The Indian Energy Exchange (IEX) and the Power Exchange India Limited (PXIL) have started their real-time market (RTM) trading platforms for buying & selling electricity units on June 1, 2020.
What is Real-Time Market (RTM) for Electricity Trading ?
The real-time market (RTM) is a platform widely used across the world. In India, RTM is an endeavour by the Central Electricity Regulatory Commission (CERC) with an intent to make the power market dynamic by enabling trade in electricity through half-hourly auctions.
The RTM is designed as a half-hourly market, comprising 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 the trade session. Hence, the real-time market would ensure that buyers and sellers can purchase or sell electricity from anywhere across the country with just one hour’s prior notice.
RTM is powered by the double-sided closed auction to ensure transparency, competitive price discovery to the market participants.
Electricity contracts are traded on the Day Ahead Market (DAM) where market participants purchase and sell electric energy at financially binding day-ahead prices for the following day. Before RTM came into play, participants were able to buy power from exchanges between 10 AM to 12 noon in the DAM.
Purpose of Real-Time Electricity Market
RTM will facilitate utilities to reduce dependency on deviation framework and save on the huge penalties. Further, an RTM will also support the grid operators to enhance overall safety and security of the grid. The real-time market will help the discoms to forecast and schedule green energy in an effective way thereby supporting the national green energy aspirations. India has set a target of attaining 175 GW in renewable energy capacity addition by 2022.
“The primary purpose of the RTM is to allow utilities to manage their power demand dynamically, save on huge deviation-related penalties and integrate renewables in an effective way,”Rajiv Srivastava, CEO & Managing Director, IEX Ltd.
With the fast-paced shift towards renewable energy, RTM will facilitate the discoms to manage the challenge of intermittency associated with renewables.
RTM would also provide an opportunity to generator companies (gencos) to sell their un-requisitioned capacity thereby enabling efficient use of generation capacity. Generating companies otherwise tied up to long term PPAs can also access the power market through RTM for transacting their un-requisitioned surpluses.
Overall, the new market segment will foster greater flexibility, competition and efficiency in electricity sector.
Early Response from the Participants
IEX said that on the first day of trading, it has received an overwhelming response from Discoms, power generators as well as commercial and industrial consumers on its RTM platform. Further, the launch witnessed the participation of more than 80 market participants including all major distribution utilities and generating companies. During the auctions, the prices went down as low as Rs 0.10 per unit.