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It is a common platform where buyers & sellers of Electricity come together for trade. This is a new concept of Power
trading introduced in India under the approved guidelines of CERC.

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To retrieve the excess generation from surplus region and transmit to a deficit region at a market clearing price
(MCP). The MCP is discovered based on the principles of demand and supply. Prior to Exchange operation, this was
done by electricity traders on negotiation basis.

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In market driven economy market forces are contradictory. Buyer wants low price, seller wants other wise. These
conflicting forces determine the correct price of a commodity at a given time.
It is thus important that market forces must remain faceless and anonymous. Facelessness and anonymity creates a
level field for all players.
In today¶s scenario electricity is no more a service, it is a commodity. On an electronic power exchange, buyers and
sellers of electricity from the length and breadth of the country can converge without revealing their identity.
For this we need a nation wide Electronic Power Exchange to allow the Electricity Market to be driven by genuine
market forces of demand and supply.
Indian Energy Exchange (IEX) is the first power exchange in India. It serves as an optional, electronic, nationwide
platform for trading of Electricity.

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The Exchange has brought a true market driven economy in Electricity sector of India. Ours is a power deficit country,
but some regions have surplus power because of abundant hydro potential or coal reserve. Today our country¶s
Transmission System is electrically integrated, therefore it is possible to transmit power from the most remote area of
one region to the load center of any other region. In Pre-Exchange scenario this power trading was conducted purely
on bilateral basis. Along with transmission losses and UI risks, payment uncertainties prevented the true market
driven economy in electricity market. Power Exchange wipes off all these issues by:

i Empowering the Market to discover a uniform market clearing price (MCP) and market clearing volume
(MCV).
i Evenly distributing transmission losses at both ends.
i Enabling participants to hedge against UI risks.
i Guaranteeing secure & timely payment to sellers.
i Generously improving the market environment to encourage investment in new generation capacity, thus
helping make India a power-surplus country.

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Financial Technologies (India) Ltd (FTIL), Multi Commodity Exchange of India Ltd (MCX) shares its Exchange
operations and management experience with IEX.

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Central Electricity Regulatory Commission (CERC).

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i Long term PPA for 25 Years.

i Bulk Power supply agreement.
i Bilateral through power traders.
i Short term bilateral contracts where both Buyers & Sellers are identified before hand &

the prices are decided by negotiation.

i Through Power Exchange platform, where prices are discovered through competitive bidding and the power
is sold to and brought from the single large countrywide pool.
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i Trading through Power exchange is called Collective transaction. Participants of Collective transaction enjoy
priority in Scheduling over bilateral transaction application received within three days prior to the date of
scheduling and up to 15:00 hrs of the one day before date of scheduling clubbed to-gather.
i They also enjoy priority during curtailment due to sudden transmission Congestion over short term bilateral
transaction.

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At present Day-ahead. Anonymous, Simultaneous Competitive Bidding of Electricity Contracts on the Exchange with
price determined from uniform pricing mechanism.
In futureWeek ahead, Fortnight ahead, Month ahead, Quarter ahead, Year ahead and 3 year ahead markets are
envisaged.

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i Minimum Volume = 1MWH

i Minimum Size = 1Hr
i Minimum Bid Price: Tick Size = Re. 1/MWH
i Minimum Volume: Tick Size = 0.1MW

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i Intended buyers & sellers shall have to go through an entity who has been admitted by Power Exchange as
a registered member, by becoming their client.

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i Grid Connectivity either at 11KV, 33 KV, 66 KV, 132KV, 220 KV or 400 KV level.
i NOC from respective SLDC in prescribed format i.e. PX-I.
i Installation of special Energy meter & other auxiliary equipments as directed by

SLDC, which records flow of energy, demand, Voltage & Average frequency at
Fifteen Minute intervals.

i Depositing annual subscription of Rs. One Lac per financial year, to IEX, against

which IEX will provide a unique identification number which enables an applicant
to start trading.

i Depositing the margin money to IEX which equals to the Last seven days average trading obligation
(Applicable for Buyers only)

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The power will flow through the existing STU/CTU network depending on the location of the entity's injection/drawl
point.

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The National Load Dispatch Centre (NLDC), Regional Load Dispatch Centre (RLDC) & State Load Dispatch centre
(SLDC) controls and Regulates the power flow.
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i The Exchange prepares the schedule based on the ATC, MCP & MCV. The Final Schedule is given by the
Power Exchange to the NLDC.The NLDC sends the Schedule to respective RLDC¶s who incorporates the
schedule in their schedule and send the same to respective SLDC's.SLDC delivers the schedule to
concerned buyers or sellers. Once the schedule is delivered, it is deemed that power has been delivered.
i The actual injection/ drawl are recorded by the special energy meter installed at the point of injection / drawl.
The meter reading is collected through telemeter or by joint inspection. 

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Electricity is very dynamic in nature. Any devotion from the schedule is either payable/receivable by the client and is
settled by the RLDC/SLDC under the UI mechanism. UI calculation is compiled by RLDC and certified by Regional
Power Committee (RPC).

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i It is the price of power at a particular grid frequency.

i Presently it varies from Rs 7.35/- per KWH at 49.22Hz to RS 0/- per KWH at 50.30 Hz.UI rate at less than or
equeal to 49.2 Hz is Rs 10.30/- per KWH.

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Prices are governed by the principal of Demand Vs Supply at exchange platform. MCP Is the price of hourly
electricity contracts established on IEX arrived at after considering all valid purchase and sale bids on unconstrained
transmission network.

i All Purchase & Sale bids are aggregated to trace a demand supply curve.
i The bids and offer portfolio shall be assumed to be a sloping curve. All purchase bids can have only non-
increasing quantity for every increase in bid price & every sale bid will have only non-decreasing quantity for
every increase in bid price
i An example for calculation of Market Clearing Price (MCP) & Market Clearing Volume (MCV) is given below.

In the graph shown below:

(a) Demand curve is drawn by plotting the sum of purchase (buying) data (volume) against price. This curve has a
slope downwards.
(b) Supply curve is drawn by plotting the sum of sale data (Volume) against price. This curve has a slope upwards.
(c) These two curves intersect at a point. This is the point of equilibrium. At this point price for both buying and selling
is same.
d) If a perpendicular is drawn from point of equilibrium to price axis i.e. Y axis it will meet at a point on Y axis. Price
representing this point is market clearing price (MCP)
(e) If a perpendicular is drawn from point of equilibrium to volume axis i.e X axis it will meet at a point on X axis.
Volume up to this point represents Market clearing volume.
Mathematically it can be proved that the area under supply curve up to point of equilibrium taking X axis as base is
equal to the area under demand curve from point of equilibrium to the high point of the curve taking the MCP line
which is parallel to X axis, as base.
(f) All sale bides having price less then or equal to MCP value and all purchase bids having more than or equal to
MCP value will be cleared for trade.

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Financial settlement is done by electronic transfer of funds between the clearing members & the Exchange.

? The proceeds from sale of power are transferred to members settlement account by 2 P.M of the
day following the day of delivery by IEX. The fund transfer to clients account is either through
electronic money transfer system or by issuing cheque as preferred by the client.
? The buyers have to pay the amount of power purchased at MCP by 14.30 Hours of the day of
bidding.


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? Trading session is 10am to 12 noon i.e. the clients bid will be accepted on the system during this
period. After this it is our responsibility to take care of the rest of the formalities.
? Members will inform the buyers about the status of their bid by 12.30 P.M. If the buyers bid are
provisionally accepted at Exchange platform, they should deposit the money to members account
by 14:30 hours or else their bid will be rejected. If you are a seller we will let you know the Final
MCP/MCV at 4.00 PM

  
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Collection of ATC from NLDC/RLDC & display the information on IEX website and also to be
9.00 AM as an internal input (master) for scheduling.
10.00 AM to 12.00 PM Bid - Call session
11.00 AM Funds pay out pertaining to day before previous days transaction for sellers.
12.00 PM to 12.30 PM Exchange to determine MCP & match the orders.
12.30 PM PROVISIONAL MCP & MCV
Communication to bank to Confirm & block the funds pay in from buyer member¶s settlement
12.30 PM to 1.00 PM account.
Communication to NLDC/RLDC for transmission capacity.
Exchange will receive confirmation from bank for availability & blocking of clear balance along
1.30 PM a note on shortages.
In case if the member brings in funds in his settlement account afterwards (members who we
2.30 PM reported as short), the bank will confirm it to the exchange.
3.30 PM NLDC/RLDC will confirm the transmission capacity
4.00 PM Exchange will generate FINAL MCP & MCV
4.00 PM to 4.30 PM Dispute period
4.30 PM File sent to banks for actual debits
Exchange releases the trades schedule to the NLDC/SLDC
4.45 PM Confirmation file received from bank
5.00 PM NLDC/RLDC will confirm the final ATC & confirm the schedule if any

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Members will provide following services to their clients:-

? IT infrastructure for bidding on electronic exchange platform

? Advisory advices related to power prices and the follow on bidding strategy (e.g weather related
information, demand supply position etc.)
? Facilitation of procedures on behalf of his clients for delivery of power (e.g. SLDC standing
clearances, co-ordination with NLDC etc.) We also provide additional received to our clients.
? Training And Client Grooming
? Market Monitoring And Client Alerting
? Facilitation of procedures on behalf of his clients for delivery of power (e.g. SLDC standing
clearances, co-ordination with NLDC etc.) We also provide additional received to our clients.

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? In day ahead marked. Both buyers & sellers are to adjust the loses up to their regional periphery.
RLDC will adjust the CTU & STU loses at the time of scheduling

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Statutory Charges to be paid by the Client:
* Price for traded volume of electricity @ MCP discovered at IEX platform
* NLDC Application Fee @ Rs. 5000/- per day. (To be shared by the number of successful
bidders on national basis. For example, Suppose number of successful bidders in national
 level = 50. So share of NLDC application fee for each successful bidder = Rs.5000/50)
* Applicable transmission charges for CTU lines @ Rs. 100 per MWH
* Applicable transmission charges for /STU lines. @ Rs 80 per MWH, if applicable and if
not separately notified by the concerned SERC. In case the concerned SERC notifies the
transmission charges separately the same shall be applicable.

* NLDC scheduling & operating charges Rs.5000 per day per entity involved.
(All buyers within a state shall be clubbed together into one group and all sellers within a
state shall be clubbed together into another group .Each buyer group counted as regional
entity buyers and each seller group counted as regional entity sellers).
Example: Suppose No of successful buyers on regional basis = 7 and number of
successful sellers on regional basis = 6 and number of successful bidders in national level
= 16. Then Share of NLDC scheduling & operating charges for each successful bidder =
(Rs.5000 X Regional Entity buyers + Rs.5000 X Regional entity sellers) / No of successful
bidders.

* SLDC scheduling & operating charges Rs. 2000/- per day. (If applicable)

* Trading margin of IEX @ Rs. 10/MWH

IEX will pay the above amounts to the respective authorities and deduct or add the
amount from/to the client obligation.