India Energy Exchange (IEX), the country?s first power exchange, is all set to become a reality soon. The Multi Commodity Exchange promoted exchange will hold a mock power trading on April 28, as per the Central Electricity Regulatory Commission (CERC) suggestions.
The ensuing mock trading will involve IEX?s 50-odd members, national load despatch centre, regional load despatch centres (RLDCs), state load despatch centres and banks.
According to sources, ?Members will submit their bids for the drawal of power. IEX will process them based on clearing price for each hour. IEX will provide the information regarding power traded and scheduling of power to banks though there will not be any actual money transaction.? MCX sources preferred not to comment.
According to a CERC member, ?CERC had already recommended that IEX should carry out a mock trading as it will give the idea of how power exchange functions. IEX will submit its report on the mock trading and thereafter it will be matter of few days for IEX to commence its operations from the National Capital Region.?
According to the IEX business model, the 24 hourly periods would be traded separately using a closed linear interpolation auction procedure. The closed auction method is a reliable, transparent method, allowing both buy and sell bids to be submitted at the same time without disclosing the identity of the bidder, price, and quantity of bids. It ensures competition by keeping pressure on parties to give best bids and ensures that all parties pay or receive the uniform price, which is same or better than their price bids. It also ensures market liquidity by concentrating orders on each hourly period.
Members will place their orders during bid-call period (10 am-12 noon) of the auction day.