Power exchange plans to launch real time market for trading in electricity contracts

Our Bureau Mumbai | Updated on May 28, 2020

PXIL’s RTM is designed as a half-hourly market, comprising of 48 auction sessions of 15-minute duration each

From June, Power Exchange India Ltd (PXIL), promoted by the NSE and the NCDEX, would be launching the Real Time Market (RTM) for trading in electricity contracts.

This move is expected to aid Discoms as well as both conventional and renewable generators a market-based platform to manage their power requirements in a planned, efficient and transparent manner.

The RTM provided by PXIL would ensure that buyers and sellers can purchase or sell electricity from anywhere across the country with just one hour’s prior notice, PXIL said in a statement. The entire transaction would be online and accessible from any corner of the country.

RTM trading platform can be accessed through its portal PRATYAY. Globally, energy exchanges are used as price discovery mechanisms between those who produce it and those who consume it.

Prabhajit Kumar Sarkar, MD & CEO of PXIL, said: “PXIL’s RTM would be a game changer in the electricity market as it, for the first time, allows power generators with even long-term PPAs to participate in the country’s power market.”

Other key advantages for discoms include flexibility to meet their dynamically varying schedule with delivery of power within an hour of the closure of bid session and an opportunity for largescale integration of renewable energy to its mix.

Double-sided closed-bid auction

PXIL’s RTM is designed as a half-hourly market, comprising of 48 auction sessions of 15-minute duration each. The auction sessions would be conducted during even time blocks of the hour with delivery to commence from one hour after the closure of trade session. The RTM provides double-sided closed-bid auction with uniform market clearing price, company officials said.

Participants in the RTM are allowed to place orders for all time blocks of the upcoming hours of the day in advance. However, the matching of placed orders shall be considered for clearing as per the specified time blocks, PXIL said.

The maximum price quote for RTM proposed will be limited to ₹8 per unit and the minimum price quote will be limited to ₹0 per unit. Also, negative price quotes can be introduced with a minimum price quote of (minus ₹3) per unit, and individual block bids of 25 MW, without any restriction on the number of block bids can be placed.

Flexible pricing

For the power generators, one of the key advantages include flexibility in pricing. Generating companies otherwise tied up to long-term PPAs can also access the power market through RTM for transacting their un-requisitioned surpluses. Till this point no other market mechanism allowed the generating companies to do so. Power generators with untied capacity have the opportunity to sell power by participating in a RTM session, one hour prior to starting of the delivery.

Already, power utilities in Maharashtra are turning to energy exchanges to buy cheaper power to protect margins, due to the fact that some PPAs command higher tariffs.

Further, this would also allow renewable energy generators, who may have unanticipated surpluses to sell such supply and earn revenues and in turn obtain Renewable Energy Certificates (RECs) as well. Additionally, RE and hydro generators can also offer unanticipated surpluses in the market. This market on PXIL also has the provision for generators who may have faced a forced outage, to purchase power and fulfil their contractual commitments.

Power generators also have an option to purchase power in RTM, in the case of forced outage of a unit.

Published on May 28, 2020

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