The Power Exchange India Limited (PXIL) and Indian Energy Exchange (IEX) have started their real-time market (RTM) trading platforms for electricity transactions on June 1, 2020.

The real-time market is a platform widely used across the world. 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.

The real-time market provided by PXIL would ensure that buyers and sellers can purchase or sell electricity from anywhere across the country with just one hour’s prior notice.

“The RTM provides double-sided closed bid auction with uniform market clearing price,” the release added.

According to PXIL, this would be the first exchange contract that would allow generators with a long-term power purchase agreement (PPAs) to participate in the exchange where they can sell their un-requisitioned surpluses. Further, it also noted that the facility would also allow renewable energy generators, who may have unanticipated surpluses to sell such supply and earn revenues and, in turn, obtain renewable energy certificates (RECs).

“This market on PXIL also has the provision for generators who may have faced a forced outage to purchase power and fulfill their contractual commitments,” noted the statement.

The RTMs would provide the distribution companies (DISCOMs) an opportunity to access the market to meet any last-minute requirements.

Commenting on the launch of RTM trading, Prabhajit Kumar Sarkar, the chief executive officer, PXIL, said, “PXIL’s real-time market would be a game-changer in the electricity market for the first time. It will allow generators with even long-term PPAs to participate in the vibrant power market of the country. The RTM would present to the DISCOMs as well as both conventional and renewable generators, a vibrant market-based platform, to better manage their power requirements in a planned, efficient, and transparent manner.”

The maximum price quote proposed for the real-time market is ₹8 (~$0.11)/kWh while the minimum price quote will be ₹0/kWh. Negative price quotes can be introduced with a minimum price quote of ₹-3 (~$-0.04)/kWh, the release added. PXIL’s RTM trading platform can be accessed through its portal – PRATYAY.

According to the IEX, the new market platform will not only enable utilities and consumers to manage demand variation efficiently with delivery within an hour of the closure of the trade session, but it will also reduce dependence on deviation settlement mechanism (DSM), optimize generation resources, sell surplus power efficiently with next day payment cycle, and efficiently manage renewable energy intermittency.

In its statement, the IEX added that it has already held several capacity building sessions involving the main beneficiaries of this new market segment, including market participants, generation companies, and utilities. “We have also successfully conducted various mock trading sessions with good participation and satisfactory results,” said the release.

In April 2020, Mercom reported that amid the coronavirus (COVID-19) outbreak in India, the Central Electricity Regulatory Commission (CERC) decided to defer the implementation of the real-time power market until June 1, 2020.

However, it recently passed an order announcing the implementation of the RTM from June 01, 2020. The CERC explained that trading would be conducted as per the detailed procedures previously issued by the National Load Despatch Center (NLDC) and that they will apply to applications made for scheduling of collective transactions in RTM under short term open access (STOA) agreements.

It stated that power exchanges have also agreed to modify their rules and bylaws to support RTM contracts and have filed petitions with the Commission for approval.

It provided detailed instructions for how RTM trading is to be conducted between June 1, 2020, and June 14, 2020, and ordered for the complete records of transactions during this period to be compiled and examined by the NLDC. The CERC said that based on the analysis of these reports, it would decide on how transmission corridors are allocated after this period. The Commission directed the NLDC and power exchanges to incorporated these directions appropriately for scheduling collective transactions in RTM power trading starting June 1, 2020.

Earlier, Mercom published a report that said that India’s power sector is currently in a transitional phase, shifting from long-term generation contracts to a greater reliance on short-term contracts and electricity spot markets. In this transition, policymakers and regulators face some tough questions around contract regulation, spot market design, requirements and incentives for spot market participation, and potential risks in ensuring competitive markets.