Training_Power_Exchanges_18-May-2011

advertisement
Power Exchange Operations
S.C. Saxena
National Load Despatch Center
Presentation Outline
• Review of Fundamentals
• Power Exchanges
– Concepts
– Implementation in India
• Regulatory Framework
• Procedures for Collective Transactions
• Congestion Management
– Market Splitting
– Sharing of Available Margins amongst the Power Exchanges
• Experience Gained in India
• Trading of Renewable Energy Certificates in the Power Exchanges
• Taking the Markets to the Next Level
– Proposal For Evening Market
– Sub-Hourly (15 – Minute) Market in Power Exchange
• Recent International Experience
2
Review of Fundamentals
3
Market
• A mechanism through which buyers and sellers
interact to determine prices and exchange goods and
services
• Entire set of conditions surrounding production,
transport and distribution of a product
• Size determined by geography, transport, costs, etc.
4
In a market everything has a price !!!
• Price
– is the value (not cost) of the good/service in terms of
money
– represents the terms on which voluntary exchange of
goods & services takes place
– Serves as signal to the producers and consumers
5
Demand
• Need + Purchasing power = Demand
• Law of downward–sloping demand
– When price of a commodity is raised, buyers tend to buy less
of the commodity, other things remaining constant (e.g.,
purchasing power, related goods, preferences, environment,
etc.)
Price
Quantity
6
Supply Curve
• The supply curve shows the relationship between its
price and the amount of that commodity that producers
are willing to produce and sell, other things held
constant (e.g., cost of production, technological
advancement, related goods, etc.)
Price
Quantity
7
Equilibrium
Quantity demanded is equal to quantity supplied !
Surplus
Shortage
Price of
commodity
Quantity
8
Shift in equilibrium
9
Price elasticity of demand
Change in Quantity Demanded in response to change in Price
Elastic
More Elastic
Perfectly Inelastic
Less elastic
Perfectly elastic
10
Power Exchanges: Concepts
11
Bilateral (OTC) Markets
• Common price through a co-operative approach
• Major Concerns –
– Price Discovery
– Price Discrimination
– Liquidity
– Transaction Costs
12
Power Exchanges - Definition
• An electricity Power Exchange provides a spot
market, mainly day-ahead, for electricity, which
like any other market matches demand and supply
for each time block, while providing a public price
index
13
Power Exchange – Characteristics (1)
• A Market Place
– Voluntary or Mandatory
– Anonymous auction platform
– Neutral
• Liquidity
– A competitive wholesale spot trading arrangement
• Energy Only Markets
– Do not account for any technical constraints or capacity
payments
• Bids
– Sale Bid – Quantum and Minimum price
– Buy Bid – Quantum and Maximum price
14
Power Exchange – Characteristics (2)
• Price Discovery
– Common price achieved through non co-operative
approach
– Price Discovery by matching of demand-supply
– Price signals
– Benchmark reference price
• Congestion Management
– Implicit Auction
– Market Splitting
15
Power Exchange – Characteristics (3)
• Standardized specifications
– Contract structure
• Robust Clearing & Settlement systems
– Counter party credit risk absorbed
• Risk Management
– Payment Security
– Standard margining system
Eliminates credit rating
• Fair, Safe, orderly market
– Rigorous financial standards and surveillance
procedures
16
Bilateral (OTC) Contract vs. Power Exchange
OTC contract
Exchange Traded
Available to limited market
participants
Liquid market – wider market
participation
Bilateral/ Customized Contracts
Standardized contracts
Counter party credit risk
Counter party risk assumed by
exchange
Is an involved participant
Platform is Neutral
Opaque dealing
Transparent price discovery
mechanism
Bilateral dispute settlement
mechanism
Well defined dispute settlement
mechanism
Difficulty in reporting and regulating
various trades
The exchange is the central
reporting and regulating entity
17
Interplay: PX – Bilateral Markets (OTC)
• Rivals
– Competition between two types of markets
• Complementary
– Competition limited to day-ahead
– Preference to OTC in longer time frame
• Inter-dependent
– Prices on the PX & OTC must be very close else
arbitrage occurs
– Hedging
18
The PX Clearing House
•
•
•
•
Subordinate to the PX
Intermediary for transactions
Tracks all transactions
Primary role
– Guarantee financial reliability to the participants
• Participants required to maintain margin accounts
• Effectively hedges against credit risk
19
Advantages PX
• Promotes trade and competition
• Reliable price discovery
– Reference for bilateral contracts
• PX recognizes value of the commodity (electricity)
– Does not guarantee lower prices
• Optimal utilization of sparse resources
– Generation
– Transmission
• Credit risks covered by the PX
• Congestion Management
• Facilitates trading of short term arising on account of
uncertainty in demand forecasting
20
Auction Models
PRICE
PRICE
Demand
Supply
Supply
Estimated
Demand
MCP
MCP
MCV
VOLUME
One Side Auction
MCP = Market Clearing Price
MCV
VOLUME
Two Side Auction
MCV = Market Clearing Volume
21
Social Welfare Maximization
PRICE
Accepted Purchase Bids (>= MCP)
Purchase
(Consumers’ Discount)
Sale
MCP
Accepted Sale Bids (<= MCP)
(Generators’ Surplus)
MCV
22
Price Calculation Algorithm -Day ahead– Hourly Bids
PRICE-paise/kWh
0
100
200
230
250
270
300
400
500
600
700
PARTY A-ZONE-1
600
600
600
400
400
400
400
200
150
100
100
PARTY B-ZONE-1
600
600
400
400
300
200
0
0
-50
-100
-200
PARTY C-ZONE-2
0
-100
-100
-100
-200
-300
-400
-500
-500
-500
-500
PARTY D-ZONE-2
0
0
-200
-300
-300
-300
-400
-500
-500
-500
-600
1200
1200
1000
800
700
600
400
200
150
100
100
0
-100
-300
-400
-500
-600
-800
-1000
-1050
-1100
-1300
1200
1100
700
400
200
0
-400
-800
-900
-1000
-1200
SUM, PURCHASE
SUM, SALES
NET TRANSACTION
800
AGGREGATED
PURCHASE BIDS
paise/kWh
700
600
AGGREGATED
SALE BIDS
500
400
300
200
100
0
0
200
400
600
800
1000
1200
1400
MWh/hr
Market Clearing Price (MCP) : 270 p
Market Clearing Volume (MCV): 600MW
23
Types of Bids
• Single bids
– Price – Quantity pairs, one for each hour
• Block Bids
– A Block bid is all or none type of a bid i.e. bid will get
accepted by the system only if price and volume
condition is getting satisfied.
– Can cause unpredictable movements of prices and
volumes
System Operator Training
24
Power Exchange Implementation in
India
25
The Milestones
• July 2006
– Staff Paper by CERC
• February 2007
– CERC Guidelines for establishment of Power Exchange
• August 2007
– In principle approval to the first power exchange in the country
• January 2008
– Revised Regulations for Open Access in Inter-state Transmission,
Effective 1st April 2008
• June 2008
– Procedure for Scheduling of Collective Transactions by CTU
– Commencement of operations
• October 2008
– Second Exchange begins operations
26
Power Exchange in India – Salient Features
• Multiple Power Exchanges
– Competition amongst Exchanges
•
•
•
•
•
•
Voluntary participation
Double sided bidding
Uniform pricing
Day-ahead exchange
Hourly bids
Congestion management by market splitting
27
Regulatory Framework
System Operator Training
28
Regulator’s Approach
• CERC Guidelines for setting up of a Power Exchange:
“The general approach of the Commission is to
allow operational freedom to the PX within an overall
framework. The regulation would be minimal and
restricted to requirements essential for preventing
derailment/accidents and collusion. Private
entrepreneurship would be allowed to play its role. The
Commission shall keep away from governance of PX,
which would be required to add value and provide
quality service to the customers”
NLDC
29
CERC Power Market Regulations, 2010 (1)
• Scope & Extent
– OTC Markets
– Power Exchange Market
– Other Power Exchange Markets
Derivatives
• Types of Contracts
– Delivery based OTC Contracts
– Financially settled electricity derivatives contracts
transacted in OTC market
– Delivery based contracts transacted on Exchange
– REC Contracts
– Capacity, Ancillary, Derivative based contracts (future)
System Operator Training
30
CERC Power Market Regulations, 2010 (2)
• Prior to grant of permission to Power Exchange, CERC
may examine
– Type of contract (day ahead, term ahead etc);
– Price Discovery methodology and matching rules
proposed;
– Transaction period – When transaction shall commence
and for what tenure transaction session shall continue
before delivery commences;
– Risk Management mechanism
Margining mechanism
Final Price Settlement mechanism
– Delivery mechanism, delivery duration
System Operator Training
31
CERC Power Market Regulations, 2010 (3)
Objectives of the Power Exchange (Regulation 10)
• Ensure fair, neutral, efficient and robust price
discovery
• Provide extensive and quick price dissemination
• Design standardised contracts and work towards
increasing liquidity in such contracts
– Explanation: Liquidity is a measure of ease of entering
or exiting into a transaction (generally large
transaction) with minimal impact in the market price
of the transacted contract.
System Operator Training
32
CERC Power Market Regulations, 2010 (4)
Principles of Price Discovery (Regulation 11)
• The economic principle of social welfare
maximisation and to create buyer and seller surplus
simultaneously during price discovery.
• The bidding mechanism shall be double sided closed
bid auction on a day ahead basis.
• The price discovered for the unconstrained market
shall be a uniform market clearing price for all buyers
and sellers who are cleared
• In case of congestion in transmission corridor, market
splitting mechanism shall be adopted.
• The delivery / drawl of power shall be considered at
the regional periphery.
System Operator Training
33
CERC Power Market Regulations, 2010 (5)
• Other Provisions
– Prudential Norms
– Governance Issues
– Ownership Patterns
– Registration – Fees
– Membership
– Clearing House
– Interface with System Operator
System Operator Training
34
Open Access Regulations, 2008
• Earlier Regulations notified in February 2004
(amended in 2005) stand repealed
• Covers Short Term Open Access Transactions only
• Categories of Transactions
– Bilateral
– Collective Transactions discovered on a Power
Exchange
• Nodal Agency
– Bilateral: RLDCs
– Collective: NLDC
Open Access Regulations, 2008:
Provisions For Collective Transactions
• Transmission Charges
– Shift from “Contract Path” to “Point of Connection”
– Both buyers and sellers to pay
– IR Links – no separate treatment
• Transmission Losses
– Applicable on both buyers and sellers
• Disbursement of Transmission Charges
– 25% retained by CTU
– 75% to be credited to long-term customers
Open Access Regulations, 2008:
Provisions For Collective Transactions
• Thrust on Empowerment of SLDCs
• SLDC Concurrence [Clause 8(2)]
– NOC/Standing Clearance to be obtained by State
Utilities/Intra-State Entities from the SLDC for trading
through PX
– SLDC to respond within 3 days
– SLDCs may charge appropriate fee for such
NOC/Standing Clearance (as per SERC or Rs. 5000 if
not notified by SERC)
Procedures for Scheduling of Collective
Transactions
System Operator Training
38
Eligibility Conditions
• Entities scheduled by RLDCs
– Deemed Regional Entity
Entities whose metering and energy accounting done by RLDCs
• Entities scheduled by SLDCs
– SLDCs to assess TTC/ATC for their State system
– Prior Consent from respective SLDCs
– Standing Clearance / NOC
• New Entities
– To Satisfy conditions as laid down in IEGC
– Obtain Prior Approval from RLDCs/SLDCs as per jurisdiction
NLDC
39
Commercial Conditions (1)
• Charges for Collective Transactions payable to
SLDCs
– Transmission Charges: As per SERC, if notified or else
Rs. 80/MWh
– Operating Charges: Rs. 2,000 per day for each point of
transaction
– Each point of injection and drawl to be counted
separately by SLDCs
– PX to settle SLDC charges directly with respective SLDC
Commercial Conditions (2)
• Charges for Collective Transactions payable to NLDC
• Application Fee
– @ Rs. 5,000/-, payable by PX to NLDC at the time of application
• Transmission Charges
– Applicable for each point of injection and drawl
– Charges for use of ISTS @ Rs. 100 per MWh
• Operating Charges
– @ Rs. 5,000/- per day per group involved
– Buyers and Sellers in a State to be clubbed into separate groups
– Each group to be counted as a single entity by NLDC
• Payment by PX to NLDC
– Transmission and Operating Charges: By next working day
– Preferred Mode: Electronic Fund Transfer
Treatment Of Losses
• Average transmission losses of the respective region
to be applied, both on Buyers and Sellers
– Sellers to inject extra power (MW) in addition to
contracted power (Contracted Power + Losses)
– Buyers to draw less power (MW) than contracted power
(Contracted Power – Losses)
• Applicable losses to be declared in advance
• Intra-State losses to be taken care of by the
respective SLDCs
• Additional losses for wheeling, if necessary
– To be notified in advance by NLDC
– Applicable only for Injection
NLDC
42
Real Time Congestion Management
• Curtailment
– By RLDCs at the periphery of Regional Entities
SLDCs to further incorporate this curtailment for State
Utilities/Intra-State Entities
• Settlement
– Transmission Charges: Pro-rata refund by NLDC to PX
– Operating Charges: Not to be revised
– Direct settlement between PX and its participants
Information Exchange
Acceptance by NLDC
Request for Scheduling
Constraints, if any
Information
exchanged over leased
line between NLDC
and PX
Provisional Solution
Power Exchange
Trades
Over WAN
Schedules
NLDC
Over Internet
(RLDC Website)
Schedules
RLDCs
SLDCs
Final Trade Results for State Utilities & Intra State
Entities to be sent by PX directly to SLDCs
Congestion Management
NLDC
45
Demarcation into Bid Areas
Area
Region
States
N1
North
JK, HP, CHD,
PUN, HAR
N2
North
RAJ,DEL, UP,
UTT
W1
West
MP, CHTG
W2
West
MAH,GUJ, GOA,
DD,DNH
S1
South
AP, KAR, GOA
S2
South
TN, KER, PONDY
E1
East
WB, SIK, BIH,
JHAR
E2
East
ORISSA
A1
NorthEast
TRIP, MEGH,
MANI, MIZO
A2
NorthEast
AS, AP, NAGA
NLDC
46
SKEWED LOAD GENERATION BALANCE
NR
Scenarios:
1. 4D
2. 3D + 1S
3. 2D + 2S
WR
ER+N
ER
SR
4. 1D + 3S (Congestion)
5. 4S
Congestion Management - Market Splitting
Zone – A
Case – I : No Transmission Constraint
Zone – B
Load=100
MW
Case – II : Constraint = 40 MW
Solution:
Gen=120
MW
• Increase price in Zone A to reduce demand to 40 MW
• Decrease price in Zone B to reduce supply to 40 MW
300
PR IC E
ZONE - B (GEN)
ZONE - A (LOAD)
300
250
250
200
200
150
150
MCP=125
100
100
50
50
0
0
0
20
40
MW
60
80
100
-140
-120
-100
-80
MW
-60
-40
-20
0
Cost of Congestion: 2000
NLDC
48
Transmission Congestion Management: Methods
• Pricing Based
– Explicit Auction
– Implicit Auction
– Market Splitting
• Remedial
– Counter Trade
– Re-dispatching
NLDC
49
Congestion Management in Multi Exchange
Scenario (1)
• ISSUE
– Sharing of available margins
• Possible Methods
– Priority Based Rules
– Explicit Auction
– Merging of Bids
• Priority Based Rules
Lowest MCP
Highest MCV
Highest MCP X MCV
Maximization of Social Welfare, consumer surplus, etc.
May not lead to an overall economy
NLDC
50
Congestion Management in Multi Exchanges
Scenario (2)
• Explicit Auctioning amongst Exchanges
– Inter-dependencies in the Indian scenario
– Difficult to implement
• Merging of bids obtained by each Power Exchange
– Equivalent to system operator interfacing with only one
Exchange
– Confidentiality issues
• Pro – rata rationing of available margins
–
–
–
–
Simple to implement
Sub-optimal method
Possibility of over-estimation of capacity
Further complications
Arising out of inter-dependencies in the Indian scenario
NLDC
51
Implementation in India
• Worldwide, one Power Exchange dealing with
physical delivery in one market
• Pro-rata sharing of available margins
– Applied on cleared trade volumes on each area and
each corridor
– Interim arrangement
– Debate on for a more optimal method
NLDC
52
Discovery of Multiple Prices & Interplay
• Prices discovered in Power Exchange
– Reflection of anticipated UI price for the next day
• Multiple Prices
– Collective Transactions:
Two prices – one for each exchange
– Two Grids – two UI Prices
– In case of congestion, market split
Area prices
Multiple exchanges
NLDC
53
Case Study
• No congestion till onset of severe winter
• Occasional congestion after 12th Dec 08
– Foggy conditions in Talcher area
• Case of 12th Dec 2008
–
–
–
–
–
–
–
Period of Congestion: 0500 – 0600 Hrs
Congested Corridor: Total import to SR
TTC to SR reduced from 4000 MW to 3600 MW
Total provisional requisition: 1430 MW
Total trades cleared: 1091 MW
Market split into NEW Grid and SR Grid
MCP [IEX website]:
 NEW Grid: Rs. 4.80 per kWh
 SR Grid: Rs. 6.00 per kWh
– Cost of Transmission discovered
 Rs. 1.20 per kWh
NLDC
54
Experience Gained
NLDC
55
Monthly Energy Traded through Power Exchanges
Data Up to April 2011
Daily Energy Traded through Power Exchanges
Data Up to April 2011
Correlation: Prices & Shortage/ Surplus
Data: June-08 to Apr-11; IEX
59
Distribution of Prices in Power Exchange (IEX)
System Operator Training
60
Distribution of Shortage / Surplus (IEX)
System Operator Training
61
CASE OF MCV INCREASE AFTER CONGESTION
• Day ahead Market
saw increase in
Cleared Volume after
congestion is
declared in particular
time blocks due to:
– Block –bids
– New Sell/Buy bid
getting cleared in
Final iteration
NLDC
SOURCE:IEX Website
62
Segments in the Short Term Market
NLDC
63
Volumes in the Short Term Electricity Market
Source: MMC, CERC
Renewable Energy Certificates (REC)
NLDC
65
Dealing in Renewable Energy Certificates (1)
Provisions in the CERC REC Regulations, 2010
Regulation 8.1
• “Unless otherwise specifically permitted by the Commission by order, the
Certificates shall be dealt only through the Power Exchange and not in any other
manner.”
Regulation 8.2
• “The Certificate issued to eligible entity by the Central Agency may be placed
for dealing in any of the Power Exchanges as the Certificate holder may consider
appropriate, and such Certificate shall be available for dealing in accordance
with the rules and byelaws of such Power Exchange.
• Provided that the Power Exchanges shall obtain prior approval of the
Commission on the rules and byelaws including the mechanism for discovery of
price of the Certificates in the Power Exchange.”
•
NLDC
66
Dealing in Renewable Energy Certificates (2)
• Statement 3.7.2 of the SOR on “Dealing in the Certificates”
states that
“The Commission has noted the observations and would like to
reiterate that provision in the Regulation that REC shall be dealt
only in the Power Exchange is adequate and also legally
sustainable. The nature of operation of Power Exchange (which
essentially is a platform where buyers and sellers buy and sell at
the price discovered by matching aggregate demand and supply)
is conducive to the development of the new and emerging
concept of REC. The Commission is well within its jurisdiction
under Section 66 of the Act to provide for the specific manner in
which this new concept should be evolved. In any case this
mechanism does not debar the traders from facilitating
transactions in REC as Members of the Power Exchanges. The final
regulations provide that the bye-laws of power exchange to be
approved by the Commission should include price discovery
mechanism.
NLDC
67
Pricing of Renewable Energy Certificates (1)
• Provisions in the CERC REC Regulations, 2010: Regulation 9.1
“ The price of Certificate shall be as discovered in the Power
Exchange. Provided that the Commission may, in consultation with
the Central Agency and Forum of Regulators from time to time
provide for the floor price and forbearance price separately for solar
and non-solar Certificates.
CERC determined Floor price and Forbearance price for dealing in Certificates,
which shall remain valid up to FY 2012.
Non Solar REC
(Rs/MWh)
Solar REC
(Rs/MWh)
Forbearance Price
3,900
17,000
Floor Price
1,50068
12,000
NLDC
68
Pricing of Renewable Energy Certificates (2)
• Statement 3.8.2 of the SOR on “Pricing of Certificates” states
that
“ The Commission has noted the observations. As regards the
need for forbearance price, the Commission would like to
emphasize that forbearance price is necessary to avoid price
volatility which may defeat the very purpose of facilitating the RPO
compliance by utilities through REC mechanism. The Commission
has, however, acceded to the suggestion of providing for minimum
price for REC along with forbearance price, to ensure the
threshold level of revenue certainty. This is considered necessary
to instill confidence in the investors towards REC mechanism. The
Commission has also agreed to the suggestion of providing for
broad guiding principles which the Commission would bear in mind
while determining the forbearance price.Suitable modifications
have accordingly been made in the draft regulations.”
NLDC
69
Trade & Redemption (1)
• Price Discovery in Power Exchanges
– Double sided auction
– Closed auction to start with, provision of continuous trade
– Uniform price, with provision for pay-as-bid in future
• Market lot = 1 REC
• Trading Sessions
– Monthly for the first year, frequency may be increased
depending on liquidity
– Non-Solar and Solar RECs
– Last Wednesday of every month
– Timing: 1 PM to 3 PM
NLDC
70
Trade & Redemption (2)
• Provisional Results
– By 3:30 PM from both PX to NLDC
– Max bid volumes, seller wise, to be sent to NLDC for
checking
• Post Trade Check
– Sellers to limit total sell in both the PXs to the total RECs
held by the concerned RE Generator such that the total
cleared volume is less than total RECs held
• Checking by NLDC
– For total quantum of bids in both the PXs taken together
– NLDC to revert back by 4 PM.
NLDC
71
Trade & Redemption (3)
• Default by Sellers
– In case of default by any Seller(s) in terms of volume, bids
of the defaulter(s) to be rejected in both the PXs and
auction to be run by both PXs excluding the defaulter(s)
bids.
– Defaulter can bid in the subsequent auction next month
onwards. In case of three defaults in a year, report to CERC.
• Final Results
– By 5 PM from PX to CA
• Checking and Extinguish
– By the Central Agency by 6 PM
NLDC
72
Schematic Description of Procedure for Redemption
Central
Agency
Verification
Conditions
(By 15:30)
Eligible
Entity
Offer for Sale
13:00 to 15:00 hrs
1a
Confirmation
Of REC validity &
quantity
(by 16:00)
2
Bid for Purchase
13:00 to 15:00
Power
Exchange(s)
Intimation of Trade results
For Extinguishing REC
(By 17:00)
1b
Obligated
Entity / Buyer
Market Clearance
(Volume & Price)
3
Central
Agency
NLDC
4
Reports
73
Snapshot: REC Inventory (www.recregistryindia.in)
NLDC
74
Information Dissemination
• Central Agency Website: www.recregistryindia.in
– List of Registered REC Holders
– Total quantum valid RECs as on date, trend for the past
• Trade Results
– MCP and MCV on Power Exchange Websites
www.iexindia.com
www.powerexindia.com
• List of REC Buyers, obligated entities:
– PX to give monthly report to CERC/CA
• List of seller defaulters:
– PX Website / CA Website
NLDC
75
Moving to the Next Level:
Some Issues under Discussion
NLDC
76
Market Snapshot: 27th June 2010 (source: IEX)
Missed Opportunity
Unmatched Volume
4/13/2015
Due to Congestion
POSOCO
78
Potential Volume for Evening Market
4/13/2015
POSOCO
79
Corridor Utilization
Congestion
Observed
Seasonally
Only towards
NR, SR and
S1 – S2
IEX Website
4/13/2015
POSOCO
Only a couple of
corridors
congested
out of
a dozen
80
Prevailing Scenario
• Shortages
– Round the clock and in all regions
• In many hours
– Sale bids >> Purchase bids
• Volume lost due to price mismatch is substantial
• Congestion
–
–
–
–
During some hours
Only couple of corridors facing mild congestion
Margins available on other corridors
Market split by very low price difference !!
• Need for an Evening Market in the Power Exchanges
4/13/2015
POSOCO
81
Advantages of the Proposed Evening Market
• Consumers
– More choice and satisfaction
• Sellers
– Another opportunity
• Further optimization of the portfolio
• Take a more informed position in the market
• Better utilization of uncongested and under-utilized
corridors
• More economy and efficiency
• Social welfare maximization
• Change in strategy and an overall improvement
• Likely that more volume is cleared
• Movement to the next level
4/13/2015
POSOCO
82
Fluctuations in Wind Generation
MW
Tamil Nadu
Aug 2010
DATE
TIME
Sharp Price Movements (Aug ‘10)
PRICE
DAYS
HOUR
4/13/2015
POSOCO
84
15 – Minute bidding in PX (1)
• USP of the Indian Market Structure
– 15 Minute Scheduling
– 15 Minute Metering
– 15 Minute Accounting
• Ramping Rate
– Hour boundary: high ramp rate (1000 MW)
 Large Changes in HVDC set points (NEW – SR) in operation
– 15 minute bidding
 facilitate gradual ramping up and down
 provide operational ease to the participants
• Better portfolio management
• Better management of imbalances
– Deviations from the schedule
NLDC
85
15 – Minute bidding in PX (2)
• Encourage participation by the Renewable Energy
Sources
–
Australian Market has adopted 5 minute interval for facilitation of
renewable energy sources
• Prices discovered in PX and UI Prices
–
–
–
Hourly prices on the Power Exchanges
UI Prices are on a 15 minute interval
Introduction of 15 minute bidding would make the two comparable
• Both the Morning and the Evening Markets
should have 15 – minute bidding interval
NLDC
86
International Experience
NLDC
87
CIGRE 2010:
Study Committee C5 on Electricity Markets
• Preferential Subject 1:
– Challenges of national or state regulations of transmission
and system operators in regional markets, L. A. Dale
– 8 Papers
• Preferential Subject 2:
– Impact of intermittent Resources or Demand Response on
Market Designs; Andrew L. Ott
– 10 Papers
• Preferential Subject 3:
– Interactions of environmental incentives and markets (e.g.
carbon) with electricity markets, Charles F. Zimmermann
– 4 Papers
C5-101: Experience of India’s first power
exchange and challenges ahead
• Outline of Electricity trading in India
• Features of Power Exchange
– Members and clients
– Delivery and interface with system operator
– Block bids
• Operational experience
– Participation level
– Price trend and volatility
• Issues and challenges
– Propensity to over draw rather than schedule power
– Last priority to power exchanges in transmission capacity
allocation
– Price cap on day-ahead transaction
C5-102: Harmonization of cross border transmission
capacity allocation within the Central West Europe region
• Presentation of CWE Region (Belgium, France,
Netherlands, Luxembourg and Germany)
– harmonisation of the rules for allocating the transmission
capacity within CWE
• The establishment of the Joint Auction Office (JAO)
• The scope of activities of the Joint auction office
–
–
–
–
allocating the daily capacity on the German borders
Operating the explicit daily auctions on Belgium borders
Coupling fallback
Collecting and sharing the congestion revenue for the TSOs
• Harmonisation and improvement of the auction rules
• Brief of CWE Market Coupling project
Attempt to Harmonize in Europe (C5-102)
•
•
•
•
•
•
•
•
•
•
•
•
•
definitions,
products to be auctioned,
participation requirements,
financial guarantees,
firmness of both allocated capacities and nominated programs,
definition of force majeure,
bids format,
time schedule of the auctions,
compensation/reimbursement in case of reduction,
payment modalities,
secondary market principles (”use it or sell it”),
responsibility of parties,
the suspension/termination of contract conditions.
C5-106 : Czech and Slovak spot electricity market
coupling on the basis of implicit capacity allocation
• Daily transactions between the two market areas take place
exclusively in the form of implicit auctions.
• The implicit auction office is a virtual area in the information
system of one of the market operators; it ensures that sell bids
and buy bids in the two market areas are matched.
• The virtual office is a part of both information systems, and the
two market operators will alternate in performing the function
of the virtual office.
• Implicit auctions are based on the principle of price coupling;
• In the event of capacity constraints at the interconnection point
the market splits, and two prices are created.
• In the event of transactions constrained due to congestion and
market split, the price difference generates an implicit auction
price that generates revenues allocated between the two
transmission system operators.
C5-107: Multiple power exchanges in India – a case
study
• Study of the experience gained from the operation of multiple
power exchanges in a single physical delivery market in India
• Salient features of PX implementation in India
• Allocation of available transfer margins,
• Congestion management
• Interplay between the bilateral market, day-ahead market in
Power Exchanges and the real time market.
• Issues
–
–
–
–
–
–
–
Multiplicity of price signals
Regulatory overlap – forward price signals
Regulatory uncertainty – price caps
Transmission pricing & losses
Balancing market guiding vector
Available margins for the PXs
Impact of block bids
Thank You for your attention !!
[email protected]
NLDC
94
Download
Related flashcards

Financial markets

19 cards

Currencies of Africa

22 cards

Currencies of Europe

37 cards

Currencies of Asia

20 cards

Securities (finance)

36 cards

Create Flashcards