No. IEX/BD/1540/16-17
To,
The Secretary,
Central Electricity Regulatory
3rd & 4th Floor, Chanderlok Buil
36, Janpath
New Delhi -110001
"'N teLm....)
.INDIAN ENERGY EXCHANGE
India's No.1 Power Exchange
Date: 21.09.2016
Subject: Petition under Section 66 of The Electricity Act, 2003 read with the Regulation 7 of the
Central Electricity Regulatory Commission (Power Market) Regulations, 2010 for
approval of introduction of the Green Power (Renewable Energy) Contracts at Indian
Energy Exchange Ltd.
Dear Madam,
With reference to subject matter Petition, following documents pertaining to online
submission of Petition on 21.09.2016 is enclosed:
a. Diary Acknowledgement
b. Petition Summary
c. Form-I (Payment Related Report)
In addition to above, Ten copies (One original and 9 copies) of the Petition on the subject matter
are enclosed for records of the Hon'ble Commission.
Yours faithfully,
k4,44-07
V itg pr;p id.ent
(Regulatory Affairs & Communication)
Encl: As above
www.iexindia.com
Indian Energy Exchange Ltd Registered & Corporate Office: Fourth Floor, Plot No.7, TDI Centre, District Centre, Jasola, New Delhi - 1 10025, India.
Tel No.: +91-1 1-4300 4000 I Fax No.: +91-1 1-4300 4015
CIN: U74999DL2007PLC277039
BEFORE THE CENTRAL ELECTRICITY
REGULATORY COMMISSION
3RD& 4TH FLOOR, CHANDRALOK BUILDING,
36, JANPATH, NEW DELHI — 110 001
PETITION NO. /MP/ 2016
IN THE MATTER OF:
Petition under Section 66 of The Electricity Act, 2003
read with the Regulation 7 of the Central Electricity
Regulatory Commission (Power Market) Regulations,
2010 for approval of introduction of the Green Power
(Renewable Energy) Contracts at Indian Energy
Exchange Ltd.
And
IN THE MATTER OF:
Indian Energy Exchange Limited ...Petitioner
INDEX
Sl. No. Particulars Page No.
1. Petition 1
2. Affidavit .0, --....
32
For INDIAN ENERGY'EXCHANGE LIMITED
At: New Delhi
Dated: This 21" day of September, 2016
BEFORE THE CENTRAL ELECTRICITY
REGULATORY COMMISSION
3RD& 4TH FLOOR, CHANDRALOK BUILDING,
36, JANPATH, NEW DELHI — 110 001
PETITION NO. /MP/ 2016
IN THE MATTER OF:
Petition under Section 66 of The Electricity Act, 2003
read with the Regulation 7 of the Central Electricity
Regulatory Commission (Power Market) Regulations,
2010 for approval of introduction of the Green Power
(Renewable Energy) Contracts at Indian Energy
Exchange Ltd.
And
IN THE MATTER OF:
Indian Energy Exchange Limited,
4th Floor, TDI Centre,
Plot No. 7, Jasola,
New Delhi 110 025 ...Petitioner
MOST RESPECTFULLY SHOWETH
1. The Indian Energy Exchange Limited (hereinafter
referred to as the "IEX" or as the "Exchange"), is a
1
0..c PAY F2
+ App. sy. (..,.. Govt. of India ‘ I
* Regd. NO.7717 Area- Deihl
(P Jells Extd • Whose India e
arayan
company incorporated under the provisions of the
Companies Act, 1956 and having its registered office
at 4th Floor, TDI Centre, Plot No. 7, Jasola, New
Delhi 110 025.
2. The Honorable Central Electricity Regulatory
Commission (hereinafter referred to as "Hon'ble
Commission") was pleased to grant permission to the
IEX to set up, operate and commence exchange
operations by its orders dated 31.8.2007 and 9.6.2008.
That IEX has been in operation since 27.06.2008.
3. By way of the present Petition, the Petitioner herein
seeks approval of this Hon'ble Commission to
introduce Green Power (Renewable Energy) Contracts
on its platform.
2
BACKGROUND
4. It is submitted that, IEX is presently operating Day
Ahead Market (DAM) and Term Ahead Market
(TAM) in electricity segment and Renewable Energy
Certificate (REC) Market in accordance with the
relevant rules, regulations and approvals of this
Honorable Commission. In particular, electricity
transactions on Power Exchange are governed by
Power Market Regulations and Open Access
Regulations and Procedure thereof.
5. The Exchange has provided flexibility to participants
by offering diversified products to trade in electricity.
IEX commenced its operation by introducing Day
Ahead Market (DAM) allowing participants to
procure power for the following day. Subsequently, it
offered four products in the Term Ahead Market
(TAM) segment, helping participants manage their
3
power needs up to 11 days in advance. The Exchange
is also aiding the obligated entities in accomplishing
the RPO (Renewable Purchase Obligation) by
providing the platform for trading of RECs
(Renewable Energy Certificates).
6. Since the last eight (8) years, IEX has been
successfully providing a transparent, demutualized
and automated platform enabling competition,
efficient price discovery and counter party risk
management for its participants in DAM and TAM
markets.
7. To give thrust to Renewable Energy in the Country,
the Government of India (GoI) has set a target of
175GW of installed capacity of Renewable Energy
(`RE') by 2022 comprising major share of Solar
(100GW) and Wind (60GW).
4
8. It is submitted that by the end of the 12th Plan i.e.
Year 2017, the RE installed capacity is expected to
increase to about 46,000 MW of Wind and about
10,000 MW of Solar (Green Energy Corridor Report).
Further, large solar generation capacity addition to the
tune of 20,000 MW and more is expected by 2019 and
this would comprise of large Solar Parks of size upto
1000 MW and Ultra Mega Solar Projects of 4000 MW
each (as per the decisions of the Union Cabinet, Dec
2014).
9. Taking into consideration above aspects and to
facilitate integration of renewable energy (RE)
generation in the grid, Hon'ble Commission has
already established a framework for forecasting,
scheduling and handling deviations from schedule for
the infirm RE generation (like wind and solar). To
operationalize this framework, Hon'ble Commission
5
has already notified Central Electricity Regulatory
Commission (Indian Electricity Grid Code) (Third
Amendment) Regulations, 2015 and Central
Electricity Regulatory Commission (Deviation
Settlement Mechanism and related matters) (Second
Amendment) Regulations, 2015 on 07.08.2015.
10.The Honorable Commission has resolved issues
involved in scheduling and deviations settlement of
Renewable Energy by establishing the new
framework wherein special dispensation has been
given to the RE generators (Solar and Wind) by
providing on one hand separate deviation charges and
on the other hand providing for balancing of deemed
Renewable Purchase Obligation (RPO) compliance of
buyers with respect to schedule through RECs.
Relevant provisions of new framework are extracted
below for ready reference:
6
(i) Central Electricity Regulatory Commission
(Deviation Settlement Mechanism and related
matters) (Second Amendment) Regulations,
2015:
"5. Charges for Deviations:
(v) The wind or solar generators which are
regional entities shall be paid as per
schedule. In the event of actual generation
being less than the scheduled generation,
the deviation charges for shortfall in
generation shall be payable by such wind or
solar generator to the Regional DSM Pool
as given in Table —1 below:
(vi) The wind or solar generators which are
regional entities shall be paid as per
7
schedule. In the event of the actual
generation being more than the scheduled
generation, the Deviation Charges for
excess generation shall be payable to the
wind or solar generators which are regional
entities from the Regional DSM Pool as
given in Table — II below:
(vii) In reference to clauses (v) and (vi) of
this Regulation, for balancing of deemed
renewable purchase obligation (RPO)
compliance of buyers with respect to
schedule, deviations by all wind and solar
generators which are regional entities shall
first be netted off for the entire pool on a
monthly basis and any remaining shortfall
in renewable energy generation must be
balanced through purchase of equivalent
solar and non-solar Renewable Energy
Certificates (RECs), as the case may be, by
NLDC by utilising funds from the Pool
Account. For positive balance of renewable
energy generation, equivalent notional
RECs shall be credited to the DSM Pool and
carried forward for settlement in
future. "(emphasis added)
11.Further, in IEGC it has already been clarified by the
Honorable Commission that revision in schedule is
not permissible in case of collective transactions.
Relevant provisions IEGC is extracted below:
(i) Central Electricity Regulatory Commission
(Indian Electricity Grid Code) (Third
Amendment) Regulations, 2015:
9
"6.5 Scheduling and Despatch procedure
for long-term access, Medium — term and
short-term open access
23 . Special dispensation for scheduling of
wind and solar generation
(iii) The schedule by wind and solar
generators which are regional entities
(excluding collective transactions) may be
revised by giving advance notice to the
concerned RLDC, as the case may be. Such
revisions shall be effective from 4th time
block, the first being the time-block in which
notice was given. There may be one revision
for each time slot of one and half hours
starting from 00:00 hours of a particular
day subject to maximum of 16 revisions
during the day." (emphasis added)
12.It is submitted that Ministry of New and Renewable
Energy (MNRE), GoI has hosted a report on its
website on "Market Design for Renewable Energy
Grid Integration in India" published by 'Deutsche
Gesellschaft fir Internationale Zusammenarbeit
GmbH' or `GIZ' wherein inter-alia it is recommended
that for higher share RE scenario, market driven
mechanism is imperative to off-take RE. The report
even goes further to the extent that in long run 100%
power should be traded on Power Exchanges.
Relevant excerpts of the report are reproduced below:
"Off-take of RE power is still a challenge due to its
price competitiveness with conventional sources of
power. RPOs, Feed in tariff, competitive bidding,
tax policy and many other policy, fiscal and
11
regulatory interventions are providing impetus to
facilitate off take of RE. However, in future would
such intervention still facilitate off take of
additional large shares of RE generation such
solar and wind into the grid Hence, it is
imperative to develop a market driven mechanism
in addition to regulatory interventions in order to
foster higher shares of renewables into the grid."
13.It is submitted that with the introduction of Ancillary
Services by this Hon'ble Commission and ample
liquidity in Day Ahead Market (DAM) at IEX, there
are enough tools available to cater variability of
Renewable Energy injected into the grid.
14.In the backdrop of aforesaid developments, IEX
submits that time is now appropriate time to introduce
exclusive Exchange based contracts for trade in
12
renewable energy to provide avenues to existing and
perspective RE Generators for sale of Renewable
Energy through Exchange platform and to provide
more options to Obligated Entities to fulfill their
Renewable Purchase Obligations (RPO).
FRAMEWORK OF GREEN CONTRACTS ON
POWER EXCHANGE:
15.To facilitate the aforementioned objectives and
considering CERC framework for forecasting,
scheduling and handling deviations from schedule for
the infirm RE generation and considering better
forecasting and scheduling of renewable power on day
ahead basis, by this Petition, IEX proposes to
introduce following new contracts (on similar lines
with existing contracts) in Green Power Market
Segment on its platform:
13
(i) Green Day Ahead Market (G-DAM)(based on
collective transactions):
1) Solar Day Ahead Contract
2) Non-Solar Day Ahead Contract
16. Framework of the proposed contracts in Green
Day Ahead Market (G-DAM):
(i) The overall framework of the proposed G-
DAM is based on the existing framework in
DAM and on the premise that :
1) RE Sellers/Buyers can participate in G-
DAM and subsequently in existing DAM
if their bid in G-DAM is not cleared or
cleared partially by way of bidding their
unsuccessful bids in DAM. Further, in
case RE Seller (whose bid is not cleared
fully or partially) participating in DAM
will amount to selling of Renewable
14
Energy at market determined price
therefore as per `CERC (Terms and
Conditions for Recognition and Issuance
of Renewable Energy Certificate for
Renewable Energy Generation)
Regulations, 2010' such RE Seller will
get equivalent amount of RECs in lieu of
bid cleared in DAM.
2) Buyers procuring power in G-DAM shall
be eligible to fulfill their respective RPO
compliance by participating in
Solar/Non-Solar Day Ahead Contracts.
(ii) Eligibility of Participation:
1) Solar Energy sellers shall be eligible to
trade in 'Solar Day Ahead Contract' and
15
Non-Solar RE Seller shall be eligible to
trade in 'Non-Solar Day Ahead
Contract'.
2) RE Seller having merchant green power
capacity shall be eligible to participate in
G-DAM subject to applicable
Regulations notified by Appropriate
Commission.
3) RE sellers who are under the purview of
CERC DSM Regulations i.e. who are
eligible to settle with buyers on
scheduled energy (not actual energy) and
deviation settlement of RE generators
through purchase of RECs, can
participate in G-DAM. The RE sellers
situated in State where SERC has
adopted same framework, shall also be
eligible to participate in G-DAM.
4) All the entities which are eligible to
procure power through Open Access
shall be eligible to participate in G-DAM
as buyer.
5) Buyers will be eligible to participate in
the G-DAM based on the same NoC
issued for DAM/Intra-Day market by
SLDC.
6) Eligibility of RE sellers shall be
ascertained at the time of registration at
the Exchange based on NOC/Standing
clearance issued by RLDC/SLDC, as
applicable.
17
(iii) Risk Management: As per existing practice of
Electricity Day Ahead Market.
(iv) Bidding mechanism: Double-sided closed bid
Auction.
(v) Price Discovery methodology: Uniform market
clearing price for all buyers and sellers who are
cleared.
(vi) Auction Timing : 08:00 AM to 09:00 AM of
previous day (D-1)
(vii) Scheduling: As per procedure of scheduling of
Collective transactions. No revision of schedule
will be permissible.
18
(viii) Delivery: Next day (T+1) from 0000 Hrs to
2400 Hrs in 96 separate 15 min time blocks.
(ix) Delivery Point: At Regional Periphery.
(x) Transmission Congestion management: As per
existing practice of market splitting in
Electricity Day Ahead Market.
(xi) Deviation Settlement Mechanism: As per
applicable Regulations notified by Appropriate
Commission.
(xii) Allocation of Available Transmission
Capability (ATC) by NLDC:
1) As per availability of ATC at the time of
Request.
19
2) Solar to be given priority followed by
Non-Solar or as may be decided by the
Hon'ble Commission.
3) Pro-rata basis between the two
Exchanges.
(xiii) Proposed timelines: Since G-DAM is a new
segment and considering basic framework of
the proposed G-DAM mentioned in point no. (i)
above, it is essential to devise a timeline of
various activities during the day different from
existing DAM timelines. Accordingly, IEX
proposes following timelines for G-DAM
activities during the a trading day:
20
S. No. SESSIONS G-DAM
1. Bid - Call session 08.00 AM -09.00 AM
2. Determination of MCP/MCV By 09.30 AM
3 Publish of Provisional Obligation By 09.45 AM
4.
Request of ATC to NLDC, Request for
confirmation from bank on availability
of funds
By 10.00 AM
5.
NLDC Exception for scheduling,
Receipt of confirmation from bank on
availability of funds
By 10.45 AM
6. Determination of ACP/ACV By 11.15 AM
7. Publish of Final Obligation By 11.30 AM
8'
Submission of Application for
scheduling to NLDC By 12.00 PM
9'
NLDC sends scheduling request to
RLDCs By 1.00 PM
10'
RLDC acceptance of scheduling to
NLDC By 1.30 PM
11. NLDC conveys acceptance of
scheduling to Exchange By 2.00 PM
12. Funds and Margin Pay In By 5.30 PM
21
(xiv) Interface between G-DAM and DAM: As per
the framework proposed for G-DAM as
mentioned in point no. (i) above, in order to
facilitate evacuation of entire power of RE
sellers and to meet requirement of buyers in
case of non-selection or partial selection of
their bids in G-DAM, the Exchange proposes to
provide a window to such RE Sellers/buyers to
bid unsuccessful bids of G-DAM in DAM. To
facilitate this bidding, the existing DAM
timelines need to be revisited. Accordingly,
IEX proposes consequential change in timelines
of Day Ahead Market. A comparison G-DAM
timeline, existing DAM timeline and Proposed
new DAM timelines is shown below in table for
consideration of the Hon'ble Commission:
22
PROPOSED G-DAM & DAM TIMELINES
S.
No. SESSIONS G-DAM
EXISTING
DAM
PROPOSED
DAM
1. Bid - Call session 08.00 AM -
09.00 AM
10.00AM-
12.00 PM
12.00 PM -
02.00 PM
2. Determination of
MCP/MCV By 09.30 AM By 12:20 PM By 02:30 PM
3 Publish of Provisional
Obligation By 09.45 AM By 1.00 PM By 02:45 PM
4. Request of ATC to NLDC,
Request for confirmation
from bank on availability
of funds
By 10.00 AM By 1.00 PM By 3.00 PM
5. NLDC Exception for
scheduling, Receipt of
confirmation from bank on
availability of funds
By 10.45 AM By 2.00 PM By 4.00 PM
6. Determination of By 11.15 AM By 2.30 PM By 4.30 PM
ACP/ACV
7. Publish of Final Obligation By 11.30 AM By 2.45 PM By 5.00 PM
8. Submission of Application
for scheduling to NLDC By 12.00 PM By 3.00 PM By 05.30 PM
9. NLDC sends scheduling
request to RLDCs By 1.00 PM By 4.00 PM By 06.30 PM
10. RLDC acceptance of
scheduling to NLDC By 1.30 PM By 5.00 PM By 07.00 PM
11. NLDC conveys acceptance
of scheduling to Exchange By 2.00 PM By 5.30 PM By 07.15 PM
12 Funds and Margin Pay In By 5.30 PM By 3.00 PM By 05.30 PM
23
Proposed timelines are indicative and flexible
to revision based on the feedback of NLDC and
advice of the Hon'ble Commission.
(xv) Unsuccessful Bid Submission Mechanism: As
mentioned in the foregoing paragraphs that
sellers/buyers participating in the G-DAM will
have window to bid their unsuccessful bids in
DAM. To enable this proposition, as shown in
above table, the complete process of 'Opening
of trading window' till 'Publish of Final
Obligation of G-DAM' is proposed to be
completed by 11.30 AM and also to
accommodate unsuccessful bids of G-DAM it is
proposed to shift existing DAM trading window
by 2 hour i.e. between 12.00 PM to 2.00 PM so
that G-DAM participants can place their
unsuccessful bids in DAM.
24
17.Amendments required in existing Regulations and
Procedures: To facilitate the proposed framework
following amendments would be required in `CERC
(Terms and Conditions for Recognition and Issuance
of Renewable Energy Certificate for Renewable
Energy Generation) Regulations, 2010' (herein after
referred as `REC Regulations') and 'Procedure of
scheduling of Collective Transactions':
(i) As per Regulation 5(1)(c) of REC Regulations
a RE Generator shall be eligible for issuance of
RECs if it sells the electricity through power
exchange at market determined price. Therefore
any RE generator who is selling electricity at
Power Exchange in conventional electricity
contracts would be eligible for issuance of
RECs. However, in the proposed Green Power
25
Contracts, RE power will be traded at Power
Exchange on market determined price which
will be eligible for meeting RPO of buyers.
Therefore being RE nature of the Contract, RE
power traded in the G-DAM shall not be
eligible for issuance of RECs and as per
existing regulations any power traded on power
exchange in any contract will be eligible for
issuance of RECs. Therefore amendment in
REC Regulations are required to specify that
RE Sellers who is selling power at Power
Exchange in Green contracts, to that extent RE
Seller shall not be eligible for issuance of RECs
and Buyers can fulfill their Solar and Non-Solar
RPOs by procuring power in respective Green
Contracts.
26
(ii) The procedure of collective transactions issued
by NLDC inter-alia specify timelines of various
activities related to scheduling of power traded
in Day Ahead Market of Power Exchanges. In
view of the proposed G-DAM and
consequential changes in timelines of existing
DAM, the 'Procedure of Collective
Transactions' need to be suitably modified.
(iii)Hon'ble Commission may modify/amend any
other Procedure/Regulations as it may deem fit
to enable introduction of Green Contracts on
Exchange platform.
18.In respect of RPO compliance by obligated entities
who will participate in the proposed contracts, though
petitioner has taken all measures in eligibility criteria
to ensure that generators participating in the proposed
27
contracts are RE Generators, however to further
strengthen the nature of contract Honorable
Commission is urged to specifically hold that the
renewable power bought under these contract shall be
eligible for RPO compliance of obligated entities.
19.Benefits of the proposed Green Power Contracts:
(i) Green Power Contracts will enable obligated
entities procure renewable power at competitive
prices at the power exchanges and help meet
RPOs.
(ii) RE generators will get payment based on
schedules obviating the need for settlement
based on actual injection report.
(iii) RE Sellers and Buyers will get more options to
sell/buy renewable power.
(iv) By providing more options to sell RE power,
new merchant capacity may come up which
28
will inter-alia help to achieve ambitious
renewable capacity addition targets of the GoI.
(v) RE Generator need not tie up capacity in
advance or depend on PPA with the incumbent
Discoms.
(vi) High certainty as liquid DAM is available as
fallback option if volume not cleared in G-
DAM.
(vii) Discoms preference of buying green power
over REC is addressed.
(viii) Small participants (OA/CPP) can buy green
power to meet their RPO.
(ix) Renewable rich States can sell RE power to
Renewable deficit States to meet their RPO and
therefore lessening burden on Renewable rich
State to absorb all RE power generated within
the State.
29
(x) RE generators under preferential tariff in States
having excess wind/solar power are being
curtailed due to Discoms' inability to pay. Such
generators will now be able to sell power in the
market.
20.In view of the above and considering the overall
development of RE market, it is submitted that the
Honorable Commission may accord approval to
launch proposed Green Contracts at IEX platform.
21.The required amendment in Rules, Business Rules
and Bye Laws of the Exchange and contract
specifications shall be submitted for approval of the
Honorable Commission in due course of time as may
be directed by the Honorable Commission or on in-
principle approval of the proposed contracts.
30
necessary in the facts and circumstances of the case.
votteof
FOR IND NERG
Place : New Delhi
Dated : 21st day of September, 2016
GE LTD
31
22.The Petitioner herein craves leave of the Honorable
Commission to submit further additional information
in support of this petition.
PRAYER
In the premise the Petitioner respectfully submits that this
Hon'ble Commission may be pleased to:
1. accord approval of introduction of proposed Green
Contracts on IEX platform.
2. consider holding that the power bought in the
proposed Green Contracts from the Exchange shall be
eligible for RPO compliance by obligated entities.
3. amend Regulations / Procedures required for
introducing of Green Contracts on Exchange platform.
4. pass such further order or orders as may be considered
BEFORE THE CENTRAL ELECTRICITY
REGULATORY COMMISSION
3HD& 4TH FLOOR, CHANDRALOK BUILDING,
36, JANPATH, NEW DELHI - 110 001
PETITION NO. /MP/ 2016
IN THE MATTER OF:
Petition under Section 66 of The Electricity Act, 2003
read with the Regulation 7 of the Central Electricity
Regulatory Commission (Power Market) Regulations,
2010 for approval of introduction of the Green Power
(Renewable Energy) Contracts at Indian Energy
Exchange Ltd.
And
IN THE MATTER OF:
Indian Energy Exchange Limited,
4th Floor, TDI Centre,
Plot No. 7, Jasola,
New Delhi 110 025
AFFIDAVIT
...Petitioner
I, Shruti Bhatia daughter of Sanjaya Bhatia aged about 42
years Resident of B-15/23, DLF, Phase-1, Gurgaon,
Haryana do hereby solemnly affirm and state as under:
1. I am working as Vice President (Regulatory
Affairs & Communication) in the Indian Energy
32
ack/
o..cpstY P
Govt of Bind la * Regd. No.7717
h
r e-
o Jugse E
rte
l nxcitidi
t:
=9rayan 5\‘ 4;),.,
41
(INDIA)
33
2 1 SEP 2016
Exchange Limited, New Delhi, the Petitioner and I
am well conversant with the facts of the case and
hence competent and authorized to sign this
affidavit.
2. I have gone through the contents of the above
Petition and I say that the facts stated therein are
based on the records of the Petitioner and believed
by the deponent to be true.
VERIFICATION
I, the deponent above named do hereby verify that the
contents of my above affidavit are true to my knowledge,
no part of it is false and nothing material has been
concealed therefrom.
Verified at New Delhi on 21st day of September 2016.