Power Trading in India

Providing power for the millions
SADDAM HUSSAIN QAZI 2ND YEAR M.B.A JKSHIM, NITTE
Overview Indian
Power market Demand and supply scenario Market Regulator Power Exchanges Dominant players in Power Trading Pricing Model Settlement of Contracts Key Issues Conclusion
Worlds 6th Largest Energy Consumer Relying on Coal and Thermal power plants 3rd largest producer of Coal in the world. Long Experienced Capacity shortfalls, Voltage Fluctuations
As a Major Impediment to Economic Growth. Captive customers versus monopoly suppliers.
Electricity act 2003, Trading is defined as

PURCHASE OF ELECTRICITY FOR SALE THERE OF
Power trading was started in year 1996 in New York. Power trading has 2 main components Physical Trading Financial Trading
Evolving stage and volume of exchanges are not huge CGSs, IPPs, SEBs Indias Electricity sector dominated by the SEBs Transactions are through spot contracts, forward and futures contracts
SOURCE ; DATA MONITOR
Electricity cannot be stored. Irrational tariff policy A widening gap between the cost of generation and average realizations. Countrys economic growth depends on a viable power sector. Power cuts and additional power requirement
Sixth largest consumer of electricity. The Indian electricity market grew by 21.5% in 2009 to reach a value of $104.9 billion and a forecast to have a value of $281.2 billion, an increase of 168.1% in 2014.
Industry is the largest segment of the electricity market in India, accounting for 60.3% of the market's total value and 16.2% of the Asia-Pacific electricity market value.
National Thermal Power Corporation is the leading player in the Indian electricity market, generating a 26.6% share of the market's volume.
Year 2005 2006 2007 2008 2009
$ billion 48.7 57.9 71.5 86.3 104.9
Rs. billion 2,376.6 2,830.2 3,495.2 4,217.7 5,123.9
% Growth 19.1% 23.5% 20.7% 21.5% 21.2%

Source: Datamonitor
CAGR: 200509
Primary commercial energy demand grew by 6% between 1981 to 2001. India ranks 5th in terms of Primary commercial energy consumption amounting to 3.5% of world commercial energy demand. Despite increasing dependency on commercial fuels a huge quantity (40% of total energy requirement)is met by non commercial energy resources in rural areas but this trend is changing steadily. The supply side has not been able to meet the demand side. Use of solar can meet demand to some extent.
MMC Set up in 2008. Objectives To observe trends in volume and price To analyze competition to disclose all relevant information First institutional promoter power
exchange Promoted by: NSEIL, NCDEX
Bid Accumulation Period( Bidding phase) (10.00am to 12 noon Auction Period Price Determination Process : MCV, MCP Price Determination Process (final): (2.00pm) NLDC Settlement: (3.00 pm)
Pioneers of electricity generation in India Power generating capacity of 2365 MW, Countrys largest private sector power utility Generation units in Maharashtra, Jharkhand, Delhi and Karnataka Pursuing opportunities to trade with Bangladesh, Nepal, Sri-lank etc
India's largest player generating a 26.6% share of the market's volume, Set up in 1975 to accelerate power development in India. Current installed capacity of 34,854 MW, NTPC plans to invest 1lakh Crs. in hydro power project
Indias largest integrated private sector power utility company, Generating a 4.3% share of the market's volume.
Reliance Energy is into generation, Transmission, Distribution, and Trading of power. Also an investor in infrastructure projects
Traded through

Bids to buy; sales, Through offers to sell, and Short term trades generally in the form of financial or obligation swaps.
Power: Metered net electrical transfer rate at any given moment of time. Measured in megawatts(MW)
Energy: Electricity that flows through metered point for a given period. Measured in megawatts hour(MWh)
Chapter 1 General Provisions Chapter 2 Commercial Parties and Registration Chapter 3 Contracts Chapter 4 Metering Chapter 5 Balancing Mechanism
SEBs are on the brink of bankruptcy. Tariffs havent hiked for close to half a decade Shortage of coal to fuel the increasing no. of power projects Lack of infrastructural development required to attract FDI
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Power Trading in India

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Providing power for the millions

SADDAM HUSSAIN QAZI 2ND YEAR M.B.A JKSHIM, NITTE

As a Major Impediment to Economic Growth. Captive customers versus monopoly suppliers.

Electricity act 2003, Trading is defined as

SOURCE ; DATA MONITOR

Year 2005 2006 2007 2008 2009

$ billion 48.7 57.9 71.5 86.3 104.9

Rs. billion 2,376.6 2,830.2 3,495.2 4,217.7 5,123.9

% Growth 19.1% 23.5% 20.7% 21.5% 21.2%

exchange Promoted by: NSEIL, NCDEX

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