Indian Energy Exchange : IEX Bulletin

OCTOBER 2023, ISSUE 45

IN THIS ISSUE...

REGULATORY NEWS

01	Ministry of Power Issues Directions to Extend the Advisory
in January 2023 by Modifying Mandatory Blending to 4% (by
	weight) for the Remaining Period of FY 23-24
02	Ministry of Power Notifies Electricity (Third Amendment)
Rules, 2023
02	Telangana State Electricity Regulatory Commission Issues
Draft (Terms and Conditions of Open Access), Regulation,
	2023 (02.09.2023)
03	Ministry of Power Issues Letter for Withdrawal of Guidelines
dated in March'21 and July'21 22.3.21 & 5.7.21 (11.09.2023)
03	Madhya Pradesh Electricity Regulatory Commission Issues
Draft Resources Adequacy Regulation, 2023
04	CERC Issues Staff Paper on Grid Security Charge in
September 2023
05	CERC Issues Order of Removal of Difficulties (2nd Order)
in Giving Effect to Certain Provisions of CERC GNA
	Regulations, 2022
05	CERC Issues Order of Removal of Difficulties (1st Order)
in Giving Effect to Certain Provisions of CERC GNA
	Regulations, 2022
06	Various States: Additional Surcharge Orders

POWER INSIGHTS: SEPTEMBER 2023

07	POWER INSIGHTS: SEPTEMBER 2023
MARKET NEWS
08	Market News
TRADE INSIGHTS
10	Day-Ahead Power Market
11	Term-Ahead Power Market
12	Real-Time Electricity Market
13	Green Market

REGULATORY NEWS

Ministry of Power Issues Directions to Extend the Advisory in January 2023 by Modifying Mandatory Blending to 4% (by weight) for the Remaining Period of FY 23-24

On 1st September 2023, the Ministry of Power (MoP) issued directions to extend the advisory of January 9th 2023 by modifying mandatory blending to 4% (by weight) for the remaining period of the current financial year FY23-24. The key point of advisory are;

The demand touched 236.6 GW in August'23, around 21% higher than the peak demand in August'22.

During Aug'23, the gap between coal consumption at DCB plants and receipt of domestic coal has been about 2 Lakh tonnes/day.

CEA has estimated a domestic coal requirement for H2 (October 2023 to March 2024) of FY23-24 of about 404 MT. However, due to various logistical constraints associated with railway network the availability of rakes during H2 of FY 2023- 24 will be sufficient for loading and dispatch of only 397 MT of domestic coal.

The Central, State GENCOs and IPPs are directed to take necessary action / plan to import coal for blending at the rate of 4% (by weight) through a transparent competitive bidding process till 31.3.2024.

While determining the share of domestic coal to be supplied to the GENCOs from CIL/SCCL, it will be ensured that their respective Pit-Head Stations are provided 100% of their

domestic coal requirement. In case of adequate availability of domestic coal, GENCOs should avoid using imported coal at their Pit-Head stations.

Import of coal for blending purpose needs to be done by all GENCOs to avoid logistics constraints at Ports and Railways.

Ministry of Power Notifies Electricity (Third Amendment) Rules, 2023

On 1st September 2023, the Ministry of Power notified the third amendment to Electricity Rules 2023. According to the amendment:

In Rule 3:

In sub-rule (1), in clause (a), in sub-clause (i), for the words "captive user", the words "captive user (s); and" shall be substituted;

In sub-rule (1), in clause (a), in sub-clause (i), proviso to be omitted;

In explanation, in clause (b), for 2nd proviso, following to be substituted:

"Provided further that the consumption by a subsidiary company as defined in clause (87) of section 2 of the Companies Act, 2013 (18 of 2013) or the holding company as defined in clause (46) of section 2 of the Companies Act, 2013 (18 of 2013), of a company which is a captive user, shall also be admissible as captive consumption by the captive user."

After sub-rule (2), following sub-rule shall be inserted, namely:-

"3) The captive status of such generating plants, where captive generating plant and its captive user(s) are located in more than one state, shall be verified by the Central Electricity Authority as per the procedure issued by the Authority with the approval of the Central Government."

Telangana State Electricity Regulatory Commission Issues Draft (Terms and Conditions of Open Access), Regulation, 2023 (02.09.2023)

On 2nd September 2023, the Telangana State Electricity Regulatory Commission (TSERC) issued draft (Terms and Conditions of Open Access), Regulation, 2023. According to the draft:

Short-Term Open Access User is a user of transmission and/or distribution system(s) entering into an open access agreement with licensee(s) for a period not exceeding one (1) month.

For STOA transactions, Nodal Agency shall be SLDC. SLDC shall allow STOA transactions after consulting concerned Transco and/or Discom. Provided that STOA transactions with duration of less than one week, the SLDC may not consult the concerned licensees.

Open Access user having Contracted Capacity of above 1 MW are eligible for Open Access;

Consumers with CD or sanctioned load >= 100 kW, either through a single or multiple connections aggregating 100 kW or more located in same electricity division of a Discom, eligible to take power through GEOA.

SLDC shall process STOA applications within the following time limits:

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Duration for which open access is required	Maximum processing time
Up to one day	12 hours
Up to one week	Two days
Up to one month	Seven days

GEOA application to be submitted on the central portal setup by CNA.

CSS & Additional Surcharge applicable as per MoP Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.

Banking charges applicable in kind @ 8% of the energy banked.

Banking settlement period shall be a calendar month. Un-utilised energy to be considered as lapsed at the end of each calendar month.

Energy banked during peak TOD slots permitted to draw during peak as well as off-peak energy banked during off- peak TOD slots shall be permitted to draw during off-peak TOD slot only.

Ministry of Power Issues Letter for Withdrawal of Guidelines dated in March'21 and July'21 22.3.21 & 5.7.21 (11.09.2023)

On 11th September 2023, the Ministry of Power issued a letter for withdrawal of guidelines dated 22nd March 2021 and 5th July 2021. According to the letter:

MoP superseded guidelines issued vide letter dated 22.3.21 and 5.7.21, which enabled Discoms to continue drawing power after completion of PPA term. MoP after considering the legal position, decided that on expiry of PPA, both parties to the agreement are free to decide whether they will get into another agreement with each other for purchase/ sale of power or else the Generator can sell the power in the exchange/bilateral/any other party and the Discoms may buy power from entity of its choice.

CGSs of a CPSU whose PPAs have expired will be brought together in a pool, bundled with Gas based power and sold to whosoever wants to buy. Rate will be equal for all buyers of the pool.

Madhya Pradesh Electricity Regulatory Commission Issues Draft Resources Adequacy Regulation, 2023

On 13th September 2023, the Madhya Pradesh Electricity Regulatory Commission (MPERC) issued draft Resources Adequacy Regulations 2023. According to the draft:

Resource Adequacy framework comprise of planning of generation resources for reliably meeting projected demand in compliance with reliability standards for serving the load with optimum generation mix.

Resource Adequacy framework shall cover following steps:

o Demand assessment and forecasting

• Generation resource planning

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o Procurement planning

o Monitoring and compliance

Resource Adequacy exercise shall be developed & prepared for a planning period of 10 (Ten) years on annual rolling basis

MP Power Management Company Limited (MPPMCL) on behalf of the distribution licensees shall develop and prepare Long-term Distribution Resource Adequacy Plan (LT-DRAP),Medium-term Distribution Resource Adequacy Plan (MT-DRAP) and Short-term Distribution Resource Adequacy Plan (ST-DRAP)

MPPMCL shall keep the share of Long-term contracts in the range of 75-80% of the RAR and Medium-term contracts in the range of 10% - 20% of the RAR while the rest to be met through Short-term contracts

Power procurement through Day-Ahead Market, shall not be considered towards the contribution for meeting Resource Adequacy Requirement (RAR).

CERC Issues Staff Paper on Grid Security Charge in September 2023

The Central Electricity Regulatory Commission (CERC) issued a staff paper on Grid Security Charge in September. According to the paper, some points of discussion are as follows:

Paper discusses measures for ensuring adequacy of reserves &, in turn, reliability of operation. Advance procurement of reserves & measures to optimally utilise existing gas-based capacity in interest of grid security.

Long Term Measure - Advance Procurement of Reserves

• Advance procurement of reserves for long term may not be optimal.
• Advance procurement may be allowed over a 3-month time horizon.
• Capacities procured must be subjected to merit in order.
• Amendment required in AS Regulations to enable the above.

Interim Measure - Optimal Utilisation of Gas-based Generation

Option-A: Optimally utilise existing gas-based capacity through SCUC subject to merit order i.e., bringing such capacity on bar scheduling up to tech min during high demand period & keeping balance capacity as reserves for deployment under Ancillary Service.

Option-B: Direct gas-based generating stations to bid during high demand in the market to ensure it is cleared at least up to tech. min. Shortfall in recovery of generation cost will be recovered as Grid Security Charge from DSM Pool.

Mechanism for Recovery of Cost Towards Reserves/Ancillary Services

Cost towards reserves should first be met out of surplus in DSM Pool account. Net deficit over and above what is met out of DSM Pool Account shall be recovered as Grid Security Charge.

Mechanisms proposed for allocation of grid security charge:

Option-I: Net deficit shall be apportioned among drawee DICs in proportion to shortfall against their allocated share of reserves as estimated and published by NLDC.

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Option-II: Net deficit amount be allocated across the drawee DICs as the Grid Security Charge in proportion to their GNA quantum.

Option-III: Net deficit in the ratio of 50% on the shortfall of reserves and 50% on the GNA of DICs.

CERC Issues Order of Removal of Difficulties (2nd Order) in Giving Effect to Certain Provisions of CERC GNA Regulations, 2022

On 29th September 2023, the Central Electricity Regulatory Commission (CERC) issued an order of removal of difficulties (2nd Order) in giving effect to certain provisions of CERC GNA Regulations 2022. According to the order:

As per CERC order dated 22.09.2023 in Petition No. 11/SM2023 Gencos having COD as on 01.10.23 may apply for connectivity & submit Conn BG3 to CTU if they wish to schedule their power, and CTU shall issue provisional GNA to such entities which shall be treated as deemed T-GNA.

Some gencos represented that only few working days remaining between release of order by CERC (22.09.2023) and GNA start date (01.10.2023), some more time will be required for submission of BG.

CTU informed many BGs submitted by gencos have defects.

CTU informed that these gencos are already connected to grid and transacting power under STOA, therefore, if such gencos apply for connectivity/transition but could not submit BGs due to paucity of time may be given a time extension of 15 days for submission of the same.

CERC considered giving time till 16.10.2023 to such Generators to submit the required Bank Guarantees.

CERC Issues Order of Removal of Difficulties (1st Order) in Giving Effect to Certain Provisions of CERC GNA Regulations, 2022

On 30th September, the Central Electricity Regulatory Commission (CERC) issued an order of removal of difficulties (1st Order) in giving effect to certain provisions of CERC GNA Regulations 2022. According to the order:

Issue: Scheduling of generating unit from 'D+2' day from declaration of COD. CERC observation:

'd' referred to in 27(2) shall be construed as the date when a generating station intimates the commercial operation of the generating station or unit thereof, and the scheduling shall start from 0000 hours of D+2 day.

Issue: Revision of estimated restoration time in case of forced outage. CERC observation:

DC revision from 7th/8th block, on account of forced outage & declaration of estimated time of restoration not be counted as revision.

A genco in such case may revise its DC when it is certain of coming on bar, which will become effective from the 7th/8th block. This shall be counted as a revision of DC which is allowed to be punched only once a day.

Issue: Revision of Declared Capacity. CERC observation:

CERC is of the view that gencos or ESS covered under Regulation 49(7) of Grid Code shall be allowed 2 revisions of DC & schedule in a day due to reasons such as partial outage of the unit or variation of water availability for hydro plants or variations in gas supply for gas stations.

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Issue: Obligation to supply in case of USD. CERC observation:

Obligation to supply electricity from alternate sources applicable only in case the generating station retains its DC. A genco opting to go under USD due to requisitions less than minute turndown level, and if it retains its DC, then genco has obligation to supply against beneficiary schedule.

If genco revises DC if allowed as per Grid Code, the beneficiary cannot request for schedule. Irrespective of this clarification, genco shall comply with any requirement or obligation to supply as per agreements entered between genco and beneficiary.

Issue: Revision of schedule of RE Generators under T-GNA. CERC observation:

WS or ROR seller shall be able to revise its schedule applicable from 7th/8th time block, irrespective of whether it is under GNA or deemed T-GNA.

Issue: Consent to generator for scheduling in DAM. CERC observation:

Gencos whose tariff is determined u/s 62, may sell its URS as available at 9:45 AM in DAM, without the consent of the beneficiary(ies).

Issue: Transition from STOA to T-GNA regime (corridor allocation). CERC observation:

STOA transactions, which have already been approved, have been treated as exigency applications. However, since it's a pre-approved transaction, it shall be given priority in the corridor after scheduling GNA transactions.

Various States: Additional Surcharge Orders

State Tariff

Orders

Tariff Change

Uttarakhand	Uttarakhand ERC has worked out Additional Surcharge at Rs. 1.05/ unit against claim of Rs. 1.22/unit for
October 2023 to March 2024 (existing 0.98/unit).
	TSERC issued Order on Additional Surcharge for H2 of FY 2023-24 approving ASC @Rs. 1.98/unit against
	claim of Rs. 3.43/unit.
Telangana	TSERC issued following direction in the ASC Order- Consider total demand charges recovered for HT
	network only i.e., by excluding LT network cost recovery towards demand charges recovered by TSDISCOMs
	from the open access consumers.
Gujarat	Gujarat ERC has worked out Additional Surcharge at Rs. 0.87/ unit against existing ASC of Rs. 0.76/unit.
Haryana	Haryana Discoms have claimed Additional Surcharge at Rs. 0.53/unit, against existing ASC of Rs. 0.78
Discoms
Punjab	Punjab Discom have claimed Additional Surcharge at Rs. 1.00/unit, against existing ASC of Rs. 0.70/unit
Discoms

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POWER INSIGHTS: SEPTEMBER 2023

Capacity

In September 2023, all India installed capacity stood at 4,25,406 MW with capacity addition of 1,119 MW during the month with break-up as below:

Thermal: 850 MW (Increase) • Renewable: 269 MW (Increase) • Hydro: No change • Nuclear: No Change

All India peak demand met printed at 2,39,769 MW during April'23 - September'23 registering a 15.7% YoY increase from 2,07,231 MW during April'22 - September'22.

All India energy met was higher by 7.6% at 845.5 BUs during April'23 - September'23 compared with 786.1 BUs during April'22 - September'22.

All India Installed Capacity (in MW)	Demand and Supply Position

(Source: www.cea.nic.in)

Peak Demand Met Comparison of Key States

The comparison of the peak demand met in the key states during April - September 2022 and April - September 2023 is as here under:

State	Apr-Sep'22	Apr-Sep'23 YoY (%)
Maharashtra	28,846	27,996	-2.9%
Gujarat	21,382	24,544	14.8%
Madhya	12,592	14,852	17.9%
Pradesh
Uttar Pradesh	26,589	28,284	6.4%
Punjab	14,311	15,293	6.9%
Andhra Pradesh	12,293	12,900	4.9%
Haryana	12,768	12,844	0.6%
Tamil Nadu	17,248	19,045	10.4%
Karnataka	14,725	16,950	15.1%
Telangana	13,079	15,370	17.5%
All India	2,07,231	2,39,769	15.7%

(Source: www.cea.nic.in)

Energy Met Comparison of Key States

The comparison of the energy met in the key states April - September 2022 and April - September 2023 is as here under:

State	Apr-Sep'22	Apr-Sep'23 YoY (%)
Rajasthan	48,950	51,482	5.2%
Uttar Pradesh	84,636	85,082	0.5%
Gujarat	69,844	77,837	11.4%
Haryana	36,246	36,356	0.3%
Punjab	43,263	42,381	-2.0%
Maharashtra	92,000	1,01,699	10.5%
Telangana	36,359	39,905	9.8%
Madhya	43,078	49,665	15.3%
Pradesh
Andhra Pradesh	36,279	40,975	12.9%
Tamil Nadu	59,915	64,720	8.0%
Karnataka	34,878	44,661	28.0%
All India	7,86,006	8,45,451	7.6%

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MARKET NEWS

ELECTRICITY MARKET

Indian Energy Exchange, India's premier energy exchange, achieved 9147 MU overall volume, including green market trade of 230 MU, 5.15 Lac RECs (equivalent to 515 MU) and 1.06 Lac ESCerts (equivalent to 106 MU). The overall volume traded during the month increased 13% on YoY basis.

The demand momentum witnessed in August'23 continued into September '23. The country's electricity consumption increased to 140 BU during September'23, compared to 127 BU in September'22, marking a year-on-year increase of 10%. According to Grid-India, the country recorded an all-time high peak demand of 240 GW on September'01 and the highest-eversingle-day energy consumption of 5224 MU on September'02.

For the second quarter of the fiscal year 2023, IEX achieved 26533 MU resulting in 15% YoY growth across market segments.

It is noteworthy to mention that, in accordance with the CERC notification dated August 3rd, 2023, the General Network Access (GNA) regulation, Indian Electricity Grid Code (IEGC) regulations, and Transmission Charges Sharing regulations have been implemented, starting from October 1st, 2023. This notification will positively impact trading volumes in the Day-Ahead Market (DAM) on the Exchange since sellers won't be required to pay interstate transmission charges.

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DAY-AHEAD,TERM-AHEAD & REAL-TIME ELECTRICITY MARKET

The Day-Ahead Market (DAM) achieved 3467 MU volume in September'23. The average market clearing price was Rs. 6.23/ unit in September'23 as compared to Rs. 5.63/unit in September'22, an increase of 11% year-on-year basis. The DAM segment registered total volumes of 11253 MU during Q2FY'24, a marginal increase of 1.4% over Q2FY'23.

The Real-Time Electricity Market (RTM) achieved 2923 MU in September'23, registering an increase of 33% YoY. It is noteworthy to mention that IEX achieved the highest ever single day volume of 134 MUs in RTM on 4th September 2023.The RTM segment registered volume of 8201 MU during Q2FY'24, increasing 24% over Q2FY'23.

The RTM segment enables distribution utilities and industries with greater flexibility and efficient optimisation of portfolios by balancing their power demand-supply on a real-time basis.

The Term-Ahead Market (TAM) and the Day Ahead Contingency Market (DAC), comprising intra-day, contingency, daily & weekly contracts, and contracts up to 3 months, traded 1895 MU during September'23, higher by 115 % on YoY basis. The total volume on the segment during the quarter was 4605 MU, growth of 125% over Q2FY'23.

GREEN MARKET: DAY-AHEAD & TERM-AHEAD

IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved 230 MU volume during September'23. During Q2FY24, the segment achieved volume of 748 MU.

The Green Day-Ahead Market (G-DAM) achieved 140 MU volume during the month, with a weighted average price of Rs. 6.47 per unit. The segment saw participation from 192 market participants during the month. During Q2 FY'24, the segment achieved volumes of 513 MU.

The Green Term-Ahead Market (G-TAM) achieved 90 MU volume in September'23, with average monthly price of Solar- Rs. 5.69/unit and for Non-Solar- Rs. 6.74/unit and for Hydro- Rs. 6.43/unit. The G-TAM segment achieved 235 MU during Q2FY'24.

RENEWABLE ENERGY CERTIFICATE MARKET

A total of 5.15 lac RECs (equivalent to 515 MU) were cleared in the trading session at IEX held on Wednesday, 27th September, at a price of Rs. 500/REC. A total of 13.91 lac RECs (equivalent to 1391 MU) were traded during Q2FY'24. The next REC trading session at the Exchange is scheduled on Wednesday, 27th September '23.

ENERGY SAVING CERTIFICATES (ESCerts)

During September'23, 1.06 lac ESCerts (equivalent to 106 MU) were traded on IEX, at the floor price of Rs. 1840 per ESCert. A total of 2.80 lac ESCerts (equivalent to 280 MU) were traded in Q2FY'24.

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TRADE INSIGHTS SEPTEMBER 2023

CONVENTIONAL POWER MARKET

DAY-AHEAD MARKET

Price Snapshot (`/kWh)

AREA PRICES

Area

Average

Minimum

Maximum

All India

6.03

3.70

10.00

Minimum Area Price for this month refers to the average minimum price

1 MU= 1 Million kWh= 1 GWh

VOLUME

Volume	Sell Bids	Buy Bids	Unconstrained	Cleared
Volume	Volume
Total Volume	5,795.89	7,478.41	3,466.63	3,466.63
(MU)

Average Daily (MU)

249.28

193.20

115.55

115.55

PARTICIPATION

Total Registered

Participants

Open Access

Consumers

Private

Generators

7,500+

4,600+

600+

TERM-AHEAD POWER MARKET

Contracts	Total Volume (MU)	Max. Price (`/kWh)	Min. Price (`/kWh)
Intraday	4.92	10.00	4.00
Day-Ahead Contingency	758.80	10.00	1.50
Daily	543.90	10.00	7.00
Weekly	-	-	-
Monthly	596.82	10.00	7.50
Total TAM Volume		1,904.44
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