FAQ’s

Delegate Questions & Answers

Our FAQ’s are split into two sections – The Delegate Questions and answers can be seen below. You can read our Speaker Question and Answers here.

What is the Balaji Trading (BT)?

The online platform provides for electricity will enable excess energy to be openly traded at reasonable prices. It is a Platform on which buyers & sellers come together to trade.

What are the aims of Power Exchange?
To retrieve the excess generation from surplus region and transmit to a deficit region at a market clearing price (MCP). The MCP is discovered based on the principles of demand and supply. Prior to Exchange operation, this was done by electricity traders on negotiation basis.

Why Power Exchange is needed?
In market driven economy market forces are contradictory. Buyer wants low price, seller wants otherwise. These conflicting forces determine the correct price of a commodity at a given time.
It is thus important that market forces must remain faceless and anonymous. Facelessness and anonymity creates a level field for all players.
In today’s scenario electricity is no more a service, it is a commodity. On an electronic power exchange, buyers and sellers of electricity from the length and breadth of the country can converge without revealing their identity.
For this we need a nationwide Electronic Power Exchange to allow the Electricity Market to be driven by genuine market forces of demand and supply.

What are the Modes of Power Trading?

  • Long term PPA for 25 Years.
  • Bulk Power supply agreement.
  • Bilateral through power traders.
  • Short term bilateral contracts where both Buyers & Sellers are identified before hand & the prices are decided by negotiation.
  • Through Power Exchange platform, where prices are discovered through competitive bidding and the power is sold to and brought from the single large countrywide pool.

What Benefits does Exchange bring to the Electricity Market?

The Exchange has brought a true market driven economy in Electricity sector of India. Ours is a power deficit country, but some regions have surplus power because of abundant hydro potential or coal reserve. Today our country’s Transmission System is electrically integrated, therefore it is possible to transmit power from the most remote area of one region to the load center of any other region. In Pre-Exchange scenario this power trading was conducted purely on bilateral basis. Along with transmission losses and UI risks, payment uncertainties prevented the true market driven economy in electricity market. Power Exchange wipes off all these issues by:

  • Empowering the Market to discover a uniform market clearing price (MCP) and market clearing volume (MCV).
  • Evenly distributing transmission losses at both ends.
  • Enabling participants to hedge against UI risks.
  • Guaranteeing secure & timely payment to sellers.
  • Generously improving the market environment to encourage investment in new generation capacity, thus helping make India a power-surplus country.

What is Collective Transaction?

  • Trading through Power exchange is called Collective transaction. Participants of Collective transaction enjoy priority in Scheduling over bilateral transaction application received within three days prior to the date of scheduling and up to 15:00 hrs of the one day before date of scheduling clubbed to-gather.
  • They also enjoy priority during curtailment due to sudden transmission Congestion over short term bilateral transaction.

What are the different modules of Electricity trading through Exchange?
At present Day-ahead. Anonymous, Simultaneous Competitive Bidding of Electricity Contracts on the Exchange with price determined from uniform pricing mechanism.
In future Week ahead, Fortnight ahead, Month ahead, Quarter ahead, Year ahead and 3 year ahead markets are envisaged.

What is the Contract Size?

  • Minimum Volume = 1MWH
  • Minimum Size = 1Hr
  • Minimum Bid Price: Tick Size = Re. 1/MWH
  • Minimum Volume: Tick Size = 0.1MW

What are the Preliminary Requirements for start of trade?

  • Grid Connectivity either at 11KV, 33 KV, 66 KV, 132KV, 220 KV or 400 KV level.
  • NOC from respective SLDC in prescribed format i.e. PX-I.
  • Installation of special Energy meter & other auxiliary equipments as directed by SLDC, which records flow of energy, demand, Voltage & Average frequency at Fifteen Minute intervals.
  • Depositing annual subscription of Rs. per financial year, to BT, against which BT will provide a unique identification number which enables an applicant to start trading.
  • Depositing the margin money to BT which equals to the Last seven days average trading obligation (Applicable for Buyers only)

Who is Eligible for Trading at BT Platform?

  • Intended buyers & sellers shall have to go through an entity who has been admitted by Power Exchange as a registered member, by becoming their client.


How the Power will Flow?
The power will flow through the existing STU/CTU network depending on the location of the entity’s injection/drawl point.

Who will control or regulate the power flow?
The National Load Dispatch Centre (NLDC), Regional Load Dispatch Centre (RLDC) & State Load Dispatch centre (SLDC) controls and Regulates the power flow.

How Power is delivered?

  • The Exchange prepares the schedule based on the ATC, MCP & MCV. The Final Schedule is given by the Power Exchange to the NLDC.The NLDC sends the Schedule to respective RLDC’s who incorporates the schedule in their schedule and send the same to respective SLDC’s.SLDC delivers the schedule to concerned buyers or sellers. Once the schedule is delivered, it is deemed that power has been delivered.
  • The actual injection/ drawl are recorded by the special energy meter installed at the point of injection / drawl. The meter reading is collected through telemeter or by joint inspection.

How Deviation from Schedule is settled?
Electricity is very dynamic in nature. Any devotion from the schedule is either payable/receivable by the client and is settled by the RLDC/SLDC under the UI mechanism. UI calculation is compiled by RLDC and certified by Regional Power Committee (RPC).

What are UI Charges?

  • It is the price of power at a particular grid frequency.
  • Presently it varies from Rs 7.35/- per KWH at 49.22Hz to RS 0/- per KWH at 50.30 Hz.UI rate at less than or equal to 49.2 Hz is Rs 10.30/- per KWH.

How Market Clearing Price (MCP) and Market Clearing Volume (MCV) is calculated?
Prices are governed by the principal of Demand Vs Supply at exchange platform. MCP Is the price of hourly electricity contracts established on IEX arrived at after considering all valid purchase and sale bids on unconstrained transmission network.

  • All Purchase & Sale bids are aggregated to trace a demand supply curve.
  • The bids and offer portfolio shall be assumed to be a sloping curve. All purchase bids can have only non-increasing quantity for every increase in bid price & every sale bid will have only non-decreasing quantity for every increase in bid price

What is clearing?

The term Clearing denotes the process of determination of obligations of Members of Exchange resulting from conclusion of a transactionat the exchange.

The process involves notifying the buyer of his payment obligation and the seller of his funds receipt due to execution of trade where power would flow from seller to buyer.

What is settlement?

The term Settlement denotes the process of discharging the obligations of Members resulting from conclusion of a transaction at the Exchange.

Who are obligated to purchase RECs?

The entities mandated to purchase a defined quantum of renewable energy of their overall consumption are Obligated entities. Obligated entities may either purchase renewable energy or can purchase RECs to meet their Renewable purchase Obligation (RPO) set under Renewable Purchase. Obligation of their respective States. Following entities are generally obligated in the State:

  1. Distribution Licensees
  2. Captive Consumers
  3. Open Access users

Who are eligible to sell RECs?

(i) Type of renewable source is approved by MNRE and respective State Commission.

(ii) Not have any Power Purchase Agreement (PPA) for the capacity related to such generation to sell electricity at a preferential tariff determined by the appropriate commission

(iii) Not having agreement to sell electricity to local distribution company at price not exceeding pooled cost of power purchase of that distribution company

(iv) Sells electricity to the

Distribution licensee of the area at a price not exceeding the pooled cost of power purchase of such distribution licensee, OR

To any other licensee or to an open access consumer at a mutually agreed price, or through power exchange at market determined price. Selling electricity to any entity other than local distribution company at market driven prices or otherwise.
What are the losses to be adjusted?

In day ahead marked. Both buyers & sellers are to adjust the loses up to their regional periphery. RLDC will adjust the CTU & STU loses at the time of scheduling

What are the charges to be paid by the client?

Statutory Charges to be paid by the Client: * Price for traded volume of electricity @ MCP discovered at IEX platform * NLDC Application Fee @ Rs. 5000/- per day. (To be shared by the number of successful bidders on national basis. For example, Suppose number of successful bidders in national level = 50. So share of NLDC application fee for each successful bidder = Rs.5000/50)
* Applicable transmission charges for CTU lines @ Rs. 100 per MWH
* Applicable transmission charges for /STU lines. @ Rs 80 per MWH, if applicable and if not separately notified by the concerned SERC. In case the concerned SERC notifies the transmission charges separately the same shall be applicable.

*NLDC scheduling & operating charges Rs.5000 per day per entity involved. (All buyers within a state shall be clubbed together into one group and all sellers within a state shall be clubbed together into another group .Each buyer group counted as regional entity buyers and each seller group counted as regional entity sellers).

Example: Suppose No of successful buyers on regional basis = 7 and number of successful sellers on regional basis = 6 and number of successful bidders in national level = 16. Then Share of NLDC scheduling & operating charges for each successful bidder = (Rs.5000 X Regional Entity buyers + Rs.5000 X Regional entity sellers) / No of successful bidders.

* SLDC scheduling & operating charges Rs. 2000/- per day. (If applicable)