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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
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
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
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
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
Equilibrium
Quantity demanded is equal to quantity supplied !
Quantity
Price of commodity
Surplus
Shortage
10
Price elasticity of demand
Elastic More Elastic
Less elastic
Perfectly Inelastic
Perfectly elastic
Change in Quantity Demanded in response to change in Price
Bilateral (OTC) Markets
• Common price through a co-operative approach
• Major Concerns –– Price Discovery – Price Discrimination– Liquidity– Transaction Costs
12
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
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
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
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
procedures16
Bilateral (OTC) Contract vs. Power Exchange
OTC contract Exchange Traded
Available to limited market participants
Liquid market – wider market participation
Bilateral/ Customized Contracts Standardized contracts
Counter party credit risk Counter party risk assumed by exchange
Is an involved participant Platform is Neutral
Opaque dealing Transparent 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
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
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
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 forecasting20
21
Auction Models
MCP
MCV MCV
MCP
PRICE PRICE
VOLUMEVOLUME
One Side Auction Two Side Auction
Supply SupplyDemand
Estimated Demand
MCP = Market Clearing Price MCV = Market Clearing Volume
Social Welfare Maximization
22
MCV
MCP
PRICE
SalePurchase
Accepted Purchase Bids (>= MCP)
(Consumers’ Discount)
Accepted Sale Bids (<= MCP)
(Generators’ Surplus)
Price Calculation Algorithm -Day ahead– Hourly Bids
PRICE-paise/kWh 0 100 200 230 250 270 300 400 500 600 700
PARTY A-ZONE-1 600 600 600 400 400 400 400 200 150 100 100
PARTY B-ZONE-1 600 600 400 400 300 200 0 0 -50 -100 -200
PARTY C-ZONE-2 0 -100 -100 -100 -200 -300 -400 -500 -500 -500 -500
PARTY D-ZONE-2 0 0 -200 -300 -300 -300 -400 -500 -500 -500 -600
SUM, PURCHASE 1200 1200 1000 800 700 600 400 200 150 100 100
SUM, SALES 0 -100 -300 -400 -500 -600 -800 -1000 -1050 -1100 -1300
NET TRANSACTION 1200 1100 700 400 200 0 -400 -800 -900 -1000 -1200
0
100
200
300
400
500
600
700
800
0 200 400 600 800 1000 1200 1400
MWh/hr
pa
ise
/kW
h
23Market Clearing Price (MCP) : 270 p
Market Clearing Volume (MCV): 600MW
AGGREGATED SALE BIDS
AGGREGATED PURCHASE BIDS
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
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
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
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
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
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
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
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
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
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
• 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
• 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
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
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
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
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
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
N L D C
Power Exchange
RLDCs
Information exchanged over
leased line between NLDC and PX
SLDCsFinal Trade Results for State Utilities & Intra State
Entities to be sent by PX directly to SLDCs
Information Exchange
Pro
vis
ion
al
So
luti
on
Req
ues
t for
Sch
edu
lin
g
Demarcation into Bid Areas
Area Region States
N1 North JK, HP, CHD, PUN, HAR
N2 North RAJ,DEL, UP, UTT
W1 West MP, CHTG
W2 West MAH,GUJ, GOA, DD,DNH
S1 South AP, KAR, GOA
S2 South TN, KER, PONDY
E1 East WB, SIK, BIH, JHAR
E2 East ORISSA
A1 North-East TRIP, MEGH, MANI, MIZO
A2 North-East AS, AP, NAGA
NLDC 46
SR
ER+NER
WR
NR Scenarios:
1. 4D
2. 3D + 1S
3. 2D + 2S
4. 1D + 3S (Congestion)
5. 4S
SKEWED LOAD GENERATION BALANCE
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
ZONE - A (LOAD)
0
50
100
150
200
250
300
0 20 40 60 80 100MW
PR
ICE
ZONE - B (GEN)
0
50
100
150
200
250
300
-140 -120 -100 -80 -60 -40 -20 0MW
MCP=125
Case – II : Constraint = 40 MWSolution:
• Increase price in Zone A to reduce demand to 40 MW
• Decrease price in Zone B to reduce supply to 40 MW
Transmission Congestion Management: Methods
• Pricing Based– Explicit Auction– Implicit Auction– Market Splitting
• Remedial– Counter Trade– Re-dispatching
NLDC 49
Congestion Management in Multi Exchange Scenario (1)• ISSUE
– Sharing of available margins• Possible Methods
– Priority Based Rules– Explicit Auction– Merging of Bids
• Priority Based RulesLowest MCPHighest MCVHighest MCP X MCVMaximization of Social Welfare, consumer surplus, etc. May not lead to an overall economy
NLDC 50
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
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
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 pricesMultiple exchanges
NLDC 53
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
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 62SOURCE:IEX Website
Dealing in Renewable Energy Certificates (1) Provisions in the CERC REC Regulations, 2010Regulation 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
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
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
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 Price 3,900 17,000
Floor Price 1,500 12,000
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
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
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
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
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 Sale13:00 to 15:00 hrs
1a
Bid for Purchase13:00 to 15:00
1b
Central AgencyCentral Agency
Verification Conditions(By 15:30)
Verification Conditions(By 15:30)
22Confirmation
Of REC validity & quantity
(by 16:00)
Confirmation Of REC validity &
quantity(by 16:00)
Central AgencyCentral Agency
Intimation of Trade resultsFor Extinguishing REC
(By 17:00)3
Market Clearance(Volume & Price)
ReportsReports
4
Information Dissemination
• Central Agency Website: www.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.comwww.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
04/19/23 POSOCO 80
Corridor Utilization
IEX Website
CongestionObserved Seasonally
Only towardsNR, SR and S1 – S2
Only a couple of corridorscongested out ofa dozen
04/19/23 POSOCO 81
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
04/19/23 POSOCO 82
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
NLDC 85
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
NLDC 86
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
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
C5-101: Experience of India’s first powerexchange 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
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
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.
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.
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