1. Workshop on Open Access in Maharashtra Nagpur 14 th May 2016 For Public Use

2. In this presentation Introduction to Indian Power Market Product Portfolio Trading Mechanism Market snapshot Trade @ IEX ParticipationVolumePrice

3. 3 Regulated Tariff approved by Respective SERCs Discom (Existing) 3 Month- 3 Years Tariff covers : Fixed Cost + Variable Cost+ Mark Up ( < long term) Medium Term Intraday- 3 Months to be procured through competitive bidding only Single tariff covering Tariff covers Fixed Cost+ Short Term (OTC) Highly liquid and transparent marketplace More accurate load management through Day Ahead Market Exchange (most preferred ) Costly fuel / less efficient units Much higher costs Self Generation Industries’ Options For Power Procurement

4. Company Snapshot 96% Market Share ~100,000MWh average daily trade 3800+ Participants 3300+ Industries Competition LiquidityTransparency

5. IEX Market Segments Delivery-based Contracts Day-Ahead Market since June,08 Closed, Double-sided Auction 10-12 am bidding Each 15-min block, 0.1 MW min NOC required Term-Ahead Market since Sep,09 Extended Markets introduced 20 th July’15 Day-Ahead Contingency – Another window for Day-Ahead. Extended Market: Trading window increased to 1500-2300 Hours Intra-Day - Extended Market: Trading window increased to 0030 – 2000 Hrs for same day delivery, with delivery starting at 0400 Hours Daily- for rolling seven days (delivery starting after 4 days) Weekly - for 1 week (Monday-Sunday) Renewable Energy Certificates since Feb,11 Next… Energy Saving Certificates Green Attributes as Certificates Sellers : RE generators not under feed in tariffs Buyers: Obligated entities 1MWh equivalent to 1 REC Auction Continuous

6. Features of Day Ahead Market A closed double-sided anonymous auction for each 15-min time block for the following day The intersection between the aggregated sale and purchase curves defines the market clearing price (MCP) 12 Bid area defined Congestion Management through market splitting and determining Area Clearing Price (ACP) specific to an area Bid types: Portfolio Orders or Block Orders Minimum bid=Re.1 for 0.1MWh Minimum Price & Volume Step = 0.1p * 0.1 MWh 12 Bid Areas N1 N2 A2 A1 W3 E2 E1 N3 W2 W1 N2 S2 S1

7. DAM trading process BiddingMatching Review corridor and funds availability ResultConfirmationScheduling Bids for 15- min each or block bids can be placed MCP &MCV calculated Corridor availability and funds verified Collective transaction confirmation by NLDC Final Schedule sent to RLDC for incorporation Final ACV and ACP calculated. Market splitting if congestion 10:00 am to 12:00 pm 12:00 pm to 1:00 pm 1:00 pm to 2:00 pm 3:00 pm 5:30 pm 6:00 pm

8. Bid Types Bids for each 15 min can be entered Varying price and quantum pairs Allow partial execution Single/Portfolio Bid Relational Block Bid for any 15 min Mother or child bid No circular links No partial execution Block Bid

9. Price Tick011.122.12.533.13.53.844.15791214171920 Portfolio A20 10740000000000 Portfolio B60 5040 20 Portfolio C70 6050 10 Portfolio D402000-40-60-80-81-85-100 -120 Portfolio E00000-40-50 -60 -90 Portfolio F00000-20 -30-40 190170150 140120110100979490 7030 0000-40-120-150-151-155-170-200-210-250 Total Buy, MW Total Sell, MW 190170150 1000-40-51-58-76-110-120-180-220 Net Transaction, MW Matching: Model Price Calculation algorithm (Example for a sample 15-min) MCP: Rs 2.5 MCV: 120 MW

10. Treatment of Losses… for buyer POC Loss: 1.5% S1 (State) loss: 4.85 % Buyer X bids for 100 MW at its respective regional periphery 100 MW at NR periphery POC Loss 1.5% 98.5 MW at State periphery State Loss 4.85% 93.72 MW at Buyer End X (Buyer) Bid Volume Scheduled Drawal <= SLDC Clearance Maximum Bid= Volume in standing clearance + Regional & State losses

11. Market Snapshot Participation Volume Prices

12. Key statistics: Electricity & REC Market Market Share (FY 14-15) State Utilities Generators Industrial Consumers Average Daily Volume 51% 16 States I 5 UTs 782 >3 million RECs Highest: 4,23,731 RECs ELECTRICITYREC 96% 29 States I 5 UTs 311 >90,000 MWh Highest : 136,913 MWh 17933421 IEX Data as on 31 March, 2016

13. DAM Cleared Volume v/s MCP Volume

14. High Liquidity in Volume at IEX (Average Hourly Volume in MW)

15. Average Area Prices in DAM at IEX With commissioning of transmission Lines, market splitting observed majorly in two regions Area DAM Prices (RTC) 12 Bid Areas

16. Increasing Participation Participation

17. Participation at IEX

18. Industrial segments with IEX

19. Monthly Price Trend (WR) 19

20. Open Access: What a consumer pays Charges Inter-State Transmission charges payable by the open access consumer PoC charges Payable to the state transmission utility for the use of the transmission system for availing power through open access. Transmission Charges or STU Charges Charge to the Discom for conveyance of electricity through open access as determined by the SERCs Wheeling charges Subsidising open access consumer has to pay a cross subsidy surcharge to the Discom. Cross Subsidy Surcharge Additional Charges, if any NLDC application fee, scheduling and operating charges, SLDC Charges IEX transaction charges/Trading Margin Others

21. Open Access: What a consumer pays Losses Inter-State transmission system loss Point of connection (PoC) loss Consumer to absorb apportioned energy losses in the transmission system as per the relevant regulations Transmission loss or state loss Technical losses in the distribution system determined at various voltage level by the state commissions. Wheeling loss An open access consumer has to bear in kind the following losses as defined by the relevant regulations

22. Cost Benefit Analysis for Express Feeder Industries Note:-FY 2015-16 Avg MCP Rate 2.49 Rs/Unit Sr No Particulars Rate (in Rs/KWh) In 2015 At 11 kV & 22kVAt 33kV66 KV & Above 1 IEX Price2.49 2 Regional Losses (2.04%)0.06 3 Mah Trans Losses ( 3.89%)0.1 4 Wheeling Losses ( 9% And 6% )0.240.160 5 Regional Transmission Charges0.25 6 Mah Trans Charges0.26 7 Wheeling Charges0.830.150 8 IEX Transaction Fees0.02 9 Operating Charges (SLDC, NLDC)0.15 10 Cross Subsidy Surcharge1.49 11 Trading Margin0.02 Total Cost5.915.154.84

23. Cost Benefit Analysis for Non-Express Feeder Industries Sr NoParticulars Rate (in Rs/KWh) In 2015 At 11 kV & 22kVAt 33kV66 KV & Above 1IEX Price2.49 2Regional Losses (2.04%)0.06 3Mah Trans Losses ( 3.89%)0.1 4Wheeling Losses ( 9% And 6% )0.240.160 5Regional Transmission Charges0.25 6 Mah Trans Charges0.26 7Wheeling Charges0.830.150 8IEX Transaction Fees0.02 9Operating Charges (SLDC, NLDC)0.15 10Cross Subsidy Surcharge1.09 11Trading Margin0.02 Total Cost5.514.754.44

24. Cost Benefit Analysis for Industries

25. Impact of IEX on the Sector

27. Viability assessment: Open Access in States * Industrial tariff at 33/66kV, IEX landed cost includes OA charges and assuming cleared price at Rs 2.50/unit High Saving Potential

28. Trade @ IEX

29. Registration PRE -TRADING SELECTION OF MEMBER 1 week MEETERING Special Energy Meter Identify vendor to procure and install MEETERING Special Energy Meter Identify vendor to procure and install 0.5-3 Months 1 Month Registration at IEX Client registration for each point of drawal Unique id created in Exchange system Registration at IEX Client registration for each point of drawal Unique id created in Exchange system 0.15 Month Member Related Activities Exchange Related Activities

30. Power Market Outlook Prices at Exchange will continue to be lower in the coming months. Installed capacity of India has reached about 281 GW. Peak demand was only 150 GW, hence surplus capacity. Coal production in the current year (1015-16) has increased by about 9% over previous year. There is no major change in demand pattern. E-auction prices have also come down due to increased availability of Coal. Sell quantum available in power market has increased due to higher availability of coal at reasonable prices. This is likely to continue in coming months. Transmission capacity has increased with commissioning of lines. No congestion for Northern region after Sept 15 except for brief period in Jan’16 due to tripping of line.

31. Register for IEX Monthly Bulletin Register for Daily SMS alerts Use IEX Mobile Application to track prices Follow us @IEXLtd Thank You www.iexindia.com

32. Cost Benefit Analysis for Industrial Consumers- IEX vis-à-vis Discom S. No.Particulars33kV132 kv 1Price at IEX (FY 16) (assumed BID by the client if cleared at exchange)2.46 2Losses of WR (POC Loss=2.05%)0.05 3Losses of Western Transmission (Loss= 3.89%)0.10 4Losses of Maharashtra Wheeling (Loss= 6% (33KV)Or 9 % (22KV))0.150.00 5Transmission Charges of WR (POC Charge)0.26 6Transmission Charges of Maharashtra0.26 7Wheeling Charges of Maharashtra per unit0.150 8IEX Margin per unit0.02 9NLDC, SLDC Processing & Operating Charges0.05 10Cross Subsidy Surcharge (Exp Feeder)1.49 11Trading charges0.02 Total Landed Cost through IEX5.004.70 Test Case - Cost Benefit Analysis 1Power Consumption (In MW) through out the day11 2Number of Hours of Purchase24 3Number of Units Consumed per day24,000 4Rate of procurement from State Discom (In Rs/kWh)7.21 5Average rate of procurement through IEX5.004.70 6Net payable as per state tariff (Rs)173040 7Net payable as per IEX (Rs)119969112827 8Savings through IEX vis a vis state Discom on daily basis (Rs)53,07160,213 Savings through IEX vis a vis state Discom on Monthly basis (Rs. Lacs)15.9218.06 Savings through IEX vis a vis state Discom on Yearly basis (Rs. Lacs)191.05216.77

33. Silent Features of Dist OA 2016  Eligibility to seek Open Access Contract Demand >=1 MW has been allowed.  DAM through power Exchange is allowed.  Multiple Sources are allowed.  Contract Demand Reduction Consumer availing STOA shall not be eligible to revise his Contract Demand with the Distribution Licensee during the tenure of the STOA, but may do so at the time of applying for OA permission.  Banking of Energy is permitted.

34. Day-Ahead Open Access  Permitted only if surplus capacity is available in the system of Distribution Licensee.  The Application for grant of Day-Ahead Open Access shall be made to the Nodal Agency only one day prior to the date of scheduling, up to 12:00 Hours. Illustration:-An Application for Day-Ahead transaction on 15th August shall be received only on 14th August up to 12:00 hours.  Application received after 12:00 hours of the day immediately preceding the date of scheduling or on the day of scheduling shall be considered in case of contingency of the Applicant, and the fee for such contingency Applications shall be five times the otherwise applicable Application fees.

35. Day-Ahead Open Access  The Nodal Agency shall check for congestion and convey grant of approval or otherwise in the format provided in Annexure III [Format-ST2] by 14:00 Hours of the day preceding the date of scheduling of the transaction.”  All applicable STOA provisions shall apply to application for Day ahead OA.

36. Annexure III Format – ST2

37. Annexure III Format – ST2 (Cont.)

38. Prices for various time block March 2016

39. IEX Monthly Cleared Volume

40. IEX Day Ahead Market Price & Volume Trend March 2016