Market Mechanisms for Renewable Energy

Market Mechanisms for Renewable Energy Hyderabad I 9th February 2018

Rajesh K Mediratta Director (BD) [email protected]

For office use

2

In this Presentation • Renewable trading @ IEX • Renewable Energy Certificates • Day Ahead Market • Green Day Ahead Market

• Market Interventions for RE Integration • About IEX Day-ahead Market

3

RENEWABLE @ IEX RENEWABLE ENERGY CERTIFICATES DAY AHEAD MARKET GREEN DAY AHEAD MARKET

Options for RE Generators (Sellers)

Bundled Green Power • Discom • Feed-in-Tariffs (FiT) • Competitive Bidding • Third Party Sale to consumers

Proposed Green Market @ Exchange

Unbundled Green Power • To Discom @APPC • Third Party sale to consumers • Sell at Exchange • Captive Consumption

Sell REC @ IEX

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IEX Market Segments -Delivery-based Contractscali • •

Delivery for next day Price discovery: Closed , Double-sided Auction

Round the clock since Jul’15

• • •

Intraday: For Delivery within the same day Day Ahead Contingency: Another window for next day Gate closure : 3 hours

Term-Ahead Contracts

•

For delivery up to 11 days • Daily contracts • Weekly Contracts

• • •

Green Attributes as Certificates Sellers : RE generators not under feed in tariffs Buyers: Obligated entities; 1MWh equivalent to 1 REC

Day-Ahead Market since June,08

Intraday Market & Day-Ahead Contingency

since Sep,09

Renewable Energy Certificates since Feb,11

Energy Saving Certificates (Since 26 Sep’17)

• • •

1 EScert= 1 Mtoe( Metric Tonne Oil Equivalent) Trading Session on every Tuesday of the Week Trading time :1300 hrs to 1500 hrs

In India, all electricity contracts at the Exchange are for physical delivery No derivatives or contracts with delivery over 11 days available

N-Solar & Solar REC trade detail 32.39

30

1,500 18.90

20 10

3.65 April'17

1.0

1,000

Total Non Solar Volume-67.7 Lacs RECs 0

0

May'17

June'17

0

No. of RECs (In Lacs)

2,000

MCP(Rs/REC)

3.79

0.82

500

3.42

2.92

1.82 -

July'17

Aug'17

Sep'17

Oct'17

Nov'17

Dec'17

Jan'18

1200

Solar

0.9

REC Traded

0.8

1000

MCP (Rs/REC)

800

0.6

Total Solar Traded Volume-0.88 Lacs RECs

600

0.4

400

0.2

200

0.0 Apr'17

0

0

0

0

0

0

0

0

0

May'17

June'17

July'17

Aug'17

Sep'17

Oct'17

Nov'17

Dec'17

Jan'18

Data upto 31st Jan 2018

MCP (Rs/REC)

REC Traded

0

MCP(Rs/REC)

No of RECS (In Lacs)

40

REC Volume Cleared Non Solar

Solar

80

67.7

No. of RECs (In Lacs)

70 60 50

42.1

40 26.7

30 19.8

20 10 0

12.7

9.5 0.0 2011-12


0.1 2012-13

0.5 2013-14

14.5 1.0 2014-15

4.7 2015-16

4.0 2016-17

0.9 2017-18

An update on RECs Accredited Registered No. of No of RECs (in Cr) Capacity Capacity Projects Self Issued Traded Inventory Retained (MW) (MW) Registered Inventory upto 31st Mar 17 1.29

0.14

0.10 0.0046

2.08

0.10

1.78

4,171

2932

549

3.33

1.94

Solar

698

694

336

0.64

Total

4869

3626

885

3.97

Non -Solar

0.49

Inventory upto 31st Jan 18 4,836

3,761

735

3.77

3.02

0.14

0.60

Solar

753

733

360

0.75

0.16

0.005

0.58

Total

5589

4,494

1,095

4.52

3.19

0.14

1.18

Non -Solar

Source: REC registry India

New REC Projects Registration Trend 2500

Non Solar Capacity (MW) 2015

Solar Capacity (MW)]

Total Capacity (MW)

2000

3761

735

Solar

733

360

Total

4494

1,095

Capacity (MW)

N-Solar

1500

Total Projects

1175

1120

1000

491

500

444 320

307 192

74

62

109

828

39

0 FY 11-12

FY 12-13


FY 13-14

FY 14-15

FY 15-16

FY 16-17

FY 17-18

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RENEWABLE @ IEX RENEWABLE ENERGY CERTIFICATES DAY AHEAD MARKET GREEN DAY AHEAD MARKET

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First Solar Power Plant In Day-Ahead Market  Plant Capacity-51 MW  Price @ IEX - Rs. 3.80/u (Oct-Dec17)

• Post losses & charges Rs 3.48 • Post Deviation Charges Rs 3.43 Additional Benefit of Renewable Energy Certificates Peak day-time sale

State-MP District-Ashok Nagar Village-Bhensarwas

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DAY Ahead Market best suited for Solar

Solar Generation Profile • It follows the demand pattern • Much accurate forecast on Day ahead basis • Minimal deviation

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Monthly Prices at IEX (FY 17-18) MCP

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MCP_Solar_Profile

Seasonal Price

4.09

4.08

3.84

3.81

Price (RS/unit)

4

3

3.13

2.92

2.77

2.59 2.83

2.54 2

3.41 3.00

3.77 3.20

Dec

Jan

3.74

2.71 2.36

2.69

2.49

3.88 3.55

2.23

2.44 1

0 Apr

May


Jun

Jul

Aug

Sep

Oct

Nov

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RENEWABLE @ IEX RENEWABLE ENERGY CERTIFICATES DAY AHEAD MARKET GREEN DAY AHEAD MARKET (PROPOSAL)

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MARKET INTERVENTIONS RE INTEGRATION

Market Interventions • Liquid intra-day markets • • • • • •

Already 100% higher volume this year in intra-day markets Few States like WB, DVC, Bihar, MP, TL participating Participants to actively bid Gate Closure to be reduced to 1 hr (present 3 hours) All markets have gate closure 30% in last 5 years  High Participation: 4300+ 3800+ Industries I 47 Discoms (all) I 380+ Generators

Transparency Market Share-FY 17 (All Products) Average Daily Trade- FY17 Participation-as on 31 Mar 2017

Liquidity Competition

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Price and Volume: Bilateral vs. IEX DAM

40

Volume (BU)

4.23

25 20 15

35

36 28 4.74 3.58 3.47

12

4.34 22 3.73

IEX Price

35

29

28

4.27

4.30

34

8

35

7

34

6

28

4.13

3.46 2.89

14

Bilateral Price 40

36

35 30

Trader Volume

2.71

3.54 2.49

24

5

3.50

4

3.28

3

10

2

5

1

-

-1 FY10-11

FY11-12

FY12-13

FY13-14

FY14-15

FY15-16 FY 16-17 FY 17-18*

Prices at the Exchange always remained lower than Bilateral Contracts Source: CERC MMC Reports, *FY17- 18 till October 2017

Price (Rs./kWh)

IEX Volume

Avg Price (Rs/kWh)

Volume Lost due to Congestion lowered and price convergence in regions 8.00

6.86

6.00

4.00

3.13 3.07

2.00

South (S1) North (N2) RoI (W2) 5.11 4.73 3.79 3.23 2.79 2.77 2.58 2.55 3.07 2.52 2.46 2.29

3.23 3.18 3.16

0.00

FY13-14 FY14-15 FY15-16 FY 16-17 FY 17-18 (31 Jan’18)

2012-13 2013-14 2014-15 2015-16 Market Curtailed Cleared Curtailment Clearing Volume volume (MU) (%) Volume (MU) (MU) 34,230 28,925 5,306 15% 3,096 31,227 28,131 10% 36,210 34,067 2,144 6% 41,310 39,784 1,526 3.7% 37,825

37,561

264

2016-17

2017-18*

0.7%

With transmission augmentation, congestion has reduced and ONE NATION ONE GRID ONE PRICE achieved on over 90% days in the month of Sept-Dec

20 *FY 18-till 31st Jan’18

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Monthly Average Market Clearing Price (Rs/kWh) Avg. MCP FY16-17: Rs 2.42/kWh Avg. MCP FY17-18: Rs 3.18/kWh

4.50

4.09 4.08

4.00

3.55

3.50 3.00 2.50

2.77 2.91

3.13

2.92 2.59 2.49 2.32 2.31

2.00

3.00

3.20

2.16 2.17

2.43 2.46 2.32 2.32 2.50 2.54 2.56

1.50 1.00 0.50 0.00 Apr

May


Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

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Monthly Average Clearing Price for SR (Rs/kWh) Avg. MCP FY16-17: Rs 2.79/kWh Avg. MCP FY17-18: Rs 3.25/kWh

4.50

4.08 4.08

4.00

4.16

3.50

3.15

3.00

3.55

3.27

3.00

2.96 2.60 2.59

2.75 2.87 2.69 2.85 2.80

2.78

2.50

3.22 3.07

2.35 2.35 2.39 2.41

2.00 1.50 1.00 0.50 0.00

Apr

May


Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

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Solar , Wind Vs Market Price Trend Dec'16

Dec'17

4.34 3.46 3 2.47

Solar

2.43

Wind

2.32

IEX Price

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Landed Cost for OA Consumers at IEX Telangana

Andhra Pradesh

Karnataka

Kerala

Tamil Nadu

IEX Price

3.06

3.06

3.06

3.06

3.06

OA Charges 1

0.40

0.51

0.72

0.59

0.66

CSS

1.44

1.57

1.52

1.04

1.67

AS

0.52

-

-

-

-

Landed Cost

5.84

5.52

5.70

5.01

5.61

Energy Charges (Rs/kWh)

6.15

5.87

6.80

5.20

6.35

1Incl.

Trans. ,Wheeling & RPO

*SR Average clearing price at IEX in Feb 2018 (Upto 8th Feb)

at 33 KV (Rs/kWh)

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Telangana Discom Power Purchase/Sale 2017-18 Apr'17 May'17 June'17 Jul'17 Aug'17 Sep'17 Oct'17 Nov'17 Dec'17 Jan'18 800 608 600

0

-200

418

486

389

595

400 200

501

54 53 -1 -3

10 10 -85 -128

20 20 -96

-16 -27

-185

2 2 -521

-400 -600

80

-191

66 66 -155

-206

-170

75

80 81 -153 -164

-576

-800 Sell Unclear

Sell Clear

Total Buy : 1775 MUs

Buy Uncleared

Buy Clear

Total Sell: 1218 MUs

Buy Bid

Sell Bid

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