Short-Term Power Market in India

Dr Naran M. Pindoriya
Assistant Professor
Department of Electrical Engineering
IIT Gandhinagar
 Short-Term Transactions

 “short-term transactions of electricity” refers to

contracts of less than one year period, for electricity
transacted through following segments:
– trading licensees (inter-state part only) under bilateral
transactions or “bilateral trader” segment ,
– PXs segment with transactions in both, DAM and TAM,
– UI segment and
– direct between DISCOMs segment

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Electricity Market Operation

Contract
markets DA market

time
Bilateral Daily auction
Balancing
agreements/ (PXs)
mechanism (UI)
LTOA/STOA

Day (d-1) Operating day (d)

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 PXs in India

 Indian Energy Exchange (IEX)

– Started on: 27 June, 2008
– Products: DAM, TAM, and REC

 Power Exchange India Ltd. (PXIL)

– Started on: 22 October, 2008
– Products: DAM, TAM, and REC

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IEX

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PXIL

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Short-Term Transactions … Cont’d

Volume of Electricity Transacted through Trading Licensees and PXs

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Short-Term Transactions … Cont’d
Volume of Electricity Transacted Directly between DISCOMs

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UI Transactions: Trend

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 Competitive Power Market: STOA
 Indian power industry – encouraging short-term markets

Volume of short-term transactions Share of Different Segments in Total

of electricity (2009-2011) in BU Electricity Generation in 2010-11

Huge untapped potential for Power Trading in India

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Competitive Power Market: STOA
 Price of Electricity transacted through short-term trade

Price (Rs./kWh)
8 7.29 7.49 2008-09
6.7 2009-10
7
2010-11
6 5.26
4.96
4.79 4.62
5
3.91
4 3.47

0
Bilateral Trading PX's Transactions UI Transactions

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RES Potential in India

Source : MNRE, India

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 Power from Renewable Energy
 MNRE -facilitate the growth of both grid and off-grid renewable
energy power through specific programs
 Total estimated potential of renewables in India for power
generation : approximately 85,000 MW with the major
contribution of around 75% coming from wind energy
 Present status: 20,162 MW of power is being generated through
RES (31-10-2011) -- around 75% coming from wind energy
 Addition of 6,000 MW wind power installation in India by 2012.
 Jawaharlal Nehru National Solar Mission (JNNSM) under the
National Action Plan on Climate Change (NAPCC) target of
installation of:
– 1-1.5 GW by 2012 and
– 20 GW by 2020 from nearly zero on-grid installation currently
The growth of renewable energy : major share by the private sector

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Electricity Generation from RES

Source: CEA (2009). 14

 Renewable Energy Certificate

 Provision in EA 2003 to promote generation of electricity

from RE sources

 National Action Plan on Climate Change

 Renewable Purchase Obligations from SERCs

 CERC notification dated January 14,2010

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 Renewable Energy Certificate
 Market based instrument
– Provides evidence that a generator has produced a certain
quantum of power from a RE resource which has been
consumed
– Effects the environmental attributes of the source of
generation
 Distribution of RE resources is not uniform across the
country
 Increased flexibility for participants to carry out RE
transactions
 Crate competition among different RE technologies
 REC transaction to happen through power exchanges

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Renewable Energy Certificate

Cost of electricity
through RE generation

Cost equivalent to Cost for “GREEN”

conventional resources Attributes

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 Renewable Energy Certificate

RE generators
Unbundling of REC from electrical energy

REC Option Feed-in-Tariff

Electricity Green attributes

Sale of electricity to
REC (Solar and obligated entities at
non-solar) preferential tariff
Electricity Sale of electricity
sale at to obligated
market entities at price ≤ Sale of REC at
price average price
PXs
DISCOMS

Open access CPPs

consumers

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Operational Framework for REC

Source: MNRE
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 REC Categories and Prices

CERC order dated on 1st June 2010

Non-solar REC Solar REC

(Rs/MWh) (Rs/MWh)
Cap price 3900 17000
Floor price 1500 12000

CERC order dated on 23rd August 2011

Non-solar REC Solar REC

(Rs/MWh) (Rs/MWh)
Cap price 3300 13400
Floor price 1500 9300

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REC Trading- Recent Market Product

REC Trading through PXs

120000

100000 IEX PXIL

Total volume traded (REC)

80000

60000

40000

20000

0
Mar Apr May June July Aug Sep Oct Nov

REC mechanism is expected to overcome geographical

constraints and provide flexibility to achieve RPO compliance.

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Thanks for you kind attention !!!

… Any questions ???

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