IEX Products

Vishnu
 Introduction

Indian Energy Exchange is India’s premier energy

marketplace, providing a nationwide automated trading
platform for the physical delivery of electricity,
renewables, and certificates. More recently, IEX has
pioneered cross border electricity trade expanding its
power market beyond India in an endeavour to create an
integrated South Asian Power Market. IEX is powered by
state-of-the-art, intuitive and customer centric
technology, enabling efficient price discovery and
facilitating the ease of power procurement.
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Products

1. Day Ahead Market

2. Green Day Ahead Market
3. Cross Border Electricity Trade
4. Term Ahead Market
5. Real Time Market
6. Green Term Ahead Market
7. Renewable Energy Certificates
8.
SampleEnergy
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1. Day Ahead Market
• Day-Ahead-Market (DAM) is a physical electricity trading market for deliveries for any/some/all 15
minute time blocks in 24 hours of next day starting from midnight. The prices and quantum of
electricity to be traded are determined through a double sided closed auction bidding process.
Features
• Trading of 15 minute contracts.
• Double-sided anonymous auction bidding process.
• Clearance obtained from SLDC by buyers and sellers based on availability of network and ABT
meters.
• Congestion management through market splitting and determining Area Clearing Price (ACP)
specific to an area.
• Risk management through the requisite Margin, including any additional Margin as specified for
the respective trading segment or the type of contracts.

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Trading process flow

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Timeline

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2. Green Day Ahead Market
Commenced on 26 Oct’21 by Honourable RK Singh, Minister of Power and New
& Renewable Energy, GoI, the Green Day ahead Market allows anonymous &
double sided closed collective auction in renewable energy on the day-ahead.
The Exchange now invites bids for conventional and renewable in an integrated
way through separate bidding windows. The clearing takes place in a sequential
manner – first in the renewable segment having the must-run status,
considering the availability of the transmission corridor, followed by
conventional segment. IEX allows the market participants to transfer the
unselected bid in renewable segment and at a different price.

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Cont.

Key Features

• Bid categories for Buyers & Sellers – Solar, Non-Solar and Hydro
• Separate quantity limit for sellers in each category i.e. Solar, Non-Solar and Hydro
• Participants at either premium or discount price can use ‘Order Carry forward (OCF)’ at the
time of placing bid to carry forward uncleared bids to conventional DAM.
• Trading of 15- minute contracts
• Double-sided anonymous closed bidding auction
• Buyers and sellers submit NOC from respective SLDC based on availability of network
• Congestion management through market splitting and determination of ACP
• Separate price formation for green and conventional power.
• Risk management through the requisite margin, including any additional margin as
specified for the respective trading segment or the type of contract.

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Trading process

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Timeline

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3. Cross Border Electricity Trade
IEX Pioneered Cross Border Electricity Trade (CBET) with commencement of trade with Nepal in its
Day ahead electricity market on April 17, 2021. The Cross border in electricity is an endeavour to
expand the Indian power market towards building an integrated South Asian Power Market. To
begin with, the grid connected south Asian countries such as Nepal, Bhutan and Bangladesh will be
able to participate in Day ahead Market and Term ahead Market on the Exchange. Subsequently, as
the grid connectivity extends to other south countries, the market will expand further.
An integrated south as power market has many benefits including:
• Enhanced energy access and security
• Integrated Power Market
• Competitive power prices
• Transparent and efficient power procurement
• Resource optimisation

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4. Term Ahead Market
Term-Ahead-Market (TAM) provides a range of products allowing participants to
buy/sell electricity on a term basis for a duration of up to 11 days ahead.

The operations are carried out in accordance with the "Procedures for
Scheduling of Bilateral Transactions" issued by the Central Transmission Utility
(PGCIL), under "CERC (Open Access in inter-State Transmission) Regulations,
2008", as amended from time to time and the Bye-Laws, Rules and Business
Rules of the Exchange.

Currently, products in the Term Ahead Market include Intra-day, Day-ahead

contingency, Daily and Weekly contracts to help participants manage their
electricity portfolio for different durations.
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Cont.

Some common features

• Trading of region specific contracts
• Firm Delivery
The contracts under Term Ahead Market can be used to ensure delivery of
electricity for a few days in advance.
• Delivery Blocks: | RTC | Day | Night | Peak | Hourly |
FBA -- Firm Base – 24 Hrs.
FNT -- Firm Night –Hrs. (0-7 & 23-24)
FDY -- Firm Day – 181Hrs. (7-18)
FPK -- Firm Peak – 5 Hrs. (18-23)
• Risk Management by collection of margins as specified in the Bye-Laws, Rules
and Business Rules of the Exchange.
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Trading Process

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Trading Timeline

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5. Real Time Market
The Real-Time-Market (RTM) is a new market segment with trading commencing
on 1st of June’20. The market features a new auction session every half an hour
with power to be delivered after 4 time blocks or an hour after gate closure of
the auction. The price and quantum of electricity trading is determined through
a double-sided closed auction bidding process. The operations are carried out in
accordance with the Procedure for Scheduling Collective Transactions in the Real
Time Market as issued by Power System Operation Corporation Ltd; CERC Power
Market Regulations, 2010; CERC Open Access in inter-State Transmission
Regulations, 2008; CERC Indian Electricity Grid Code Regulations, 2010 as
amended from time to time and the Bye-Laws, Rules and Business Rules of the
Exchange.

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Cont.
Market Features
• Trading of 15 minute contracts
• Double-sided anonymous auction bidding process
• Buyers and sellers to obtain Clearance from SLDC by based on availability of
network and ABT meters
• Exchange to publish Area Clearing Price (ACP) and Area Clearing Volume
(ACV)
• Exchange to manage risk management leveraging bank balance, requisite
margin, including any additional margin as specified for the respective trading
segment or the type of contracts

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Trading Process

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6. Green Term Ahead Market
The Green-Term Ahead Market (G-TAM) is a new market segment for trading in
renewable energy following the CERC approval. The new market segment
features contracts such as Green-Intraday, Green-Day-ahead Contingency
(DAC), Green-Daily and Green-Weekly. The matching mechanism is
continuous/spot trading for Green-Intraday, Green-DAC and Green-Daily
contracts whereas double sided open auction process to be implemented for
Green-Weekly. The operations to be carried out in accordance with the
Procedure for Scheduling Bilateral Transactions through Power Exchange issued
by Power System Operation Corporation Ltd; CERC Power Market Regulations,
2010; CERC Open Access in inter-State Transmission Regulations, 2008; CERC
Indian Electricity Grid Code Regulations, 2010 as amended from time to time
and the Bye-Laws, Rules and Business Rules of the Exchange.
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Cont.
• Market Features
• A market mechanism to facilitate accomplishment of national renewable energy
capacity addition and effective integration of green energy in the country
• Trading of 15-minute time block in G-Intraday and G-DAC; whereas trading of
certain time of blocks in G-Daily and G-Weekly
• All contracts under G-TAM are at national level
• Continuous trading in G-Intraday, G-DAC and G-Daily; whereas double sided
open auction bidding process for G-Weekly
• Exchange to manage risk management leveraging bank balance, requisite
margin, including any additional margin as specified for the respective trading
segment or the type of contracts There will be several products available for
trading under G-TAM segment.

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Cont.

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Product Segment
Green Intraday Contracts
• National level 80 block wise (15 minutes) intra-day contracts for both Solar
and Non-Solar for delivery on the same day.
• The contracts are available for trading from 00:15 hrs to 19:30 hrs daily
through continuous trading process.

Green Day Ahead Contingency

• 96 contracts of 15 minutes each for both Solar and Non-Solar for delivery on
the next day
• The contracts are available for trading from 15:00 hrs to 23:30 hrs on daily
basis through continuous trading process

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Trading Process

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Trading Timeline

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7. Renewable energy certificates
Central Electricity Regulatory Commission introduced REC mechanism to ease
the purchase of renewable energy by the state utilities and obligated entities,
including the states which are not well endowed with RE sources. REC
framework seeks to create a national level market for renewable generators to
recover their cost. One REC (Renewable Energy Certificate) represents 1 MWh of
energy generated from renewable sources.

Under the REC mechanism, a generator can generate electricity through the
renewable resources in any part of the country. For the electricity part, the
generator receives the cost equivalent to that from any conventional source
while the environment attribute is sold through the exchanges at the market
determined price. The obligated entity from any part of the country can
purchase these RECs to meet its RPO compliance.
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Cont.
Participation Voluntary / RPO Compliance
REC Denomination 1 MWh
Validity 1095 Days after issuance
1. Solar REC
Categories
2. Non-Solar REC
Trading Platform Power Exchanges only
Banking Not Allowed
Borrowing Not Allowed
Single transfer only , repeated trade of
Transfer Type
the same certificate is not possible
Penalty for Non-compliance ‘Forbearance’ Price (Maximum Price)
Price Guarantee Through ‘Floor’ Price (Minimum Price)

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Selling REC’s
Eligible entities are those renewable generators who meet the following criteria-:

Type of renewable source is approved by MNRE and respective State Commission

• Do not have any Power Purchase Agreement (PPA) for the capacity related to such generation to sell electricity
at a preferential tariff determined by the appropriate commission
• Do not sell electricity generated from the plant, either directly or through trader, to an obligated entity for
compliance of the renewable purchase obligation by such entity. (As per the most recent amendment in the
regulation)
• Do not have agreement to sell electricity to local distribution company at a price not exceeding the pooled cost
of power purchase of that distribution company
• Sells electricity to the
• distribution licensee of the area at a price not exceeding the pooled cost of power purchase of such distribution
licensee, OR
• to any other licensee or to an open access consumer at a mutually agreed price, or through a power exchange at
market determined price. Sells electricity to any entity other than local distribution company at market driven prices or
otherwise

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Buying REC’s
The entities mandated to purchase a defined quantum of renewable energy of
their overall consumption are Obligated entities. Obligated entities may either
purchase renewable energy or can purchase RECs to meet their Renewable
Purchase Obligation (RPO) set under Renewable Purchase Obligation of their
respective States. Following entities are generally obligated in the State:

• Captive Consumers
• Open Access Users
• Distribution licensees

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Timeline

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Voluntary REC’s
• Corporates and individuals can buy Renewable Energy Certificates voluntarily.
Renewable Energy Certificates are the green attributes that allow companies,
organisations and individuals to offset their carbon footprints without investing
capital into generation capacities. Thus, purchasing RECs is one of the better
ways to "Go Green".
• RECs are issued to those generators who have generated electricity through
renewable sources like solar, wind, biomass, small hydro, municipal solid
waste etc. For the electricity part, the generator receives the cost equivalent
to that from any conventional source while the environment attribute is sold
through the exchanges at the market determined price.

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8. Energy Saving Certificates
One of the most important initiative under National Mission on Enhanced Energy Efficiency (NMEEE) is
Perform, Achieve & Trade (PAT) mechanism, launched by Bureau of Energy Efficiency (BEE) under
Ministry of Power on 4th July, 2012 at New Delhi.

PAT is a market-based mechanism to step up and incentivize energy efficiency in large energy-
intensive industries.

The scheme covers 478 Designated Consumers(DCs) from eight energy-intensive sectors—thermal
power, aluminium, cement, fertilizer, iron and steel, pulp and paper, textiles and chlor-alkali. These
eight sectors account for 25% of GDP and about 45% of India’s primary energy consumption and
consume 165 million tonne equivalent of energy consumption annually.

It facilitates the DCs to achieve their legal obligations under Energy Conservation Act, 2001, but also
provides them with necessary market-based incentives to over-achieve the targets set for them.

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Cont.
Compliance Mandatory
Target Entities Designated Consumers
Buyers Industries not achieving target
Sellers Industries achieving beyond target
Target 6.6 million toe for 1st Cycle
Mechanism Cap and Trade
Phase Cycle 3 Years
1 ESCert = 1 MTOE (Metric Tonne of Oil
ESCerts
Equivalent)
Trading Platform Power Exchange only
As per Energy Conservation Act, 2001(Link
Penalty
with market value of oil equivalent)
Banking Allowed for two consecutive cycles
Compliance Period 3 Years for DCs

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Procedure

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 Thank You
Vishnu Konanki
[email protected]

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