Membership Category: Proprietary / Professional Member The financial criteria for payment options available on IEX are: Fees

Professional & Proprietary Proprietary member member (Light Payment Option) (Full Payment Option)

Admission fee

Rs. 35,00,000*

Rs. 10,00,000

Interest Free Security Deposit

Rs. 25,00,000

Rs. 10,00,000

Annual Subscription Fees

Rs. 5,00,000

Rs. 2,50,000

Rs. 10,000

Rs. 10,000

Rs. 65,10,000

Rs. 22,60,000

Processing Fees

TOTAL

How to Move Ahead… ►

Become Member » » »

►

Standing Clearance from UTs/State SLDC »

Eligibility » »

►

ABT Meters Sufficient transmission capacity

Terminal for Trading: »

Connectivity with exchange can be done in two ways » »

►

Rs 22.6 Lacs +2p/kWh transaction fee or Rs 65.1 lacs + 1p/kWh transaction fee or Client @ 1Lakh

Internet Immediate Leased Line

Start Buying from IEX or Sell surpluses to IEX

IEX Initiatives Continuous communication with Users

IEX Daily SMS Service for Trade Details

IEX hourly Trade Prices displayed on its website

IEX Monthly Bulletin

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