Transcript www.irenex.ir

Presented By:
Ali Namaki
The Head Of R&D And Risk Analysis Department
Mohammad Hossein Asgari
The Head Of Market Operation Department
IRENEX INTRODUCING
BEING THE PRICE DISCOVERY
REFERENCE FOR ENERGY
CARRIERS IN THE MIDDLE EAST
REGION
was founded in 2012
4th formal exchange of Iran
all energy carriers
electric power
Tradable commodity's
oil
…
natural gas
derivatives
physical futures
…
QUESTIONS ?
What is the energy commodity??
What is the energy exchange??
what dose energy carrier mean??
ENERGY & EX-ENERGY
IRAN ENERGY EXCHANGE
IRENEX MARKETS CATEGORIZED
Market
Tableau
ELECTRIC POWER
PHYSICAL MARKET
OIL AND GAS
OTHER ENERGY CARRIERS
Standard parallel salaf
DERIVATIVES MARKETS
COMMODITY FUTURE CONTRACT
COMMODITY OPTION
SUBSIDIARY MARKET
IRENEX MISSION & VISION
CREATE AND DEVELOPMENT OF A CLEAR AND EFFICIENT
MARKET WITH HIGH DEGREE OF LIQUIDITY AND
COMPETITIVENESS FOR JUSTLY PRICE DISCOVERY OF
ENERGY CARRIERS
IRENEX GOALS
ADVANTAGE OF ENERGY EXCHANGE
1 Creation and development of an appropriate framework for trading the
energy carriers, such as oil, gas, electricity, coal and etc.
2. Providing a reliable price reference for the energy carriers.
3. Reducing the transaction costs and providing clearing and settlement
services.
4. Eliminating the monopoly, establishing transparent pricing system
5. Reducing the market risk through the creation of financial instruments
based on the energy carriers such as futures and option contracts
6. Enhancing competition in the market through continues interaction
between buyers and sellers
ADVANTAGE OF ENERGY EXCHANGE
7.enhancing the market transparency
8. Providing a suitable situation for joining into the international markets and establishing
the possibility of unilateral and multilateral transactions. .
9. Getting sufficient experience and academic ability to participate in the international and
regional markets
10.enhancing the investment opportunities.
IRENEX & ISLAMIC FINANCE
AS THE ISLAMIC STRUCTURE OF THE IRAN’S CAPITAL
MARKET, THE ENERGY EXCHANGE HAS TRIED TO
IMPLEMENT THE ISLAMIC RULES AND REGULATIONS
IN ITS TRADING’S.
STANDARD PARALLEL SALAF
standard parallel salaf
special designed type of forward contract
complied with the Shariah rules
real goods
increase the liquidity of the contract
can be traded before the delivery date
THE HISTORY OF POWER INDUSTRY IN THE WORLD
For most of the last century, irrespective of ownership and
the level of vertical integration, geographical monopolies
were the norm in the power industry.
In the nineteen eighties, some economists started arguing
that this model had run its course. They said that the
monopoly status of the electric utilities removed the
incentive to operate efficiently and encouraged
unnecessary investments.
The idea of creation of power markets and power
exchanges was first discussed in the 1980s..
FACTS & FIGURES OF IRANIAN’S POWER INDUSTRY
Electricity sector in the Islamic Republic of Iran
installed capacity
68000 MW
high-voltage transmission
114000 km
sub transmission
372000 km medium-voltage distribution network
27.15 million consumers
total sales of electricity
183905 GWh in 2011
Consumers (total sales)
industrial consumers
residential consumers
commercial consumers
agriculture consumers
others
FACTS & FIGURES OF IRANIAN’S POWER INDUSTRY
Electricity sector in the Islamic Republic of Iran
Annual per capita installed capacity
866 Watt
Annual per capita generation
3190 kWh
Average consumption of a typical
residential consumer
2099 kWh
Annual peak demand growth rate
10% (one of the highest rates in the world)
WHY RESTRUCTURING?
•
•
•
•
•
•
•
•
•
Reduction the duty of the government.
Clarification and separation of costs.
Provision of just and fair competitive environment.
Improvement of productivity.
Option to select for end user.
Provision essential facilities for direct trade.
Incentives for attraction of the private sector.
Development of managerial potential.
Development of the domestic capacities
RESTRUCTURING STEPS & DIRECTIONS
The power
sector in Iran
Ownership
transfer
unbundled
generation
transmission
distribution
retail trading
RESTRUCTURING STEPS & DIRECTIONS
IRAN’S POWER MARKET
Power market was launched 23 October 2003
providing just and fair competition atmosphere
providing indiscriminate access of market participants
IRAN GRID MANAGEMENT CO. (IGMC)
was formed in 2004
Independent System Operator (ISO)
System operator (SO)
that evaluates and acquires required ancillary services, conducts
transmission girds, integrates schedule
Market Operator (MO)
administrates financial transactions
organizes information of transactions
THE MOST SIGNIFICANT FEATURES OF IRAN’S
ELECTRICITY MARKET
Current & Future view of Electricity Market & Power Exchange
Current interaction among Market players
Import
Suppliers
Other Genco
BOO ،BOT Genco
Tavanir
Private
Genco
REC/WRC
Electricity Market
Buyers
Tavanir
REC
Disco
Export
HV Consumer
LV Consumer
DG
IRENEX POWER TABLEAU
The main reasons which justify the establishment ELECTRIC POWER
Tableau of energy exchange in Iran are as follows:
law requirements for establishing of the power exchange,
some problems in cash payments to power plants,
impossibility of financing producers in the current electricity
market,
impossibility of selling electricity in different time horizons,
inability to cover (hedge) the risk of price change for the
producers and consumers,
consumers inability to purchase electricity for different time
horizons
POWER PARALLEL SALAF (PPS)
Power parallel Salaf was the first derivative
contract which was accepted in the Energy
Exchange Listing Council.
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
underlying asset
• Power package (Real Power) equivalent
to one “MWh” in each hour of the
“Consumption Period” in the “Delivery
Period”.
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
Sellers and Buyers
•Currently,t he initial suppliers of these contracts are
generation companies or power plants and real
consumers (such as Discos, Retailers and large
consumers) are buyers of these contracts.
Investors
Supplier
Guaranteed
contract
Future ،CFD ،Option
Contracts , Derivatives
Cash flow
Market
PX
under SEC supervision
IGMC
Export
BOT ،BOO Genco
Import
REC
HV
Consumer
Disco
LV
Consumer
Retailer
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
Consumption Period
•Based on the load curve (consumption
regime) in Iran’s power system, PPS
contracts can be categorized as base load
(24 hours of a day), low load (8 hours of a
day), medium load (12 hours of a day) and
peak load (4 hours of a day)
contracts.These periods specify the
“Consumption Period” of contracts.
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
Consumption Period name
Number of hours
BASE LOAD
24 hours a day Starting from 00:00 to 24:00 According to official time
PEAK LOAD
4 hours a day. Start and end time of Peak Load in each Delivery Period According
to Declaration of the IGMC
MEDIUM LOAD
12 hours a day. Start and end time of Medium Load in each Delivery Period
According to Declaration of the IGMC
LOW LOAD
8 hours a day. Start and end time of Low Load in each Delivery Period According to
Declaration of the IGMC
Peak, Medium& Low Load Time table for 2013
hour
January
February
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
L
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
11
M
M
M
M
M
M
M
M
M
M
M
M
12
M
M
M
M
M
M
M
M
M
M
M
M
13
M
M
M
M
M
M
M
M
M
M
M
M
14
M
M
M
M
M
M
M
M
M
M
M
M
15
M
M
P
P
P
M
M
M
M
M
M
M
16
M
M
M
M
M
M
M
M
M
M
M
M
17
M
M
M
M
M
M
M
M
M
M
M
M
18
M
M
M
M
M
M
P
P
P
P
M
M
19
M
M
M
M
M
M
P
P
P
P
P
P
20
P
P
M
M
M
P
P
P
P
P
P
P
21
P
P
P
P
P
P
P
P
P
P
P
P
22
P
P
P
P
P
P
M
M
M
M
P
P
23
P
P
P
P
P
P
M
M
M
M
M
M
24
M
M
M
M
M
M
M
M
M
M
M
M
March
April
May
June
July
August
September
October
November
December
1
L
M
M
M
M
M
L
L
L
2
L
L
L
L
L
L
L
L
3
L
L
L
L
L
L
L
4
L
L
L
L
L
L
5
L
L
L
L
L
6
L
L
L
L
7
L
L
L
8
L
L
9
M
10
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
Delivery Period
• these contracts can be also divided to daily,
weekly, monthly, quarterly and yearly contracts.
Buy Limit (Cap)
•There is also some Buy Limit (Cap) for each
consumer
Transaction Steps
•Pre-opening, opening and continuous trading are
three different steps of the transaction mechanism
of PPSs.
POWER PARALLEL SALAF (PPS)
CONTRACT SPECIFICATION
Physical Delivery
• Due to the current specification of Power
Parallel Salaf (PPS), all contracts in their
maturity periods are settled physically so
the cash settlement is not possible.
Pre-payment
•buyers should pay all the transaction values
in advance.
POWER PARALLEL SALAF (PPS)
each contract has a unique trading symbol
DAP00 PFB EXM910901
DAP00◌ PF□ EX◊○○○○○○
DAP00
standard parallel salaf of Electricity in Given”
Consumption Period ” & Specified” Delivery
Period”
PFB
EXM910901
Headline
Title
Symbol
Consumption
Period
Base Load
Peak Load
Medium Load
B
P
M
Low Load
L
Day
Week
Month
Season
Year
D
W
M
S
Y
□
Delivery Period
◊
Start date of
delivery ○○○○○○
○○
Start year of delivery
○○
Start month of delivery
Number From 01-12
Start day of delivery
Number From 01-31
○○
Number From 00-99
POWER PARALLEL SALAF (PPS)
Daily, weekly and monthly PPS trading symbols
are opened thirty days prior to the beginning of
the delivery period and will be closed three days
before the beginning of the Delivery Period. In this
time, the information of all approved transactions
is sent to IGMC for managing the physical delivery.
CONTRACT SPECIFICATION
No
1
2
3
Title
Description
UNDERLYING ASSET
Power package (Real Power) equivalent one “MWh “
in each hour of the “Consumption Period” in the
“Delivery Period”
SPECIFICATIONS OF
UNDERLYING ASSET
50± ./2 Hz (The nominal frequency of Iran’s National
Power Grid) and Standard Voltage levels of Iran’s
National Power Grid National Power Grid
NAME AND SPECIFICATIONS
OF PRIMARY SUPPLIERS
All listed suppliers in IRENEX (According to the
IRENEX Customer’s listing procedure)
No
Title
4
CONSUMPTION PERIOD
5
DELIVERY PERIOD
6
CONTRACT SIZE
7
TRADING SYMBOL
8
METHOD OF INITIAL PUBLIC
OFFERING (IPO)
9
INITIAL PUBLIC OFFERING PERIOD (IPO)
Description
The number of consumption hours in each day of the delivery period
The number of days of the delivery period
The number of power packages (electrical energy) in each contract which is
equivalent to the number of hours of the “consumption period” multiplied by
the number of days in the “delivery period”
A unique symbol for each contract
Single price auction
The day of opening of the trading symbol
No
Title
Description
From the opening of each Trading Symbol till 3 days before
the beginning of the Delivery Period
10
Trading Period of Contract
11
Contract Maturity
12
Place of delivery
Iran’s National Power Grid
13
Currency
I. R. Rial
14
Tick Size
10 Rials
15
Transaction Fees and Commissions
According to the approved fees by Iran’s Securities and
Exchange Organization (SEO)
The end of the Delivery Period
No
Title
Description
Customers with Special Transaction Code (Connected to Transmission
and Sub-Transmission power system): According to the announced
data of IGMC (Iranian Power System Operator)
16
Customers with Public Transaction Code (Connected to Distribution
Buy Limit (Cap) of each Customer power system): According to the announced data of Regional
Distribution Company
Distribution/Retailing License for Distribution Companies (DISCOs)
and Retailing companies (RETAILCOs)
17
The requirements for Physical
delivery
The Electrical Connection Contract and the last issued bill by the
regional power supplier for End-Users
18
Daily Price Limit
Without Limit
19
Prepayment
20
Trading Hours
100% of the value of each contract
9:30 to 10:00 A.M. Pre-Opening
10:00 to 12:00A.M. Continuous trading
Thanks