Power exchanges to begin extended market session from Monday

24x7 product offering to help mitigate contingency need of market players

In a major order, the Central Electricity Regulatory Commission (CERC) has allowed Indian Energy Exchange Ltd (IEXL) and Power Exchange India Ltd (PXIL) to operationalise the extended market session from Monday. Currently, at IEX, the intra-day market session is open from 1,000 hours to 1,700 hours, which will be changed to 0030-2000 hours. In case of PXIL, the intra-day market session at present is open from 0800 hours to 2000 hours, which will now be revised to 0000-2400 hours.

Both exchanges currently trade day ahead, term ahead products and renewable energy certificates (RECs). They believe that due to the extension of time, the market players will be able to mitigate their contingency requirements. Both the exchanges have submitted amendments to their respective bylaws and business rules to operationalise the extended market session.

IEXL clocks a daily turnover of about 85 million units (MUs) compared to PXIL’s 10 MUs. IEXL director (business development) Rajesh Mediratta said, “Extended market for round-the-clock transactions is one of the key developments in the past five years. It will help distribution companies and generators manage and balance their systems better. This will help large-scale integration of wind and solar capacities as envisaged by the government.”
 

PXIL managing director and Chief executive officer MG Raoot told Business Standard ''The 24x7 product will help in a great way to manage the contingency requirements of market players under strict demand side management. This product is on a bilateral basis wherein the sellers and buyers will come on the exchange platform and mitigate their needs."

CERC in its order said the existing products for day ahead contingency and intra day markets would continue to be operated by the exchanges. However, as a principle, the timeline for these products is being extended so that trading window is open for same day delivery ( up to 2400 hours) and next day deliver (0000-2400 hours). In case of same day delivery, the trading window will now be opened round the clock for delivery of power on the same day (minimum delivery period  - 3 hours after contract execution subject to corridor availability). For next day delivery, the trading window will be opened after declaration of day ahead results and will remain open till end of day.

PXIL in its submission to CERC said it has proposed  to  increase  the pre-bid margin  from 100% to 105% to cover the statutory charges including transmission charges, operating charges in view of banking hour restrictions.

On  the other hand, IEXL has proposed to change provision with regard to ''Funds pay in by Members.'' To facilitate transactions executed beyond banking hours, IEX  has proposed to debit/adjust the funds pay-in on the next day of trading from buyers, members/ clients as applicable. It also plans to refund excess margins to the member, if any due to partial concurrence received on the settlement day.