One view of such a scenario :
Other scenarios welcome.
Centre may seek nod for coal exchange
The coal ministry is expected to seek approval for India’s first coal trading exchange as part of its 100-day action plan. The exchange aims to facilitate transparent coal trading for both captive and commercial auction holders, potentially leading to better prices for consumers. Surplus stock from Coal India Ltd may also be traded on the exchange. The ministry’s plan includes upgrading coal transportation and loading systems, adding 600 MW of thermal power capacity by NLC India Ltd, and bidding out around 10 coal gasification projects.
In a previous management commentary, IEX mentioned its plans to set up a coal exchange. This would be the third exchange subsidiary for IEX, following the Energy Exchange and Gas Exchange.
Sources:
Read more at:
Centre may seek nod for coal exchange - The Economic Times**
Latest analyst meet takeaways
Source:
ANTIQUE STOCK BROKING LIMITED report 29.07.2024
Few other interesting points in the call apart from those stated above:
Disc: Invested
One interesting data that was given in the IEX call was on the role of exchanges in the energy transition and BESS (Battery Energy Storage Systems) and the power price arbitrage that will take place as Solar grows from 7% to say 20% of the overall energy mix.
Focusing on the solar power arbitrage , your non peak power cost is 3 rupees and your peak power in evening and early morning is 7 rupees. So a 7 rupee arbitrage for BESS .The cost of storing energy on the BESS are down to 3 rupee per unit from 10 rupee per unit last year.
This is very good for both BESS players and Exchanges. A merchant solar farm can generate power in non peak hours for 2.5-3 INR and store the energy in a BESS via the exchange. They can Retrieve the same power in peak hours ( Early morning and Late evenings ) for 10-11 INR . However in this process they pay the exchange double.
Another data point on the BESS is how the prices have fallen making it attractive compared to coal based plants ( quick setup < 2 years, Lower cost, Green and less capital cost ) .
FY23 BESS battery setup cost was around 10 lakh per megawatt per month, now it has come down to 3 - 3.5 lakhs per megawatt per month ( and I feel it will come down further due to technological innovation which will expend life of the battery and newer chemistries ) . This brings the storage cost from 10 rupees per kWh to 3-5 rupees per kWh. Hence total cost of generation becomes 5-6 INR / kWh. This is cheaper than coal plant.
Disclaimer ; Invested and Biased.
Good point, BESS can be implemented by Power generator in that case IEX will get more volume? price arbitrage is due to demand supply gap once it is handled from storage is it not expected to have much lower price gap?
Any listed player who are working in Battery Energy Storage Systems which I can use to further read.
Think of it like this for solar. If you add more solar plants, the supply during non peak hours would be huge 300 GW of Solar for 4 hours would mean 1200 GWh of Energy. Parts of which will get consumed and parts of which will be in demand in non peak hours.
If you add more BESS ( BESS is capex heavy, 100 - 150 USD per kWh for a life of 10 years . Also assuming it is lithium ion cathode ), definitely the prices would stabilize and maybe some bilateral contacts may also take place. But I feel a bulk of volume will go via the exchanges. The arbitrage might be lower but BESS is the only way to reduce spikes in demand and supply. With RE you have both spikes in demand and supply.
I feel we will see more BESS as rent coming up in central places which will be handled by a separate operator for example JSW. This way the BESS operator utilization would be high as they would collect and store from multiple locations and supply during peak hours.
I also feel that due to non enforcement of RPO and no penal provisions, Utilities are not prioritizing the RE as a % of overall energy mix. With regulation this might change and the demand at peak hours can take the price further up.
A subsidiary of HEG is a good ancillary play on BESS. You can read more on the thread. Other beneficiaries are lithium ion cell / module manufacturers like Amara raja and Exide . BMS players like Shivalik, PML ( shunts ) . Capacitors - XPRO etc. Maybe some cooling system suppliers and Inverter suppliers like Siemen / ABB etc.
Disc : I am not a power / Power grid expert. In case there is someone in this thread please add / correct my assumptions.
Thanks for your input, I will spend reading your links and pointers to understand more.
Update on Indian Carbon Exchange (ICX)
ICX, the wholly owned subsidiary of IEX, has been designated by the I-TRACK Foundation
Board as the local I-REC(E) Issuer in India.
Who is I-TRACK Foundation Board?
The International Tracking Standard Foundation (I-TRACK Foundation) is a non-profit organization that provides a robust standard for developing attribute tracking systems. I-TRACK Foundation is acknowledged by major reporting frameworks such as the Greenhouse Gas Protocol (GHGP), CDP, and RE100 as a reliable backbone for credible and auditable tracking instruments. It ensures the highest quality systems and adherence to best practices designed to avoid double counting, double certificate issuance, and double attribute claims.
The International Renewable Energy Certificate (I-REC) for Electricity is referred to as an I-REC(E) and is an exchangeable Energy Attribute Certificate (EAC).
What does this mean for Business of ICX?
As the Local Issuer for I-REC(E) in India, all new Project Registrations for IREC(E) and the issuance of I-REC(E) Certificates will be done by ICX for the entities based in India.
Source: IEX Media Release dated 03.09.2024
IEx.pdf (616.1 KB)
Policy based corrections and vagueness is always the norm, when you deal with things sarkari
My experiences especially electricity regulators.For example GERC(guj energy regu commi.) and their team (GUVNL,GETCO,MG-DG-UG-PGVCL). they all work in tandem.
Why mentioning particular regional regulator ? GRID-India has their own colleagues (state producers, transmission companies) they all into this.
They want to rely less on 25 Yr PPA agreements and push for short term electricity agreements(trading). Ultimately it shall bring efficient transmission & generation of electricity as well as grid stabilisation.
In my opinion The only thing needs to be ascertained is impact of it on IEX…there is no vagueness, coupling is going to be here and likely reduce IEX’s dominance and earnings potential especially from electricity trading.
How gas exchange, carbon credit exchange contributes to IEX, is another aspect.Both have bright prospect is what i think.
Sharing my understanding, Not an expert of electricity trading.
D- Not invested.
There are few types of systems which stores Electric energy and releases as and when required. Battery storage, Pump hydro storage, Flywheel etc. I was searching for which one is most widely used? I found that pumped hydro storage is used worldwide but mostly in developed nations.
Does any one has any Techno-economic articles or some guidance where future of energy storage is? (Particularly for India…and who are Indian companies)
Interesting article
https://www.orfonline.org/expert-speak/-market-coupling-in-the-power-sector-is-india-doing-enough
Sharing a gist of it :
- Market coupling would fulfil its objectives only if India were to take the Market-Based Economic Despatch (MBED) route, where the country’s entire generation becomes market-driven. However, when the share of trade through market exchanges is a mere 7 percent of the total generation, market coupling could fall short of discovering a uniform market price.
- Globally, market coupling has been introduced to integrate two or more electricity markets or geographies. The proposed market coupling in India is unlikely to yield any benefit as it would only be a coupling of power exchanges without adding new geographies. Further, the dominance of IEX over almost the entire market share in collective transactions wouldn’t change the price discovery or liquidity and have a negligible social welfare impact.
So we would end up having uniform power pricing for less than 10% of the Electricity traded over the Exchanges while more than 90% of the Electricity generated would be negotiated via their own Long Term PPAs. We would still end up with non-uniform prices.
NOTE: These PPAs are sometimes 25 year long contracts and are still being negotiated/awarded making uniform pricing a pipe dream even in the future.
Seems more like the Government / Power Ministry is merely using the buzzword “Market Coupling” to shine in some International reports without any actual benefits on the ground.
There are 4 practical ways , renewable energy from Solar from wind can be stored for Grid stability.
1.Traditional Hydro power stations being executed by NHPC/ SJVN by constructing Dams in flowing large rivers, which are either snow fed or rain fed. (disadvantages - long gestation , high capital cost , depends upon Rain, and environment issues - limited scope, can not be built every where )
2.Advanced battery storage system popularly known as ACC, BESS ( Disadv- import content lithium ion battery expensive, requires regular maintenance , recurring expenditure- 10 -15 years life)
3.Pumped Storage Priject popularly known as PSP -easy to built- all that you you need two reservoirs- one at higher elevation and the other at lower level and a set of Pumps and motors. Good life cycle 50, 50 years- no import content (Requires a lot of space , can not be built every where )
4.Green hydrogen as a storage medium - During peak power, solar wind energy can be used to run electrolyser which can convert water to Green hydrogen…during lean power period green hydrogen can be used to produce power by the help of a fuel cell.
This may be ideal , compact , no environment issues ,( disadv- currently expensive …may be in future as technology evolves, capacity would build up and price could could come down)
so currently , only 2,3 are preferred mode and no 3 is becoming more popular for immediate need for next 6-8 year.
There are a lot of stuff available on Green hydrogen thread. One of the post link given below in which you would get all the information that you need. ( also you may please go through JM financial analysis link at the end of the post.
Also please let me know how you want to connect with IEX.
Thanks for detailed reply. It’s useful. Not exactly connected with IEX but it is largely connected with energy landscape and IEX is major transection entity of energy.
Is there any management commentary or interview after the recent news of market coupling? The last time management came and cleared the air. I could not find anything recently. Please post if anyone knows about it. Thanks!
No update from management as of now. But intresting article is below one. You can get from Google search.
Staff Paper on Market Coupling
Prepared by Staff of
Central Electricity Regulatory Commission 3rd and 4th Floor, Chanderlok Building, 36, Janpath, New Delhi-110001 Website: www.cercind.gov.in
August 2023
