Trading on a Power Exchange:

Indian Energy Exchange

Company Snapshot

 Market Share: 98%

 Average daily trade: ~100,000 MWh
 High Participation: 4300+

3800+ Industries I 40+ Discoms (all) I 380+ Generators

Transparency Liquidity

Competition
IEX Market Segments
Delivery-based Contracts

E Day-Ahead 10-12 AM bidding

L Each 15-min block , 0.1 MW min NOC required
E Market
C since June,08
T
R Day-Ahead Contingency – Another window 3-11pm
I Term-Ahead
C Market Intra-Day - for the same day, delivery from 04:00 to 24:00
I
since Sep,09 Daily- for rolling seven days (delivery starting after 4 days)
T
Y Weekly- for 1 week (Monday-Sunday)

Renewable Energy Green Attributes as Certificates

C Certificates Sellers : RE generators not under feed in tariffs
E Buyers: Obligated entities
R
since Feb,11
1MWh equivalent to 1 REC
T
S
Coming Soon… Energy Saving Certificates
Auction Continuous
Contract Specifications

ELECTRICITY

Day Ahead Market (DAM) Term Ahead Market (TAM) Renewable Energy Cert’ (REC)

Day Ahead 1. Intra-day 2. Day Ahead 3. Daily 4. Weekly REC Market

Market Contracts Contingency Contracts Contracts

Delivery 0400-2400 From 4th

For next For next Next day
Next day Hrs same
day
day to next
week
day 7 days

Auction
Closed Continuous Continuous Continuous Open Closed
Type
Auction Trading Trading Trading Auction Auction

Contract 15 Block of Block of

Unit Hourly Hourly 1 Cert’
minute Hours Hours
DAM Trading Process

Review corridor
Bidding Matching and funds Result Confirmation Scheduling
availability

10:00 am to 12:00 pm to 1:00 pm to 3:00 pm 5:30 pm 6:00 pm

12:00 pm 1:00 pm 2:00 pm

Bids for 15- MCP Corridor Final ACV and Collective Final Schedule
min each &MCV availability ACP transaction sent to RLDC
or block calculated and funds calculated. confirmation for
bids can be verified Market by NLDC incorporation
placed splitting if
congestion
Market Place Functionality(DAM)
Market Place Functionality(TAM)
Prov. Format-1
& Format-2
generated
electronically Member Member sends IEX applies to
& sent to obtains SLDC the SLDC
Clearance Nodal RLDC
Clearance to
Members
IEX

Bids are Receipt of Nodal RLDC

validated, Acceptance by IEX
accepted and
Margins are
Matched
collected
Reports are
generated

Information
Bid entry dissemination
Financial
Settlement
Bid Types

• Bids for each 15 min • Relational Block Bid

can be entered for any 15 min
• Varying price and • Mother or child bid
quantum pairs • No circular links
• Allow partial execution • No partial execution

Single/Portfolio
Block Bid
Bid
BID MATCHING

Open/Closed Continuous
Auction Trading

Orders accumulated during

call phase (no matching) Price-time priority based
continuous matching

Orders matched after call

period The highest Buy order &
lowest Sell order gets the
Orders are used for priority
calculation common price
i.e. Equilibrium Price.
If the prices are same then
All successful orders priority is given to the time
matched at Equilibrium of the order received.
Price.
Understanding of Single Bid
Buy Bid: One or more quantity-
price pairs at which the
participant is willing to buy the
corresponding quantity of
electricity and are submitted
independently for each delivery
period i.e. 15 mins
Sell Bid: One or more quantity-
price pairs at which the
participant is willing to sell the
corresponding quantity of
electricity and are submitted
independently for each delivery
period i.e. 15 mins
Model Price Calculation algorithm
Price Tick (Rs.) 0 1 1.1 2 2.1 2.5 3 3.1 4 4.1 5 --- --- ---- 20

20 20 20 20 20 20 20 10 0 0 0 0 0 0 0
Bid Quantum Portfolio A, MW
by different Portfolio B, MW 60 60 60 60 50 40 40 40 40 40 20 20 20 20 20

portfolios Portfolio C, MW 40 20 0 0 -40 -60 -80 -81 -120 -120 -120 -120 -120 -120 -120

120 100 80 80 70 60 60 50 40 40 20 20 20 20 20
Total Buy Quantum received, MW
0 0 0 0 -40 -60 -80 -81 -120 -120 -120 -120 -120 -120 -120
Total Sell Quantum received, MW
120 100 80 80 20 0 -20 -21 -80 -100 -100 -100 -100 -100 -100
Net Transaction, MW
Price

Demand Supply
(Buy) (Sell)

Market clearing
price (MCP) 2.5

60 Volume MW
Market Clearing Volume (MCV)
Understanding of Block Bid
A block bid is used for the procurement or sale of power which is specific to a block of hours (e.g. base
load, peak or user defined). A block bid can either be a buy order or a sale order for a block of hours.
Either all hours of the block order are jointly successful or all of these block hours are jointly rejected.
A block bid is selected if the bid price is better than the average system price of power in respective
block hours.

Example of Sell Block Bid:-

System Price:-

Selection Criteria:- A sell (respectively buy) bid is said to be selected if the submission price of the bid
is below (respectively above) the average system price.
Result for 1st Block Bid-
E5 at 5000 for 50 MW Sell is at below price than Average Price of Rs. 5875.90; hence will be selected.
Result for 2nd Block Bid-
E6 at 7000 for 50 MW Sell is at above price than Average Price of Rs. 5875.90; hence will be rejected.
Algorithm of Price Calculation
• Step 1: Unconstrained Solution (w.r.t. Transmission Capacity)
- Find MCP and MCV; Demand=Supply on aggregated net curve.
• Step 2: After receiving the actual ATC, examine bid area for
bottlenecks.
• If a bottleneck is found, the market is split in two partial calculation
area: Source (surplus) and sink (deficit).
• A new ACP is found in both source and sink.
- Surplus Lower ACP than MCP
- Deficit Higher ACP than MCP
• Each partial calculation area is examined for bottlenecks in the same
way.
• When no more bottlenecks are found internally in the calculation area,
the recursion stops.
Congestion Management
SR WR

S3
S1 S1
Deficit
50
50
150
30
50
B2
B3
S2
B1
MW
MW
MW
MW
407500
MW
80
S2
S3
B1
Surplus
100MW
120
100 MW
MW
RS
RS 8000 RS
RS 8000
5500
RS 9000
6000
100 MWRS 9000
RS 8000
8500
100 MW

B2 Required
S3 160 MW Flow
Rs 9/u S2
50 MW 100 MW
Rs 7.5/u 100 MW
Rs 5.5/u
B1
S1 50 MW S2
50 MW RS 8.5/u 20 MW
Rs 8/u Rs 8/u
S2 S1 B1
B3
40 MW 80 MW 100 MW
30 MW
Rs 8.5/u Rs 9/u Rs 6/u
Rs 8/u
Congestion Management
SR WR

Deficit Surplus
100
20 MW
MW 100
20 MW
MW
Lowest Buyers getting rejected
Highest Seller getting rejected
B2
Allowed
160 MW
S3 RS 9000 Flow S2
50 MW 20 MW 100 MW
RS 7500 B1 RS 5500
S1 50 MW S2
50 MW RS 8500 20 MW
RS 8000 RS 8000
S2 S1 B1
B3
40 MW 80 MW 100 MW
30 MW
RS 8500 RS 9000 RS 6000
RS 8000
Illustration of Price Matching and
Market Splitting
• Two regions have been considered i.e. ER and SR.
• Four Sellers and Two Buyers in a 15-Min Block are taken with following Bid Scenario: -

Seller Seller Seller Seller

200 MW @2000 100 MW@3000 100 MW @3000 100 MW@4000

ER REGION SR REGION

Buyer Buyer
100 MW @3000 300 MW @4000

Quantity (MW) Price (Rs./MWhr)

ER Seller-1 200 2000
ER Seller-2 100 3000
SR Seller-1 100 3000
SR Seller-2 100 4000
SR Buyer 300 4000
ER Buyer 100 3000
Understanding Price Matching

3005
ER Seller-1 ER Seller-2 SR Seller-1 SR Seller-2
Total Buy (MW) SR Buyer
Total Sell (MW) ER Buyer
3004
200 MW@ 100 MW@ 100 MW@ 100 MW@ 300 MW@ 100 MW@
3003 Demand-Supply
2000/MWhr 3000/MWhr 3000/MWhr 4000/MWhr intersection
4000/MWhr with
3000/MWhr
3002

3001
high resolution
3000

2999

2998
150 200 250 300 350 400
(300,4000)
(300,4000)

(500,4000)
(500,4000)
(500,4000)

(400,3000)
(400,3000)
(400,3000)
(400,3000)
(400,3000)

(200,2000)
(200,2000)
(200,2000)
(200,2000)
(200,2000)

Market Clearing Price (MCP)= Rs. 3000/MWhr

Market Clearing Volume(MCV)= 400 MW
REQUIREMENT OF CORRIDOR FROM NLDC

ER SR

Net Demand 100 Net Demand 300

Net Required Flow- 200 MW

Net Supply  300 Net Supply  100

Net  100 – 300 = -200 Net  300-100 =200

Demand and Supply gap in two regions get balanced by unconstrained flow between the two
regions hence a common MCP is derived.

Seller Seller Seller Seller

200 MW 100 MW 100 MW 0 MW

ER REGION SR REGION

Buyer Buyer
100 MW 300 MW
Constraint Solution (Market Splitting)

Congestion was reported by NLDC from ER to SR corridor and flow is constrained to 100MW.
Due to flow constraint, system will “Split” the market in to two regions i.e. Deficit (SR
Region) and Surplus region (ER Region),and will again run the calculation chronology for
both the regions separately considering the flow constraint and will derive the ACP and ACV.

Price
(Rs./kWh) 0 999 1000 1999 2000 2999 3000 3001 3999 4000 4001 6000 8000 10000 20000

ER-SurplusER Seller-1 0 0 0 0 -200 -200 -200 -200 -200 -200 -200 -200 -200 -200 -200

Region ER Seller-2 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100 -100 -100 -100
ER Buyer 100 100 100 100 100 100 100 0 0 0 0 0 0 0 0
100 100 100 100 -100 -100 -200 -300 -300 -300 -300 -300 -300 -300 -300
Net (Buy-Sell)

Flow Towards SR of 100 MW

Price
(Rs./kWh) 0 999 1000 1999 2000 2999 3000 3001 3999 4000 4001 6000 8000 10000 20000
SR-Deficit SR Seller-1 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100 -100 -100 -100

Region SR Seller-2 0 0 0 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100

SR Buyer 300 300 300 300 300 300 300 300 300 300 0 0 0 0 0
Net (Buy-Sell) 300 300 300 300 300 300 200 200 200 100 -200 -200 -200 -200 -200
TAM Market Segments

Open Auction Continuous

Continuous Continuous
 TWS Screen
CONTINUOUS
Pending Buy Order TRADING PROCESS
Pending Sell Order
Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ RS 5500/MWh

Trading Engine
Buy 10 MW @ RS 4500/MWh Sell 15 MW @ RS 5500/MWh

Buy 10 MW @ Rs 4500/MWh Sell 15 MW @ Rs 5500/MWh

 TWS Screen
Pending Buy Order Pending Sell Order
Buy
Buy1010MW
MW@ RS
@5000/MWh
4500 Sell 15 MW @ Rs 5500/MWh

Buy 10 MW @ RS 4500/MWh

Trading Engine
Buy 10 MW @ RS 5000/MWh

Buy 10 MW @ 5000/MWh
 TWS Screen
Pending Buy Order Pending Sell Order
Buy
Buy1010MW
MW@ RS
@4500/MWH
5000 Sell
Sell515
MWMW
@ Rs@
5000/MWh
5500
Buy 10 MW @ 4500

Trading Engine
Sell 15 MW @ Rs 5000/MWh

Trade 10 MW @ RS 5000/MWh
Bid Modified

Sell
Sell1515
MWMWh
@ RS 5000/MWh
@ 5500
REC Mechanism

Procedure for ACCREDITION (Through State nodal Agency)

Procedure for REGISTRATION (Through Central Agency NLDC)

Procedure for ISSUANCE (Through Central Agency NLDC)

Procedure for TRADING & REDEMPTION(Through PXs)

Salient Features of REC Mechanism
Participation Voluntary
REC Denomination 1 REC = 1 MWh
Validity 1095 Days after issuance
Categories 1. Solar REC 2. Non-Solar REC
Trading Platform Power Exchanges only
Banking/Borrowing Not Allowed
Transfer Type Single transfer only , repeated trade of the same certificate is not
possible
Solar RECs Floor Price: Rs 1,000 /MWh
Forbearance Price: Rs 2,400/MWh
Non Solar RECs Floor Price: Rs 1,000/MWh
Forbearance Price: Rs 3,000/MWh
Penalty for Non-compliance ‘Forbearance’ Price (Maximum Price)
Price Guarantee Through ‘Floor’ Price (Minimum Price)
Trading at IEX

Trading Day Last Wednesday of every Month

Market Clearing Closed Double sided auction

Trading Time 1300-1500 Hrs

Verification by Central agency for Valid REC by

By 1530 Hrs cleared seller at IEX

By 1600 Hrs Central agency confirms REC

By 1630 Hrs IEX finalizes trade

By 1700 Hrs Buyer & Sellers informed to Central Agency

By 1800 Hrs Invoice raised (proof of REC trade)

Thank You
www.iexindia.com

Leader in Market Development– India Power

Awards ‘15

Best Power Exchange in India

– Enertia Awards ’14, ’13 &’12
– India Power Award 2014
– Power Business View Award 2014

Inc India Innovative 100 Award for ‘Innovation in

Product and Technology’

Best Performing Power Exchange – Power Line

Awards ’13 & ‘12