1. Power Exchange Operations S.C. Saxena National Load Despatch Center

2. 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

3. Review of Fundamentals 3

4. 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

5. 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

6. 6 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.) Quantity Price

7. 7 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.) Quantity Price

8. 8 Equilibrium Quantity demanded is equal to quantity supplied ! Quantity Price of commodity Surplus Shortage

9. 9 Shift in equilibrium

10. 10 Price elasticity of demand Elastic More Elastic Less elastic Perfectly Inelastic Perfectly elastic Change in Quantity Demanded in response to change in Price

11. Power Exchanges: Concepts 11

12. Bilateral (OTC) Markets Common price through a co-operative approach Major Concerns – – Price Discovery – Price Discrimination – Liquidity – Transaction Costs 12

13. 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

14. 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

15. 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

16. 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

17. Bilateral (OTC) Contract vs. Power Exchange OTC contractExchange Traded Available to limited market participants Liquid market – wider market participation Bilateral/ Customized ContractsStandardized contracts Counter party credit riskCounter party risk assumed by exchange Is an involved participantPlatform is Neutral Opaque dealingTransparent 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

18. 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

19. 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

20. 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

21. 21 Auction Models MCP MCV MCP PRICE VOLUME One Side AuctionTwo Side Auction Supply Demand Estimated Demand MCP = Market Clearing PriceMCV = Market Clearing Volume

22. Social Welfare Maximization 22 MCV MCP PRICE Sale Purchase Accepted Purchase Bids (>= MCP) (Consumers’ Discount) Accepted Sale Bids (<= MCP) (Generators’ Surplus)

23. Price Calculation Algorithm -Day ahead– Hourly Bids PRICE-paise/kWh0100200230250270300400500600700 PARTY A-ZONE-1600 400 200150100 PARTY B-ZONE-1600 400 30020000-50-100-200 PARTY C-ZONE-20-100 -200-300-400-500 PARTY D-ZONE-200-200-300 -400-500 -600 SUM, PURCHASE1200 1000800700600400200150100 SUM, SALES0-100-300-400-500-600-800-1000-1050-1100-1300 NET TRANSACTION120011007004002000-400-800-900-1000-1200 23 Market Clearing Price (MCP) : 270 p Market Clearing Volume (MCV): 600MW AGGREGATED SALE BIDS AGGREGATED PURCHASE BIDS

24. 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

25. Power Exchange Implementation in India 25

26. 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

27. 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

28. Regulatory Framework System Operator Training 28

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. 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) Open Access Regulations, 2008: Provisions For Collective Transactions

38. Procedures for Scheduling of Collective Transactions System Operator Training 38

39. 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

40. 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

41. 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

42. 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

43. 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

44. N L D C Power Exchange RLDCs Constraints, if any Information exchanged over leased line between NLDC and PX Trades Schedules SLDCs Over WAN Over Internet (RLDC Website) Acceptance by NLDC Final Trade Results for State Utilities & Intra State Entities to be sent by PX directly to SLDCs Information Exchange Provisional Solution Request for Scheduling

45. Congestion Management NLDC 45

46. Demarcation into Bid Areas AreaRegionStates N1NorthJK, HP, CHD, PUN, HAR N2NorthRAJ,DEL, UP, UTT W1WestMP, CHTG W2WestMAH,GUJ, GOA, DD,DNH S1SouthAP, KAR, GOA S2SouthTN, KER, PONDY E1EastWB, SIK, BIH, JHAR E2EastORISSA A1North- East TRIP, MEGH, MANI, MIZO A2North- East AS, AP, NAGA NLDC 46

47. SR ER+N ER WR NR Scenarios: 1.4D 2.3D + 1S 3.2D + 2S 4.1D + 3S (Congestion) 5.4S SKEWED LOAD GENERATION BALANCE

48. NLDC 48 Congestion Management - Market Splitting Cost of Congestion: 2000 Zone – A Load=100 MW Zone – B Gen=120 MW Case – I : No Transmission Constraint MCP=125 Case – II : Constraint = 40 MW Solution: Increase price in Zone A to reduce demand to 40 MW Decrease price in Zone B to reduce supply to 40 MW

49. Transmission Congestion Management: Methods Pricing Based – Explicit Auction – Implicit Auction – Market Splitting Remedial – Counter Trade – Re-dispatching NLDC 49

50. 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

51. 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

52. 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

53. 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

54. 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

55. Experience Gained NLDC 55

56. Monthly Energy Traded through Power Exchanges Data Up to April 2011

57. Daily Energy Traded through Power Exchanges Data Up to April 2011

59. Correlation: Prices & Shortage/ Surplus 59 Data: June-08 to Apr-11; IEX

60. Distribution of Prices in Power Exchange (IEX) System Operator Training 60

61. Distribution of Shortage / Surplus (IEX) System Operator Training 61

62. 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 62 SOURCE:IEX Website

63. Segments in the Short Term Market NLDC 63

64. Source: MMC, CERC Volumes in the Short Term Electricity Market

65. Renewable Energy Certificates (REC) NLDC 65

66. 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

67. 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

68. 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. NLDC 68 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 Price3,90017,000 Floor Price1,50012,000

69. 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

70. 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

71. 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

72. 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

73. NLDC 73 Schematic Description of Procedure for Redemption Obligated Entity / Buyer Obligated Entity / Buyer Eligible Entity Eligible Entity Power Exchange(s) Power Exchange(s) Offer for Sale 13:00 to 15:00 hrs 1a Bid for Purchase 13:00 to 15:00 1b Central Agency Central Agency Verification Conditions (By 15:30) Verification Conditions (By 15:30) 2 2 Confirmation Of REC validity & quantity (by 16:00) Confirmation Of REC validity & quantity (by 16:00) Central Agency Central Agency Intimation of Trade results For Extinguishing REC (By 17:00) 3 Market Clearance (Volume & Price) Reports 4

74. Snapshot: REC Inventory (www.recregistryindia.in)www.recregistryindia.in NLDC 74

75. Information Dissemination Central Agency Website: www.recregistryindia.inwww.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.iexindia.com  www.powerexindia.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

76. Moving to the Next Level: Some Issues under Discussion NLDC 76

77. Market Snapshot: 27th June 2010 (source: IEX)

78. 9/6/2015POSOCO78 Missed Opportunity Unmatched Volume Due to Congestion

79. 9/6/2015POSOCO79 Potential Volume for Evening Market

80. 9/6/2015POSOCO80 Corridor Utilization IEX Website Congestion Observed Seasonally Congestion Observed Seasonally Only towards NR, SR and S1 – S2 Only towards NR, SR and S1 – S2 Only a couple of corridors congested out of a dozen Only a couple of corridors congested out of a dozen

81. 9/6/2015POSOCO81 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

82. 9/6/2015POSOCO82 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

83. Fluctuations in Wind Generation TIME MW DATE Tamil Nadu Aug 2010

84. Sharp Price Movements (Aug ‘10) 9/6/2015POSOCO84 DAYS HOUR PRICE

85. NLDC85 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

86. NLDC86 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

87. International Experience NLDC 87

88. 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

89. 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

90. 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

91. 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.

92. 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.

93. 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

94. NLDC 94 Thank You for your attention !! saxena.samir@gmail.com