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Open Access and Pricing of Power 17 th July’14. Rohit Bajaj V.P. (Business Development). In this presentation. Indian Power Market: Present Status. Long Term. Power Purchase Agreements. 89%. Upto 25 Years. OTC Licensed traders (61). Medium Term. 6%. 3 months- 3years.

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open access and pricing of power 17 th july 14

Open Access and Pricing of Power17th July’14

Rohit Bajaj

V.P. (Business Development)

indian power market present status
Indian Power Market: Present Status

Long Term

Power Purchase Agreements

89%

Upto 25 Years

OTC

Licensed traders (61)

Medium Term

6%

3 months- 3years

OTC Intraday- 3 months

Short-Term

Exchanges

Intraday - 3 months

1. Intra-day

2. DAM

3. DAC

4. Daily

5. Weekly

3%

Balancing Market

Unscheduled Interchange

2%

Real Time

growth trend of short term power markets
Growth Trend of Short Term Power Markets

Source: Monthly MMC Reports

company snapshot
Company Snapshot

95% Market Share ~80,000MWhaverage dailytrade

3000+ Participants 2100+ Industries

Transparency

Liquidity

Competition

iex market segments delivery based contracts
IEX Market SegmentsDelivery-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 the same day starting 2 pm

Daily-for rolling seven days (delivery starting after 4 days)

Weekly-for 1 week (Monday-Sunday)

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

features of day ahead market
Features of Day Ahead Market

N1

N3

A2

N2

N2

A1

E1

W1

W3

W2

E2

S1

S2

12 Bid Areas

dam trading process
DAM Trading Process

10:00 am to 12:00 pm

12:00 pm to 1:00 pm

1:00 pm to 2:00 pm

3:00 pm

5:30 pm

6:00 pm

  • Bids for 15- min each or block bids can be placed

MCP &MCV calculated

Corridor availability and funds verified

Final ACV and ACP calculated. Market splitting if congestion

Collective transaction confirmation by NLDC

Final Schedule sent to RLDC for incorporation

prices in the day ahead market at iex
Prices in the Day-Ahead Market at IEX
  • Diverse participation led to high liquidity and most competitive prices
  • Prices smoothened gradually depicting the true market scenario
  • DAM prices emerged as the benchmark price for a short term trading
open access what a consumer pays losses
Open Access: What a consumer paysLosses
  • An open access consumer has to bear in kind the following losses as defined by the relevant regulations
case gujarat landed cost for open access consumer
Case : GujaratLanded Cost for Open Access Consumer

*Assumption: Buy Quantity is 10 MW for 24 hours and 1000 Portfolios are selected everyday

**IEX W2 Avg Price FY 13-14

case gujarat cost benefit analysis retail vs open access
Case : GujaratCost Benefit Analysis- Retail vs. Open Access

Industrial Consumer

(Connected Load: 66kV)

Retail Consumer

Open Access Consumer

Retail Tariff:

INR 5.75/unit

Landed Cost:

INR 3.76/unit

Cost Effective Measure for Power Supply is Open Access, offering savings of INR 1.99/unit

open access charges losses and charges in select states at 33 kv level
Open Access Charges Losses and Charges in select States at 33 kV level

* Additional Surcharge in case of Haryana is Rs 0.50/unit

landed cost to consumer accessing dam at iex 33 kv 1 mw rtc
Landed Cost to Consumer Accessing DAM at IEX (33 kV, 1 MW, RTC)
  • Assumptions:
  • Consumer connected at 33kV level
  • Consumer load = 1 MW
  • Average Price at which procured from IEX = Rs 2.5/kWh for all
  • Calculating landed cost after adding POC, STU & Wheeling Charges & losses, NLDC operating & application charges, SLDC charges, IEX transaction charges
average area prices in dam at iex apr 13 mar 14
Average Area Prices in DAM at IEX(Apr’13-Mar’14)

Area DAM Prices (RTC)

N1

N3

A2

N2

N2

A1

E1

W1

W3

W2

E2

S1

S2

12 Bid Areas

cost saving for industries procuring power through iex
Cost saving for Industries Procuring Power through IEX

Case study of some industrial units shows the monthly cost saving as a result of procuring power from IEX instead of resorting to costly power from DG sets or Discom

states allowing open access
States allowing open access
  • Haryana: High CSS and additional surcharge of 50 p/unit
  • Punjab: High CSS and high wheeling charges (same for all voltage)
  • Gujarat Charges applicable on the reserved quantum (OA requested) & additional surcharge of 42p/unit
  • Rajasthan- No issue
  • Tamil Nadu: OA not allowed to Sellers, Sec-11 invoked
slide30

Restrictive Open Access

  • High Open Access charges:
    • Chhattisgarh, Orissa, Assam – High CSS
    • Meghalaya: OA charges for full day on highest quantum in a time block,
  • Approvals and additional requirements:
    • Maharashtra: Power through Exchange permissible only on week ahead basis or higher and not on Day-Ahead basis.
    • Himachal : Requires exact schedule a day in advance for purchase through Discom
    • MP: Approval from Discom
    • Karnataka: Imposed Sec 11 briefly. Consumers OA is possible.
  • Infrastructure Constraints:
    • Tripura, Mizoram, Manipur, Nagaland, J&K
states not allowing open access
States not allowing open access
  • SLDC Hindrance
    • Uttar Pradesh, Bihar, Jharkhand - Approvals not given
  • Absence of adequate regulatory framework
    • Sikkim: Regulatory inadequacy
  • Open Access made unviable through high charges
    • West Bengal: High CSS and flat tariff
    • Jharkhand: High CSS
    • Delhi: Either Discom or OA
general issues and resolution
General Issues and resolution
  • Financial Settlement
    • Delay in Energy Credits (Haryana )
    • UI Settlement –
    • No credits for under drawals
  • NoC for longer periods (3-6m)
  • Same NoC applicable for intra-day transactions
    • Procedures to be issued by NLDC
open access registry framework proposal for implementation
Open Access Registry FrameworkProposal for implementation

Stakeholders

Financial Institutions (in future)

OA Applicants

  • This will bring in transparency and facilitate faster transactions using automatic rule-based open access clearance while removing manual discretions
  • Integrated IT based system
  • All OA approvals automated
  • Function as an interacting medium between the OA Participants, Trade Intermediaries/PXs and National/Regional and State LDCs.
  • Record of Information will be available to CERC, System Operators, OA Customers, Traders and PXs

OAR

LDCs

Regulators

  • Store information of all OA granted
  • Info on inter-state corridor available for STOA as uploaded by NLDC/RLDC
  • Info on availed STOA corridor
proposed amendment in the electricity act 2003 separation of carriage content
Proposed amendment in the Electricity Act, 2003Separation of Carriage & Content
  • Broad Principles
    • Distribution and Supply shall be recognized as separate licensed activity
    • Distribution Licensee: To be responsible for development, operation and maintenance of distribution network business and shall have an obligation to provide connection on demand to any consumer in its area of distribution
    • Supply Licensee: Clear unbundling from existing distribution licensee
      • Responsible for arranging supply of electricity to all consumers in the area of supply. The areas of supply for the incumbent supply licensee to be the same as area of distribution for the distribution licensee
    • Competition among suppliers for eligible customers (1MW+)
  • We need to deal with India-specific issues
    • Cross subsidy elimination Roadmap
    • T&D Loss Treatment (Supplier Vs Distributor)
    • Exempt small utilities from Unbundling