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Real time energy trading in India

Opening of Real Time Market for Energy Trading in India

"Minister of State (Independent Charge) Power and New & Renewable Energy R K Singh launched pan-India Real Time Market in electricity through video conference in New Delhi, on June 3, 2020," a power ministry statement said.

In India there are two exchanges - Power Exchange India Ltd (PXIL) and India Energy Exchange (IEX) where energy is traded in a day-ahead market (DAM). Consumers (state owned discoms & captive users) were able to buy power for next day on both exchanges where trading was done for two hours from 10AM to 12PM every day.

From 01-Jun-202, both IEX & PXIL has started real time trading of energy. In this newly launched RTM (Real Time Market), there will be auction every half hour all thru the day. In these 48 auctions, earliest power delivery can be scheduled for within one hour of the end of auction. E.g. customer can buy in an a 10:00AM to 10:30AM auction and have power delivery scheduled at 11:30AM.

The average price discovered on day one was Rs 1.55 per unit, the auctions saw the price go as low as Rs 0.10 per unit on the platform, IEX said in a statement.


Trend of volume cleared and average price for period 01-Jun thru 12-Jun-2020

Volume normalized to show trend in relation to price

 

This is 42% cheaper than the day-ahead market

Normal practice is for distribution companies to declare their demand to concerned regulatory authority, in 15-minute time slots, for next day. Regulator then prepares interchange schedule based on demand & supply from all participants. During the day, for any deviation from declared demand, utility pays stipulated charge thru DSM (Deviation Settlement Mechanism, earlier known as UI charge). Regulator calculates UI charge for each 15-minute block, one factor of which is  impact on grid frequency. So, larger a deviation caused by a utility, higher will be the UI charge to be paid.

Exchanges provided another option to utilities & gencos to manage their portfolio in a better way. With introduction of RTM, all participants will have more flexibility in managing the demand & supply and avoid unscheduled interchanges to a large extent. Grid operators will also benefit by enhanced safety & security of the grid due to less deviations in rated frequency.

Share of renewable energy has reached 10 percent and is set to increase even more in coming years (target of 175GW by 2022) set by govt. This increasing load of renewable with its inherent nature of intermittent and unpredictable supply adversely impacts grid balancing process. Efficient price discovery in RTM will bring more discoms to schedule power delivery thru this market and help in balancing the grid all at the lower cost to them. Credit rating agency ICRA estimates saving of 73M USD by participating in RTM.

Table below shows market clearing price in RTM on 15-Jun-20 for a particular area.

For same area, on same day the DSM charges ranged from 0.45 INR/kWh at 50.05Hz frequency up to 8.00 INR/kWh at 49.85Hz pegged at 2.24 INR/kWh as Day Ahead Market price taken as reference.

While it is early days with RTM, it can be expected that real time market will bring savings to utilities and stability to grid.

Hour

SessionID

INR/kWh

1

1

2.10

2

1.75

2

3

1.50

4

1.50

3

5

1.75

6

1.50

4

7

1.75

8

1.75

5

9

1.75

10

1.75

6

11

1.20

12

1.75

7

13

1.00

14

1.00

8

15

1.00

16

1.10

9

17

1.40

18

1.50

10

19

1.10

20

1.71

11

21

1.71

22

1.70

12

23

1.70

24

1.50

13

25

1.70

26

1.70

14

27

1.70

28

1.70

15

29

1.70

30

1.70

16

31

1.70

32

1.70

17

33

2.00

34

2.50

18

35

2.50

36

2.50

19

37

2.49

38

2.25

20

39

2.35

40

2.50

21

41

2.54

42

2.77

22

43

2.70

44

2.77

23

45

3.00

46

3.00

24

47

2.71

48

2.70

 

Ajit Tawde's picture

Thank Ajit for the Post!

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