WHAT IS POWER TRADING ?
ANS.:Power trading is activity of buying and selling of power. At Power Exchanges,
which are approved by Central Electricity Regulatory Commission (CERC),
standardized Products are offered to buy and sell power.
WHY DO WE NEED A POWER EXCHANGE?
ANS.: Indian Power Sector required an independent market place operating at a
national level enabling the buyers and sellers to trade anonymously yet
providing a transparent level playing field to the participants allowing the
electricity market to be driven by the demand and supply, truly reflecting
the power price. In long run the Power Exchange would provide the price
signals for the whole electricity market operating in India.
HOW DOES POWER EXCHANGE HELP? WHAT IS THE ROLE OF POWER EXCHANGE?
ANS.: Being a nationwide, electronic Exchange it offers an
instrument to hedge price risk more efficiently at a reasonably priced cost.
The benefits of trading in a Power Exchange being:
Utilities: Utilities can adjust their portfolio as a function of demand or
generation profile and rebalance their portfolio in DAM and Intraday
markets. Utilities can also participate in the Weekly market of the Exchanges
and meet their demand on a weekly basis.
IPPs & CPPs: DAM is the only national Power Market where demand and
supply are aggregated on a national basis. It means that Price discovered on
the Exchange is a national Price and the quantum is cleared on national basis
rather than locally. It helps the IPPs and CPPs in getting a competitive price
for the quantum sold and also diminishes their capacity from being idle.
OA Consumers: Open Access consumers can derive the benefit of buying
electricity from a national level market through Power Exchanges which will
help them in reducing their cost of buying of electricity in comparison to the
tariffs levied by the respective utilities of their state.
WHO REGULATES POWER TRADING?
ANS.: The Exchange based power trading is being regulated by the Hon’ble Central Electricity Regulatory Commission (CERC).
WHO IS AN OPEN ACCESS CUSTOMER?
ANS.: Any consumer, trader, distribution licensee or a generating company of load
1 MW above and who has been granted open access under the Open Access
Regulations by the concerned state is an Open Access customer.
WHAT ARE THE PRE REQUISITES FOR TRADING AT EXCHANGE? Membership at Exchange
SLDC concurrence required for application to nodal RLDC
Settlement Accounts for Settlement of trade
Installation of Availability Based Tariff (ABT) Meter,
WHAT IS THE MINIMUM AND MAXIMUM VOLUME THAT CAN BE TRADED ON THE EXCHANGE ?
ANS.: On the Exchange Platform, one can trade a minimum volume of 1 MW and for minimum 1 hour. There is no upper limit as to the volume that can be traded, provided he does not cross his Contracted Demand. Above 1MW you can bid in addition of one decimal point.Eg. 1.1, 1.2, 1.3 etc.
MY FACILITY IS GRID CONNECTED AND ALREADY THERE IS A METER INSTALLED. WHY THE NEED TO CHANGE IT?
ANS.: The Meter that is present at your premises may be a Time of Day (TOD)
Meter, which only records consumption at hourly intervals. The Special
Energy Meter (ABT Meter) is programmed to record injection/drawl of
energy, demand, voltage and average frequency at 15 mins interval which is
one time block as per the Indian Electricity Grid Code.
HOW TRANSPARENT IS THE ENTIRE TRADING PROCESS?
ANS.:Market transparency is ensured by computerised trading system and
immediate dissemination of all relevant information related to any trades.
WHAT IS THE PROCESS OF POWER TRADING AT EXCHANGE?
ANS.: Following steps are followed at the exchange to ensure smooth trading
experience for the buyer or seller
Margining: For Day Ahead Market (DAMBuyer has to deposit margin
equal to the total bid he/she intends to put in the DAM and there is no
margin requirement for a seller in DAM
Bidding: A registered buyer/seller has to enter their Bids/Order into the
electronic platform provided by the Exchange. There are various kinds of
Orders available to the buyer/seller whom they can choose according to
their needs and preferences.
Price discovery: Exchange discovers Price through its Matching Engine based
on the various bids put by different buyers and sellers. The Matching Engine
and Matching Methodology used by the Exchange differ from Product to
Product. The Matching Methodologies of all Products is validated and
approved by CERC, so that the Price discovery happens in a fair, transparent and efficient manner.
Scheduling: Based on the Prices discovered for various time slots or various
Products, Exchange provides schedules that provides client-wise and time
slot-wise information related Price, Quantity and Region.
Settlement: After the scheduling is over, the Exchange initiates the
settlement process wherein the pay-in collected from various buyers need
to be transferred to the sellers. Also, any residual Margins left are
transferred back to the buyers whose bids were not successful.
Delivery: Seller starts injecting power into the required node of the grid on
the basis of cleared quantum and symmetrically the buyer’s starts drawing
power from the connected node.
HOW IS THE PRICE DETERMINED?
ANS.: A Uniform Price is determined through the matching of Aggregate Demand and Aggregate Supply for each time block of 15 min.
WHAT ARE THE TRANSACTION CHARGES LEVIED BY EXCHANGE?
ANS.: YCurrently Exchange charges 2 paise/kWh each from buyer and seller.
WHAT ARE THE OPERATING CHARGES IN DAY AHEAD MARKET AT SLDC AND NLDC LEVEL?
- SLDC Operating charges @ Rs.2000/- per day per Client.
- NLDC Application fees: 5000/- divided by no. of successful bidders.
- NLDC Operating charges @ Rs.5000/- per day per Entity involved. All
Buyers within a State shall be clubbed together into one group and all Sellers within a State shall be clubbed together into another group by the Power Exchange(s). NLDC shall count each Buyer group and each
Seller group for each of the Power Exchange(s) as separate Entities for Scheduling and levy of Operating Charges.
WHAT ARE TRANSMISSION CHARGES INVOLVED IN THE TRADING PROCESS ?
ANS.: a) Point of Connection charges (PoC charges) for injection/drawl
determined as per CERC Regulations
b) State transmission charges determined by respective SERCs in case
the Buyer/Seller is connected to the Intra-State grid
HOW ARE THE TRANSMISSION LOSSES CALCULATED ?
ANS.: The losses are mainly at State and regional level transmission. Inter-State
transmission losses would be applied separately on Buyers as well as Sellers.
Further, to compensate for the losses in the inter-State transmission system,
the Sellers shall have to inject extra power in addition to the contracted
power and in the same way the buyers shall draw less power than
The inter-State transmission loss would be as specified in the Order on PoC
loss and charge to be issued by CERC. The intra-State transmission loss for
Buyers/Sellers connected to the State grid would be as per the Orders issued
by respective SERCs.
HOW CAN I START POWER TRADING AT THE EARLIEST WITHOUT BECOMING A MEMBER ?
- Become Client
- Sign the Client Registration Form available with Member of the Exchange
- Get Registration Identification Code after payment of requisite fee, etc.
- Standing Clearance from State SLDC – Eligibility
- ABT Meters
- Sufficient transmission capacity
- Start Buying from Exchange or Sell surpluses to Exchange.
IN ORDER TO GET POWER FROM THE EXCHANGE , DO I HAVE TO INSTALL ADDITIONAL LINE ?
ANS.: No. There is no need to install separate line. You shall get your Power through the same
Grid, through which you are presently drawing power.
WHAT ARE THE PRELIMINARY REQUIREMENTS TO START TRADE ON THE EXCHANGE ?
ANS.: a) Grid Connectivity either at 11KV, 33KV, 66 KV, 132 KV, 220 KV or 400 KV level. Most of the states insist on a dedicated grid connectivity.
b) NOC from the concerned SLDC in the prescribed Format PX1 and
c) Installation of Special Energy Meter and other auxiliary equipments as directed by the SLDC , which records your drawl/injection in 15min intervals. The Availability Based Tariff Meter ( ABT Meter) is programmed to record flow of energy, demand and voltage.
DO I HAVE TO MAKE ANY TECHNICAL CHANGES IN ORDER TO PURCHASE POWER FROM THE EXCHANGE ?
ANS.: You will have to install Special Energy Meter ( ABT Meter) of 0.2s accuracy or as specified by the concerned SLDC and change the existing CT / PT to be compatible with it.
BUT I ALREADY HAVE A METER INSTALLED. WHY SHOULD I CHANGE IT ?
ANS.: The Meter that you have presently may be a TOD Meter, which records your consumption at hourly intervals, and it is 0.5 accuracy. The Special Energy Meter ( ABT Meter) is programmed to record injection/drawl of energy, demand, voltage and average frequency at 15 mins interval.
SUPPOSE THAT I HAVE PURCHASED POWER FROM THE EXCHANGE, BUT DUE TO ANY REASON, I AM NOT ABLE TO CONSUME THE SAME DURING THOSE HOURS, THEN IN THAT CASE WHAT HAPPENS ?
ANS.: When you purchase Power from the Exchange, you need to consume the same during those particular hours only. If by any reason, you are not able to consume Power during that period, the same is recorded by the ABT Meter and at the end of the month, when final readings are calculated, you should get the credit as per the UI Mechanism for Under Drawl, or as per the rules of your State. In some states in case of under drawl EB does not compensate and hence you lose the power.