Transcript Slide 1

Development Of A Common
Platform For Electricity Trading
CERC Public Hearing
Presentation By POWERGRID
19-December-2006
Introduction
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CERC Staff Paper
– Well researched and documented
– Created Awareness
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Building blocks
– Physical growth of networks
» Interstate & Super grid
– UI and ABT
» Creation of a market
» Streamlined at the inter-state level
– STOA
– Merging of markets
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A priori to market design
– UI
– STOA
Short Term Open Access
Experience So Far & Lessons Learnt
Growth Of STOA Transactions
+ 35 %
+ 406 %
Intra & Inter Regional Transactions
(Energy MUs)
STOA - Participating Utilities
No. of Transactions:
Advance Vs Day Ahead
Approved Volume:
Advance Vs Day Ahead (MU)
Applied Energy As % Of
Approved Energy (NR)
% Utilization of Advance
Reservation (NR)
STOA Utilization In NR: Sep – Nov ‘06
(As % of Approved Energy)
STOA Utilization In WR: Apr – Oct ‘06
(As % of Approved Energy)
Load Curve & STOA
(NR) (20-10-2006)
Load Curve & STOA
(WR) (09-11-2006)
Market Structure - Generation
Market Structure - Load
STOA Experiences
An enriching experience
 95% applicants successful in getting approval
for STOA
 Single Transaction Size
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– Smallest – 1 MW
– Largest – 450 MW
Maximum transfer 2780 MW on a day
 Diversity being gainfully utilized
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STOA Experiences
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Advance Reservation
– Applications received up to 300% of available
corridor
» Pro rata allotment
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Volumes
– No. of transactions in day-ahead approx 4 times
that in advance reservations
– Energy volume in day-ahead approx 10% of that in
advance reservations
STOA Experiences
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Utilization of booked corridor
– About 70%
– Put and call options ?
– Easy exit - low cost
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Corridor availability
– Peak hours – Corridor available but low volumes
– Off peak hours – Corridor & power available
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Costlier (liquid) generation & captives under utilized
Day ahead transactions
– Serious players
STOA Experiences
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UI volumes
– Excessive reliance on UI
– Need for a cap on UI volume
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Exploding size of matrix
– Nearly 100 control areas
» Implementation of Intra-State ABT
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– 96 time blocks
Day ahead – schedules & utilization
– Frequent revisions
– Un-utilized corridors, prospective buyers/sellers available
– No show at 1500 hrs
» Getting streamlined through intervention of Honble’ Commission
STOA Experiences
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Assessment of Transfer Capability
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Weather dependent load
Monsoon dependent Hydro generation
Firmness of maintenance schedules
UI volumes – high uncertainty
Floating frequency band – line flows affected
Frequent large contingencies
TTC, ATC, FC ATC, FC SATC, TRM, CBM
STOA Experiences
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Evils of pro-rata
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Advance Booking – E-bidding being avoided
Scheduling
Curtailment on congestion
Problems of SEAMS
» Multiple regions and states affected
– Reconciliation
“If the system operator chooses such tools as pro rata
curtailment or bilateral curtailment for line loading relief, they
will interfere with economic dispatch.”
Steven Stoft, Power System Economics (3-4.5)
STOA Contracts So Far …. ?
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Advance Contracts –
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–
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Firm ?
For physical delivery ?
Forwards?
Options
» Call ?
» Put ?
“The day-ahead market is the forward market with
the greatest physical implications”
Steven Stoft, Power System Economics (3-5)
Procurement Options
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Long term contracts
– Direct
– Through traders
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Short term open access
– Direct
– Through traders
UI
 Power Exchange - Another option
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Freedom to choose from the alternatives
Four Pillars of Market Design
ELECTRICITY MARKET
IMBALANCES
CONGESTION
MANAGEMENT
ANCILLARY
SERVICES
SCHEDULING
&
DISPATCH
Sally Hunt
The Way Forward …
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Intra state ABT and STOA at state level
– Regulatory framework at state level
– Harnessing of latent generation
– Optimal use of embedded generation
– Reduce market dominance
– Intra State STOA
– Management of imbalances within states
The Way Forward …
Strengthening of network (state level)
 Indexing of the real time market price (UI
Rate)
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– Rationalization a pre-requisite for efficient
market functioning
Robust financial settlement system
 Information exchange system
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– Strong IT infrastructure
– Transparency
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Resource building
The Way Forward …
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Market rules that do not compromise with
system operator’s responsibility regarding
power quality and reliability.
“In the absence of a mature physical system
operators fight an endless losing battle”
Charles Concordia
Power Exchange
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Voluntary participation
Double sided auction
Uniform pricing
Normative transmission charges, to start
Normative transmission losses, to start
No bid caps
Robust financial settlement system
Strong IT infrastructure
Resource building
Organizational issues
“Bilateral markets provide a private
coordinating mechanism;
Exchanges provide a public, centrally
determined market price.”
“All except the real time market are financial
markets in the sense that the delivery of power is
optional and the seller’s only real obligation is
financial”
Steven Stoft, Power System Economics
Thank You