Electricity market

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An Exchange is a platform on which buyers and sellers come together to transact. It is not the market but a host to the market. Its core function is to ensure fair and transparent transactions as well as efficient dissemination of price information to its stakeholders.

Presently, the exchange offers products to enable transactions in electricity in the following two segments: It is also assisting in accelerating deployment of power trading exchange meaning energy by enabling power trading exchange meaning in Renewable Energy Certificates REC.

Only the Exchange Members, who have been admitted as such by IEX, are eligible to enter into Contracts, and undertake transactions relating to such Contracts. Persons, who are not Exchange Members, can participate as Clients through a registered Exchange Member.

For more details, please visit: Even if you are not a Member, you can transact through a Member, i. Members, however, can trade and clear directly on their behalf as well as on behalf of power trading exchange meaning Clients.

Entities falling under the category of Interstate generating stations, distributing licensees, electricity traders, brokers and State-embedded entities like IPPs, CPPs, Open access consumers are power trading exchange meaning to become Members. For more details, click on: Members need not be connected to transmission system. A Member can transact on behalf of his Clients connected to the grid. To enhance two way flow of information and bring in transparency between the exchange and the users, IEX is pursuing various initiatives i.

There are relevant icons on the homepage of our website www. Apart from power trading exchange meaning payment security, exchange is also the counter-party for all transactions. Thus, the participants need not know and be concerned about the risk-profile of the other party.

The exchange collects requisite margins listed below before trading and the delivery to ensure payment security In the day-ahead market a Member or the Client is allowed to transact only when the margin deposited by the Member or the Client is at least or equivalent to the average value of transactions done by it for last seven 7 days; or the initial margins prescribed by the Exchange power trading exchange meaning any Member or the Client.

In the Term Ahead Market the Member or Client will have to make available the following types of margins to the Exchange from time to time as described below:. Please check Rules and Byelaws and circulars of the exchange the relevant margins and collaterals available for meeting such margin requirements. After receiving confirmation about availability of RECs in the depository account of Eligible Entity from the nodal agency NLDCthe exchange proceeds to process the final bid matching solution.

The bids of the Sellers for whom the balance in the depository account with the central agency is reported short, is not considered. For more details refer to the business rules of the company, available at: In case if the Member wishes to give non cash collateral towards margins, then he will have to submit it at least three day before in case of FD one day before from the start of trading day. Non cash collateral can be in the form of: Clearing Banks have been power trading exchange meaning to facilitate electronic transfer of funds between Clearing Members or the Clients, as applicable, and the Exchange.

The list of the Clearing Banks along with their details is available on our website at the following link: The prices and quantum of electricity to be transacted is determined through a double-sided closed auction bidding process. Following are the main features of DAM:. For more details, go to: All purchase bids and sale offers are aggregated in the unconstrained scenario.

The aggregate supply and demand curves are drawn on Price-Quantity axes. Results from the process are preliminary results. Based on these results the provisional obligation and provisional power trading exchange meaning flow is calculated.

In case sufficient funds are not available in the settlement account of the Member then his bid s is deleted from further evaluation procedure. These Area Clearing Prices are used for settlement of the contracts. For more information, please visit: Grid bottlenecks are relieved by comparison of the calculated contractual flow with the transmission capacity available for spot trading, and if the flow exceeds the capacity, the prices are adjusted on both sides of the bottleneck so that the flow equals the capacity.

If the flow exceeds the capacity at the common price for the whole market area, it power trading exchange meaning split in a surplus part and a deficit part and Area Clearing Price ACP is determined for each part. This will reduce the sale and increase the purchase in the surplus area. In the same way, it will reduce the purchase and increase the sale in the deficit area.

Thus, the needed flow is reduced to match the available transfer capability. This method of managing congestion is power trading exchange meaning known as market-splitting. Initially, the electrical regions are power trading exchange meaning as bid areas since inter-regional links are most likely to be congested, however, each electrical region of power trading exchange meaning country has been divided further into two or more bid-areas so as to accommodate any exigencies of congestion in intra-regional transmission system.

As on date, there are 12 pre-defined bid areas in the country. Term-ahead market TAM includes products allowing participants to transact for delivery of electricity for duration up to 1 week. It enables participants to purchase electricity for same day through intra-day contracts, for next day through day-ahead contingency, on daily basis for rolling seven days and on weekly basis to manage their electricity portfolios for different durations in a better way.

TAM segment is operated on all days except the specified holidays. The Exchange declares trading calendar indicating trading sessions and trading power trading exchange meaning for each of Contracts on quarterly basis. It may extend, advance or reduce trading hours by notifying the Members as and when it deems fit and necessary. For viewing the trading calendar, please visit: For matching of contracts, different auction methodologies are employed.

The two key matching methodologies adopted in general are explained below:. Renewable Energy Certificate REC represents the green attributes of electricity generated from renewable energy source. These attributes are unbundled from the physical electricity and the two products—the attributes embodied in the certificates and the commodity electricity—are sold or purchased separately.

These green attributes can be separately traded at power trading exchange meaning exchanges. The procedure approved and notified by the regulator broadly involves four parts: The revised prices are as follows:. REC trading is done through a closed double-sided auction between For complete trade cycle visit: Toggle navigation Navigation power trading exchange meaning. India's most preferred energy trading platform.

Enabling Open Access Consumers cost effective and reliable power. What is a Power Exchange? A Power Exchange is a platform on which power is transacted i.

Is there any Statutory authority to regulate Power trading exchange meaning What are the products offered? What are the technical requirements? The technical requirements to start trading are as below: Does one need to be a Member to transact?

Who is eligible to become a Member? Does a Member need to be connected to any transmission system? Can anyone become a Client?

What are the eligible categories? The following two categories of Client of the Members can be registered: A Client who is eligible to buy or sell electricity and is connected to the grid. The entities such as trading licensees can become Trader Clients. How can I get trade related information? In the Term Ahead Market the Member or Client will have to make available the following types of margins to the Exchange from time to time as described below: Initial Margin Operational Limit: Initial Margins are computed on the total order value.

This initial margin is blocked automatically from the total available deposits. The trading system will automatically reject orders in power trading exchange meaning the initial margin exceeds the balance deposits available.

Additional Margin is computed as a power trading exchange meaning of the traded value as per the risk curve defined and are collected in different trenches as per the contract specifications. The Exchange on a pre decided day also computes the Variation Margin of Members based on their trades open position. The Exchange may collect power trading exchange meaning ad hoc margins from time to time in case if it feels that the available margins collected by the exchange are inadequate due to variation in the prices in the Market.

What are the collaterals power trading exchange meaning against the margin requirement? What is the function of Clearing Banks? Following are the main features of DAM: Cleared Power trading exchange meaning Total Contract Value: Cleared Volume multiplied by ACP Final settlement adjusted for any force majeure deviations Delivery Point Periphery of Regional Transmission System in which the grid-connected entity, is located For more details, go to: What are the Order Characteristics?

Following are the features of the orders placed through DAM: Rs 1 per MWh 0. Partial execution of the bids entered is possible. Relational Block Bid for any min block or series of min blocks during the same day can be entered. Although no partial execution is possible i. How is the market clearing price determined?

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After the enactment of Electricity Act in , the concept of Open Access and Power trading were created. Since generation and consumption of Power is not evenly distributed in India, the concept of Power trading enables surplus generation from one Region to flow to another Region which is deficit in Power or within the same Region. Power trading fundamentally means that a transaction where the price of power is negotiable and options exists about whom to trade with and for what quantum.

Traditionally, trading licensee has been viewed as seller of electricity who fulfills the needs of the distribution companies discoms by arranging electricity supply at the discoms desired delivery point.

Importantly, trading licensee act as risk absorbers between generators and discoms ensuring that generators are paid on time by bringing in their finances in case there is a delay in payment by a buyer.

It absorbs both liquidity risks as well as credit risk of the discoms and insulates the generator from the financial condition of a discom. Trading also facilitates competition among generators by offering various options for buying electricity to discoms. In India, power trading is in an evolving stage and the volumes of exchange are not huge.

In other words, the suppliers of electricity have little choice about whom to sell the power and the buyers have no choice about whom to purchase their power from. Power generation, transmissions are highly capital intensive and the Fixed Charge component makes up a major part of tariff. India being a predominantly rural economy, power demand is seasonal, weather sensitive and there exists substantial difference in demand of power during different hours of the day with variations during peak hours and off peak hours.

Further, the geographical spread of India is very large and different parts of the country face different types of climate and different types of loads. Power demand during the rainy seasons is low in the States of Karnataka and Andhra Pradesh and high in Delhi and Punjab. Whereas many of the States face high demand during evening peak hours, cities like Mumbai face high demand during office hours.

The Eastern Region has a significant surplus round the clock, and even normally power deficit states with very low agricultural loads like Delhi have surpluses at night. This situation indicates enough opportunities for trading of power. This would improve utilization of existing capacities and reduce the average cost of power to power utilities and consumers. In view of high fixed charges, average tariff becomes sensitive to PLF. Trading of power from surplus State Utilities to deficit ones, through marginal investment in removing grid constraints, could help in deferring or reducing investment for additional generation capacity, in increasing PLF and reducing average cost of energy.

Over and above this, the Scheduled exchange of power will increase and un-scheduled exchange will reduce bringing in grid discipline, a familiar problem. Are you a member of Power Sector..! The article you are trying to view is accessible to registered users of Power Sector community. If you are a registered user, please login using your account details, or create new account to become a registered user.

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