Green Day Ahead Market (Petition no. 187/MP/2016) CERC Hearing I December 1, 2016
Brief Introduction IEX since last 8 years has been successfully operating markets in: Day Ahead Market (DAM) [based on collective transactions] Term Ahead Market (TAM) [based on bilateral transactions] Renewable Energy Certificate Market [REC] IEX Proposes a new product Green Day Ahead Market (G-DAM) on its platform through present Petition. Regulation 6 of PMR allows Exchanges to introduce new contracts after permission from Hon ble Commission Part - 3 Approval / Suspension of the Contracts by the Commission 6. The Commission may, on an application made in this behalf, permit any Exchange to introduce such contracts as specified in Part 2 of these Regulations for transacting on the Exchange. 7. (1) An Exchange seeking permission under Regulation 6 shall submit to the Commission the complete and detailed contract specifications..
Background GoI has set an ambitious target of 175GW of installed RE capacity by the year 2022 Target comprises: 100 GW solar capacity & 60 GW wind capacity 130GW will be installed within a period of 6 years capacity will potentially be installed in RE rich States States may not be able to absorb all RE generation by themselves due to various factors (cost/technical issues etc.) RE deficient States/ Obligated Entities are potential buyers for such power who have to fulfill their RPOs. Presently RE transactions are executed through preferential tariff route or REC route or third party route which are mostly confined within the State. National Level Exchange based market exclusive for renewable energy will provide competitive avenue to RE buyers/sellers.
Background Hon ble Commission has already notified amendments to DSM Regulations to facilitate integration of renewable energy which is infirm in nature, with the grid. As per new CERC DSM Regulations, Aug2015: Settlement of RE power as per schedule (not on actual) Deviation settlement of grey energy deviation through a pool (UI) Deviation in green attribute settled through RECs Revision in Schedule allowed subject to maximum 16 in a day Revisions of collective transactions not allowed as per Hon ble Commission IEGC Regulations, 2010 and amendments thereof. Enabling regulatory framework has made it possible for Exchange to launch contracts for Renewable Energy transactions.
Proposed GDAM IEX Petition seeks approval for introducing Green Day Ahead Market (G-DAM) exclusive for trading of Renewable Energy (power + green attributes) comprising: Solar Contracts Non-Solar Contracts Functioning of G-DAM will be on similar lines with existing DAM Buyers in this market will be eligible for respective RPO compliance.
Green Day Ahead Market (G-DAM) GDAM Green Power Cleared Green electricity at bundled 0800-0900 Hrs price to meet RPO If unsold DAM 1200-1400 Hrs Cleared Electricity at DAM MCP + Tradable RECs Proposed Framework Green Day-ahead Market (G-DAM) to be similar to DAM Based on principle of Collective Transaction Solar & Non Solar Contracts Must run status of RE to be adhered to. In order to facilitate evacuation of entire power of RE Sellers, the Exchange proposes to provide a window to RE Sellers/buyers to bid unsuccessful quantum from G-DAM in DAM. For quantum sold in DAM market, RE Seller to get Area Clearing Price (ACP) of DAM + equivalent amount of RECs Deviation Settlement as per Applicable Regulatory Framework No revisions in the collective schedule as per IEGC Regulations
G-DAM Eligibility Sellers RE sellers connected at CTU Embedded RE sellers situated in State where SERC has adopted framework on the line of CERC framework Merchant green power capacity Eligibility of RE sellers shall be ascertained at the time of registration at the Exchange based on NOC/Standing clearance issued by RLDC/SLDC, as applicable. Buyers Entities eligible to procure power through open access Buyers will be eligible to participate in the G-DAM based on the same NoC issued for DAM/Intra-Day market by SLDC.
G-DAM Broad Features Price Discovery methodology: Uniform market clearing price for all buyers and sellers who are cleared. Delivery: Next day (T+1) from 0000 Hrs to 2400 Hrs in 96 separate 15 min time blocks. Delivery Point: At Regional Periphery. Transmission Congestion management: As per existing practice of market splitting in Electricity Day Ahead Market. Deviation Settlement Mechanism: As per applicable Regulations notified by Appropriate Commission. Risk Management: As per existing practice of Electricity Day Ahead Market. Allocation of Available Transmission Capability (ATC) by NLDC: As per availability of ATC at the time of Request. Pro-rata basis between the two Exchanges. Solar to be given priority followed by Non-Solar or as may be decided by the Hon ble Commission.
G-DAM: Potential Benefits Another avenue for green generators to sell power Encourage new green capacity without relying on Discoms to sign PPAs Competitive prices Buyers can purchase as and when they need obviating the need to tie up capacity in advance Easy settlement of deviations High certainty of being cleared as liquid DAM is available as fallback if volume not cleared in G-DAM. Discoms preference of buying green power over REC is addressed. RE rich States can sell RE power to RE deficit States. RE generators under preferential tariff in States having excess wind/solar power are being curtailed due to Discoms inability to pay and also many RE generators are financially stressed due to abnormal delay in payments. Such generators will now be able to sell power in the market. Small participants (Open Access Consumers & Captive Generators) can buy green power to meet their RPO.
Proposed GDAM and DAM timelines Final clearing of GDAM is proposed to be completed by 11.30 AM To accommodate unsuccessful bids of G-DAM, it is proposed to shift existing DAM trading window by 2 hour i.e. from 10-12 AM to 12-2 PM to allow unsuccessful G-DAM participants to place their bids in DAM. Consequently, DAM timelines will be stretched by 2.5 hrs. PROPOSED G-DAM & DAM TIMELINES
Amendments required in existing Regulations and Procedures CERC REC Regulations 2010: Exception required for GDAM market regarding issuance of RECs to participants on Exchange. As per CERC REC Regulations, a RE Generator shall be eligible for issuance of RECs if it sells the electricity through power exchange at market determined price. Procedure of scheduling of Collective Transactions: Timelines of various activities related to scheduling of power traded in Day Ahead Market of Power Exchanges need to be revisited. Hon ble Commission is urged to specifically hold that the RE power bought under G-DAM shall be eligible for RPO compliance of obligated entities. Hon ble Commission may modify/amend any other Regulations/Procedure as it may deem fit to enable introduction of Green Contracts on Exchange platform
Amendments in IEX Rules, Business Rules & Bye Laws Hon ble Commission may grant in-principle approval IEX shall submit amended Rules, Business Rules and Bye Laws of the Exchange and contract specifications for approval in due course of time as may be directed by the Hon ble Commission
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PROPOSED G-DAM & DAM TIMELINES S. No. SESSIONS G-DAM EXISTING DAM PROPOSED DAM 1. Bid - Call session 08.00 AM -09.00 AM 10.00AM-12.00 PM 12.00 PM 02.00 PM 2. Determination of MCP/MCV By 09.30 AM By 12:20 PM By 02:30 PM 3 Publish of Provisional Obligation By 09.45 AM By 1.00 PM By 02:45 PM 4. Request of ATC to NLDC, Request for confirmation from bank on availability of funds By 10.00 AM By 1.00 PM By 3.00 PM 5. NLDC Exception for scheduling, Receipt of confirmation from bank on By 10.45 AM By 2.00 PM By 4.00 PM availability of funds 6. Determination of ACP/ACV By 11.15 AM By 2.30 PM By 4.30 PM 7. Publish of Final Obligation By 11.30 AM By 2.45 PM By 5.00 PM 8. Submission of Application for scheduling to NLDC By 12.00 PM By 3.00 PM By 05.30 PM 9. NLDC sends scheduling request to RLDCs By 1.00 PM By 4.00 PM By 06.30 PM 10. RLDC acceptance of scheduling to NLDC By 1.30 PM By 5.00 PM By 07.00 PM 11. NLDC conveys acceptance of scheduling By 2.00 PM By 5.30 PM By 07.15 PM to Exchange 12 Funds and Margin Pay In By 5.30 PM By 3.00 PM By 05.30 PM Proposed timelines are indicative and flexible to revision based on NLDC feedback and advice of the Hon ble Commission Back
Proposed GDAM and DAM interface RE Seller (Solar/Non-Solar) Bid submission GDAM 8.00 9.00 AM DAM 12.00 2.00 PM Scheduled as RE Power @11.30AM (Power + green attributes) Successful Bid Un-Successful Bid of G-DAM submission in DAM Issuance of RECs equivalent to scheduled power by Central Agency Clear Bid Scheduled as Conventional Power @5.30PM