Power bourses asked to show supply-demand curve on websites…

 

To ensure more transparency, sectoral watchdog CERC has asked power exchanges to display on their websites aggregate demand and supply curve of electricity trading for day-ahead market.

The move, according to the Central Electricity Regulatory Commission (CERC), would help market players in making informed decisions.

Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL) are the two electricity bourses in the country, with the former having more than 90 per cent market share.

"The proposal for display of aggregate demand and supply curve would be a positive step towards development of power markets.

"This would significantly contribute towards information dissemination, bring transparency in the markets and help market participants to take informed price decisions," CERC has said.

The directions would be applicable for day-ahead electricity trading market, starting from April 1 this year.

In the day-ahead market, participants transact electricity on 15-minutes block basis, a day before its delivery.

"The curves shall be available on the website for a period of one year from the date of publication. This shall be implemented for the results of day ahead auction held on 1.4.2014," the order said.

The watchdog, in its order on January 8, has asked the bourses to display on their respective websites the national level aggregate demand and supply curves -- price and quantity -- after completion of auction and final price discovery.

Noting that curves should be displayed for each 15 minute time block of the day, the regulator said exchanges should not display information about any individual participant.

As per the regulator, the demand and supply curve should be displayed at the same time when the final prices results for day ahead market are published on the website.

"This information shall be over and above the cleared prices of different bid areas presently being displayed for the day ahead markets," it added.

The power exchanges have also been asked to closely monitor the market and monitor the bidding behavior of participants to check whether any market abuse is happening.

In September last year, CERC had sought comments on a discussion paper titled 'Improvement of market efficiency by information dissemination through display of aggregate demand and supply day ahead curves by power exchanges on their website'.

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Himachal cabinet approves sale of power to Tata Power Trading Company Limited…

 

The Himachal Pradesh cabinet on Thursday approved the selection of Power Trading Corporation of India Limited and Tata Power Trading Company Limited (TPCL) for a year for the sale of government's entitlement of power from various hydroelectric projects.

In a meeting chaired by chief minister Virbhadra Singh, the cabinet decided that the trading margin might be increased if better rates for power sale were received.

The cabinet also gave its nod to the establishment of a government engineering college at Nagrota Bagwan in Kangra district. This college will have 40 seats each in mechanical engineering, electronics and communication engineering and electrical engineering.

Giving the impetus to health care, the cabinet also approved primary health centres (PHC) at Sheelghat, Shimla, and Patta-Baravery in Solan district, and a health sub-centre at Dattowal village in Solan district.

The government also sanctioned industrial training institutes (ITI) for Gagret, Balh, Manali and Patta Mehlog with two trades from the next academic session along with creation of posts. A veterinary dispensary at Navi, Shimla district, also got the cabinet's nod along with filling up of a post of veterinary pharmacist and a post of animal husbandry assistant.

The state cabinet also accorded approval to the establishment of Poorna Shakti Kendra (PSK) project in Solan district.

Besides, the government also approved filling up of 100 vacant posts of ayurvedic medical officers in the ayurveda department on contract basis, and filling up of 50 posts of clerks on contract basis by direct recruitment through Himachal Pradesh Subordinate Service Selection Board, Hamirpur, against the vacant posts of senior assistants in relaxation of recruitment and promotion rules and keeping equivalent number of posts in senior assistants in abeyance.

The cabinet's nod was also given to eight posts of lecturers in IGMC Government Dental College, Shimla, by direct recruitment through Himachal Pradesh Public Service Commission (HPPSC). State government also accorded approval to fill up the post of director, sainik welfare department, on regular basis through the HPPSC, besides filling up of 8 vacant posts of deputy directors (Class 1) in the sainik welfare department through direct recruitment on contract basis. The approval was accorded to the draft notification of Himachal Pradesh Raj (Appointment and Conditions of Service of Panchayat Sahayaks in Zila Parishads) Rules, 2014.

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Power prices touched Rs 3.22 per unit on IEX in December...

 

The average price of electricity sold on the Indian Energy Exchange rose to Rs 3.22 per unit in December even as volumes remained mostly flat in the same month.

The day-ahead market saw trading of 2,409 million units of electricity last month almost similar to that witnessed in November 2013, according to IEX.

In December, the total purchase bids stood at 3,800 million units while the sale bids touched 3,812 million units.

"The average (market clearing) price for the month of December remained at Rs 3.22 per unit, reflecting an increase of 16 per cent over the price last month," IEX said in a statement today.

In November, the price stood at Rs 2.78 per unit of electricity.

"Transmission congestion, especially in the Southern corridor remained severe across the month adversely impacting the quantum of power traded in the short-term power market via exchanges," the statement said.

Last month, on an average 1,091 participants traded in the day ahead spot market.

IEX is a leading power exchange in the country.

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Power trading set to get a boost as India gets a national grid...

 

In what may give a big boost to power trading business in the country, India has finally connected the southern region with rest of the country for unhindered electricity flow, achieving the goal of a national grid after a long wait.

“The central transmission utility, Power Grid, has successfully commissioned the Raichur-Solapur 765-KV single-circuit transmission line on Tuesday evening, interconnecting the southern grid synchronously with the rest of the national power grid –- a move that would facilitate bulk transfer of power across regional boundaries. With this, the mission of ‘One Nation – One Grid – One Frequency’ has been successfully accomplished,” the power ministry said on Wednesday.

The national grid will help southern states, especially Andhra Pradesh, Tamil Nadu and Kerala, which are facing huge shortages, lift surplus power from other regions. In the absence of a national grid, these states were paying exorbitantly high prices for buying electricity from the open market because of uncertainty about power evacuation due to congestion in the transmission network.

The Indian power system is operating through five regional grids and a Pan-India synchronous grid was envisaged for optimal utilisation of the generation resources in the country. Till now, four regional grids -- northern, eastern, western and north-eastern -- were connected synchronously and the southern region was connected to the other four grids via HVDC links.

“The 208-circuit-km-long transmission line and 765- and 400-KV substations at Raichur and Sholapur have been commissioned five months ahead of the contracted schedule. The project has been completed at the cost of Rs 815 crore, Power Grid said.

"Synchronous integration of the southern grid with the rest will not only augment the inter-regional power transfer capacity of the southern region, but also relieve congestion seen in a few transmission corridors. This will be a boost for growth of the country," Power Grid added.

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CERC likely to take a call on Indian Energy Exchange founded by FTIL...

 

After strictures passed by Forward Markets Commission (FMC) against Jignesh Shah as well as FTIL, power sector watchdog CERC is likely to soon take a call on the IEX.

FMC, the regulator for commodities market, has ruled that Shah and his flagship firm FTIL are not "fit and proper" to run any exchange amid the continuing NSEL payment crisis.

The National Spot Exchange Ltd (NSEL), promoted by FTIL, is embroiled in a Rs 5,500 crore payment turmoil and is under the scanner of multiple agencies.

FTIL was the founder and promoter of Indian Energy Exchange (IEX), the country's premier power bourse.

Shah was instrumental in setting up the country's first power exchange IEX -- continues to remain as its non-executive director.

On Wednesday, the Forward Markets Commission said that Shah and FTIL are not "fit and proper" to run any exchange in the country besides charging him of being the "highest beneficiary" in the NSEL scam.

FTIL currently has 26 percent stake in MCX, country's largest commodity exchange and will need to cut its stake following the FMC order.

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Analysis of Trading activities by Licensed Traders for November 2013...

 

CERC has released the analysis of power trading activities performed by the licensed traders for the month of November 2013.

 

The abstract of the report is presented below:

 

 

Summary

• The reported short-term contract volume for November 2013 (analysis of four weeks) is 1585 MUs whereas the same was 2262 MUs for the month of October 2013 (analysis of five weeks). This is equivalent to about 12% decrease in average weekly volume transacted during October.
• 91% of total volume has been contracted at price of more than `4/kWh during November as compared to 85% of total volume contracted during October.
• Total number of contracts (including swap & banking) executed during November is 127 by 6 traders whereas in October the number of contracts executed was 273 by 9 traders.

Comparison of Short Term OTC contracts prices with Power Exchange prices (on Contracted Date)

The maximum number of contracts are executed in the fourth week of the period and the overall price of OTC contracts executed was in the range of Rs. 2.23/kWh - Rs. 6.97/kWh whereas the prices on the Exchanges varied between Rs. 1.61/kWh - Rs. 3.49/kWh. (Pl refer the embedded report)

Forward Curve of Power Prices
A forward curve reflects present day’s expectation of spot prices for a future period. Accordingly forward curves have been drawn based on prices of contracts executed for supply of power for future period. Forward curve have been drawn for December 2013 – May 2014 based on 120 contracts.

The Forward Curve for November 2013 is based on 120 reported contracts for the period up to 1st December 2013 and the tenure of the curve is for the period 8th December 2013 to 31st May 2014(period of power delivery). The forward prices for December 2013 & January 2014 are based on 30 & 25 contracts respectively whereas the forward prices for April & May 2014 are based on only 5-7 contracts. Thus, the liquidity is high in terms of number of contracts in the nearer months in comparison to farther months and therefore the price indicators are better for nearer months. (Pl refer the embedded report)

Post-facto Comparison of Prices in OTC Contracts and in Power Exchanges (on Power Delivery Dates)
The post facto graph shows the average OTC price vis-à-vis power exchanges prices for the last month’s power deliveries. Hence this compares the spot Power Exchange prices with OTC deliveries (OTC contracts may have been executed earlier but delivered on the same days as on the exchange spot deliveries). The methodology of calculating the data points of OTC prices is same as in the forward curve. (Pl refer the embedded report)

List of traders who have undertaken contracts in October 2013

Trader	4th Nov - 10th Nov	11th Nov - 17th Nov	18th Nov - 24th Nov	25th Nov - 1st Dec	Grand Total
PTC India Ltd	Y(26)	Y(20)	Y(21)	Y(29)	Y(96)
NTPC Vidyut Vyapar Nigam Limited	NIL	NIL	Y(4)	Y(16)	Y(20)
Tata Power Trading Co. Ltd	NIL	NR	Y(4)	NIL	Y(4)
JSW Power Trading Co. Ltd	NIL	NIL	Y(3)	NR	Y(3)
Mittal Processors Pvt. Ltd	NR	NR	NR	Y(3)	Y(3)
Instinct Infra & Power Ltd	NR	NIL	NIL	Y(1)	Y(1)
Grand Total	Y(26)	Y(20)	Y(32)	Y(49)	Y(127)

Note 1: Y ( ): Contracts had been undertaken (Number of Contracts), NIL: No Contracts was made during the week, NR: Not Reported
*Note 2: This table shows list of traders who have reported & undertaken at least one contract during the reported period. There could be some traders who have reported but did not undertake any contracts.

Complete report is embedded below.

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Nepal imports additional 300 MW power from India...

 

Nepal has begun buying an additional 30 MW of power from India in a bid to ease the chronic power shortage in the country during winter, officials said Monday.

Nepal faces up to 16 hours of load-shedding during the season.

"Since Sunday, we have added an additional 30 MW power from India, purchased from the Power Trading Corporation of India," said Bhuwan Kumar Chetteri, manager of the system operation department of the Nepal Electricity Authority (NEA).

The authority is the sole entity for generating and distributing power in the country.

The Power Trading Corporation of India has sold the power to Nepal at a rate of Rs.3.75 (NRs.6) per unit. The additional power import takes Nepal's total import from India to 165 MW.

Nepal has been requesting India to provide at least 250 MW to meet its increasing power deficit.

"We are in a process to import additional power from various cross border points at this juncture as many cross border lines are being maintained from both sides," Chetteri told IANS.

Nepal has also been importing power from Indian states of Bihar, Uttar Pradesh and Uttarakhand, he said.

Several up gradation and revamp projects are underway to import power from other Indian states as well, he added.

The NEA is aiming to bring down load-shedding to 12 hours this winter by getting more power from India.

Currently, there is a shortfall of 350 MW to meet the requirements as existing capacity is just around 700 MW.

Measures are being taken to reduce power demand, including operating some multi-fuel plants and revamping existing power plants.

Officials said Nepal pays around Rs.22 billion every year for procuring power from India, which includes importing inverters and diesel generators.

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Discoms resume payments to power traders on debt recast...

 

Equipped with stronger cash flows after restructuring of their short-term debt by lenders, discoms, especially those from states like Uttar Pradesh and Tamil Nadu, have managed to pay R3,500 crore of their outstanding dues to power traders like PTC India, Lanco Infratech and NTPC Vidyut Vyapar Nigam. Payments have resumed in the second quarter of this fiscal and more dues are to be cleared in the current quarter, sources said.

However, the discoms are yet to step up electricity purchases from the open market to meet their power shortfalls.

Four states—Rajasthan, Haryana, UP and Tamil Nadu, which accounted for more than 60% of R1.9 lakh crore debt of the state power sector estimated as at the end of March last year — have completed restructuring their discom loans, inspiring confidence in banks and financial institutions to resume lending to them.

Besides, these states have also hiked electricity tariffs by 20-37% since 2012 to access the benefit of financial restructuring plan (FRP) offered by the Centre, which has led to a sizeable increase in their discoms’ revenues. Significantly, the FRP stipulates timely revision of tariff by discoms to meet their expenditure-revenue gap in a time-bound manner.

Kameswara Rao, leader, energy utilities and mining, PWC said: “Judging from discoms' payment pattern, it appears that their cash flow position has materially improved.”

Salil Garg, an analyst with India Ratings, a credit rating agency, concurred. “Implementation of FRP by some states has not only improved their discoms' cash flows but has also proved positive for utilities' operations as they are required to revise tariffs on a regular basis,” Garg told.

Sources said after restructuring its debt, UP Power Corporation Ltd (UPPCL) has cleared entire R750 crore of power purchase dues to PTC India. The payment was due for more than a year. UPPCL has also started clearing its dues to NTPC Vidyut Vyapar Nigam (NVVN) and Lanco Infratech. NVVN sources told that the UP discom has cleared entire dues to the company. Lanco Infratech's total receivables on account of power supply to discoms have come down to R2,939 crore in the second quarter from R3,285

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Energy bourses expect 5% market share of power trade by FY 16...

 

Power exchanges aim to grab at least 5 per cent market share of all India power trading volume, estimated at 800 billion units, on new regulations and market-friendly products.

The market share will rise from current 2.5 to 3 per cent of the pie, they said.

"Power exchanges can provide electricity for as short as 15 minute period at a competitive price, unlike bilateral trade, where the purchaser has to buy agreed quantity of power for the entire period, even at night when the demand is low. People are preferring to buy from power exchanges which can provide electricity at short notice for a short period of time. Since the trend has been rising since last 6-8 months, we see reaching 5 per cent of total market share by 2015-16," said Rajesh Mendiratta, Director, Business Development, Indian Energy Exchange (IEX),

In India, two exchanges--IEX and Power Exchange India Ltd (PXIL) are offering power as a commodity, which is traded on one-day ahead basis. They also sell renewable energy certificates and solar energy on their respective platforms. IEX is the leading power exchange of the country. 

The trend of buying short term power, currently preferred by mostly industrial units, will expand to power distribution companies (discoms) in future, once Central Electricity Regulatory Commission (CERC) comes up with tighter grid frequency band order. 

Frequency stabilisation is a key requirement to prevent grid collapse. It changes as per demand and supply (frequency rises when demand falls below supply and vice versa). Global standards require that grid frequency should fluctuate in a tight band of 49.95 to 50.10 hertz (Hz), while India has a history of the frequency fluctuating from below 48Hz to above 52Hz. Sudden changes in frequencies causes grid collapse.

As per latest CERC order, frequency fluctuation is allowed in the band of 49.7-50.2Hz. A tight frequency range means buyers or power generators cannot buy or sell power at their wish and have to maintain a fixed amount of power trading on the national grid network.

The regulator has plans to tighten the band bit by bit further.  It already regulates the frequency changes by forcing buyers to pay more when they draw low frequency power.

Power exchanges see the opportunity in frequency tightening, as they hope buyers will opt for exchanges in case of sudden power requirement, as buying through national grid will be expensive.

“If a buyer makes up its requirement via power exchanges in case of failure from supply side, they will not have to pay higher price to national grid. The further tightening of frequency band will ensure more business for power bourses and the market share will surely rise to 5 per cent in next couple of years,” said V V Sharma, senior Vice President, Business Development with PXIL.

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Analysis of Trading activities by Licensed Traders for October 2013...

 

 

CERC has released the analysis of power trading activities performed by the licensed traders for the month of October 2013.

The abstract of the report is presented below:

 

 

 

Summary

• The reported short-term contract volume for October 2013 (analysis of five weeks) is 2262 MUs whereas the same was 1529 MUs for the month of for September 2013 (analysis of four weeks). This is equivalent to about 18% increase in average weekly volume transacted during September.
• 85% of total volume has been contracted at price of more than Rs. 4/ kWh during October as compared to 36% of total volume contracted during September.
• Total number of contracts (including swap & banking) executed during October is 273 by 9 traders whereas in September the number of contracts executed was 180 by 9 traders.

 

Comparison of Short Term OTC contracts prices with Power Exchange prices (on Contracted Date)

The contracts executed are almost evenly distributed with the maximum number of contracts executed in the first week of the period (refer to annexure I for contracts executed week-wise) and the overall price of OTC contracts executed was in the range of Rs. 2.02/kWh - Rs. 6.66/kWh whereas the prices on the Exchanges varied between Rs. 1.89/kWh - Rs. 3.47/kWh

Forward Curve of Power Prices

A forward curve reflects present day’s expectation of spot prices for a future period. Accordingly forward curves have been drawn based on prices of contracts executed for supply of power for future period. Forward curve have been drawn for November 2013 – May 2014 based on 247 contracts and for comparison forward curve has been drawn for October 2013 – May 2014 based on 168 contracts. (Pl refer the embedded report)

Post-facto Comparison of Prices in OTC Contracts and in Power Exchanges (on Power Delivery Dates)

The post facto graph shows the average OTC price vis-à-vis power exchanges prices for the last month’s power deliveries. Hence this compares the spot Power Exchange prices with OTC deliveries (OTC contracts may have been executed earlier but delivered on the same days as on the exchange spot deliveries). The methodology of calculating the data points of OTC prices is same as in the forward curve. (Pl refer the embedded report)

List of traders who have undertaken contracts in October 2013

Trader	30th Sep - 6th Oct	7th Oct - 13th Oct	14th Oct - 20th Oct	21st Oct - 27th Oct	28th Oct - 3rd Nov	Grand Total
PTC India Ltd.	Y(49)	Y(44)	Y(38)	Y(36)	Y(41)	Y(208)
NTPC Vidyut Vyapar Nigam Ltd.	Y(11)	Y(4)	Y(7)	Y(8)	Y(6)	Y(36)
Tata Power Trading Co. Ltd.	Y(4)	NIL	Y(2)	Y(9)	Y(2)	Y(17)
JSW Power Trading Company Ltd.	NIL	Y(2)	NIL	Y(1)	Y(1)	Y(4)
Instinct Infra & Power Ltd.	Y(2)	Y(1)	NIL	NIL	NR	Y(3)
Mittal Processors (P) Ltd	Y(2)	NIL	NR	NR	NR	Y(2)
National Energy Trading & Services Ltd.	NIL	NIL	NIL	NIL	Y(1)	Y(1)
Reliance Energy Trading (P) Ltd.	NIL	NIL	NIL	Y(1)	NIL	Y(1)
Shree Cement Ltd	NIL	NIL	NIL	Y(1)	NR	Y(1)
Grand Total	Y(68)	Y(51)	Y(47)	Y(56)	Y(51)	Y(273)

Note 1: Y ( ): Contracts had been undertaken (Number of Contracts), NIL: No Contracts was made during the week, NR: Not Reported
*Note 2: This table shows list of traders who have reported & undertaken at least one contract during the reported period. There could be some traders who have reported but did not undertake any contracts.

Complete report is embedded below.

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