RPG Power Trading Company Limited
Frequently Asked Questions
  1. What is Open Access?

    As per definition of Open Access in the Electricity Act, 2003, Open Access is “the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission”.

    Open Access allows consumers to choose among a large number of sellers, instead of being forced to buy electricity from their existing utility. Similarly, generators can choose their own buyers within or outside their state, instead of selling power to their utility. This is done by payment of transmission charges as decided by CERC for use of CTU lines and as determined by SERC for using of state transmission and distribution systems.

  2. What are different technical and financial requirements for availing Open Access?
    • Minimum volume of power should be 1 MW
    • Scheduling should be done on a 15 minute-block basis
    • Installation of special Energy Meter, 0.2S Class CT-PT set, commissioning of RTU, meter testing and CT/PT set testing report, commissioning and testing report of equipment by STU to be submitted to SLDC along with forwarding letter addressed to the CE.
    • No Objection Certificate from SLDCs
  3. Who will control/regulate the power flow?

    The power sector is regulated by Central Electricity Regulatory Commission at central level and by the various State Electricity Regulatory Commissions at state level. The power system is operated and controlled by various Load Dispatch Centres functioning at the State, Regional and National levels respectively.

  4. What is the process of Power trading?

    Powers is bought from an entity in a surplus location / surplus utilities / generating stations and sold through the state or central transmission company into an entity in deficit states/utilities.

  5. What are the different categories of Trading Licensee?

    As per Central Electricity Regulatory Commission (Procedure, Terms and Conditions for grant of trading licence and other related matters) Regulations, 2009, with subsequent amendments, there are four categories of Trading Licensee with varying maximum permissible volume for transactions

    Category Volume of electricity proposed to be traded in a year
    Category I No Limit
    Category II Not more than 1500 MUs
    Category III Not more than 500 MUs
    Category IV Not more than 100 MUs

  6. What are the services provided by the power traders?
    1. Facilitating to reduce geographical, seasonal & daily gap between demand and supply
    2. Bilateral power trading contracts between generators, traders and customers
    3. Co-ordination with various intervening agencies e.g. Central & State Transmission Utility, Load Despatch Centres and regulators
    4. Payment security mechanisms as per contract
    5. Portfolio Management (Collective scheduling/sale of CPP power of States)
    6. Contract Management
    7. Consultancy in above areas for optimisation of power sale/purchase requirement and tender participation
    8. Market intelligence data support and sharing the latest trends in power sector
  7. What are different products offered by a Trader?

    Electricity Trader can offer a wide range of products, which include

    1. Transactions through Bilateral Arrangement-
      1. Long Term Arrangements including competitive bidding (consultancy only including bid preparation)
      2. Medium Term Arrangement for upto 3 years
      3. Short term arrangements
      4. Over-The-Counter transactions, under negotiated pricing between identified seller and buyer
    2. Transactions through Power Exchange platform as a trading cum clearing memeber
      1. Day Ahead contracts
      2. Intra-Day contracts
      3. Weekly contracts
      4. Daily Contracts
      5. Day Ahead Contingency
      6. Renewable Energy Certificates
  8. What different roles a Trader shall perform on behalf of its client?
    1. Marketing
    2. Commercial
    3. Regulatory
    4. Financial
    5. Advisory
  9. How Financial Settlement of a trade is done?
    1. For Day Ahead Collective Transactions- Financial settlement is done by electronic transfer of funds between the clearing members & the Exchange. The proceeds from sale of power are transferred to members settlement account by 2 P.M of the day following the day of delivery by power exchange. The fund transfer to clients account is either through electronic money transfer system or by issuing cheque as preferred by the client. The buyers have to pay the amount of power purchased at MCP by 14.30 Hours on the day of bidding.

    2. For Bilateral Transactions-Invoices for the energy charges shall be raised as per billing cycle. The relevant bills will be raised based usually on the provisional weekly energy data for the energy at delivery point based on RLDC/SLDC website data. Financial Settlement will be done in accordance with any rebate/surcharge, as and when applicable, and shall include SLDC Scheduling & Handling charges, T&D charges, CSS and Open Access charges, if any.
  10. What is the trading margin cap by Hon’ble CERC?

    Depending on the contracted price for a bilateral deal, CERC has capped the trading margin that can be maximum charged as follows:

    Sale Price (Rs./KwH) Margin (Rs./kWh)
    =< 3 Upto 0.04
    >3 Upto 0.07

  11. What are the risks involved in power trading?
    1. Credit Risk The seller of power may encounter payment default risk -. The power traders play their role as a shield to sellers by managing the credit risk involved in a power transaction. The power traders primarily deal with the entities having credit concerns - through appropriate risk mitigation techniques. -.

    2. Operational Risks
      Risks include availability and reliability of transmission facility and power generation by the seller without interruption. The power traders apply for open access well in advance with the identified agencies for approval of open access required for an advance transaction.

    3. Price risk
      A contract finalised in advance between a buyer and a seller through a power trader is always subject to price risk. The price on the spot market during the delivery period of an advance contract may be substantially different. Such situation may give an arbitrage advantage to a buyer or seller to exit the contract executed in advance.

    4. Competition on account of direct trading between the surplus and deficit unit.
      There may be a situation that the prospective buyer and seller, who had previously dealt through the trader, develop commercial relationship. In this case they may bypass the trader to engage in a direct commercial relationship

    5. Dependence on few buyers and sellers of power.
      There are occasions where the restriction of buyers and sellers significantly reduce business opportunities. Also during participation of tenders called by SEB, few sellers may be interested in the same, because there may long gestation period to decide the final contract.
  12. How will any deviations from schedule be settled?

    All deviations shall be settled at central level as per Deviation Settlement Mechanism, 2014 as amended from time to time and/or the prevailing settlement mechanism at the state level

  13. What are present CERC regulations applicable related to Open access and Power Trading?

    The CERC Regulations applicable include

    1. Power Market regulation, 2010
    2. Open Access in Inter State Regulations, 2008
    3. Fixation of Trading Market Regulation, 2010
    4. Deviation Settlement Mechanism, 2014
    5. Indian Electricity Grid Code, 2010
  14. What are major differences in transactions at Power Exchange, and that through a Trading Licensee?
    Power Exchange Transactions Transactions Through Traders
    Transactions are of collective nature Transactions can be bilateral as well as as a member client on Power Exchange platform
    Products restricted to those offered at the Exchange Products include those offered at Exchange, as well as other bilateral arrangements
    Pricing of electricity is determined at power exchange end based on demand supply condition on daily basis. Pricing of electricity may be on negotiated basis, tender discovered or market determined if transacting at the Exchange platform
    Power supply under day ahead market is subject to daily varying demand supply condition, grid corridor availability. Bilateral arrangements ensure firm supply with pricing and advance booking of corridors result in lesser incidents of congestion
    Buyers to make payment in advance Bilateral arrangement follows billing cycle and thus buyers can avail credit.

  15. What is the price discovery mechanism at power Exchange? How is it different from that with Traders?
    1. Price discovery at Power Exchanges is done by an anonymous double sided closed auction process, wherein all sale and purchase offers are collectively treated, initially in an unconstrained scenario. The aggregate supply and demand curves are drawn on Price-Quantity axes. The intersection point of the two curves gives the Market Clearing Price (MCP) and Market Clearing Volume (MCV) corresponding to price and quantity of the intersection point. Based on these results the provisional obligation and provisional power flow is calculated. Funds available in the settlement account of the Members are checked with the Clearing Banks and also requisition for capacity allocation is sent to the National Load Despatch Centre (NLDC). In case sufficient funds are not available in the settlement account of the Member then his bid(s) is deleted from further evaluation procedure. Based on the transmission capacity reserved for the Exchange by the NLDC on day-ahead basis by 2.00 PM, fresh iteration is run at 2.30 PM and final Market Clearing Price and Volume as well as Area Clearing Price and Volume are determined. These Area Clearing Prices are used for settlement of the contracts.

    2. Price Discovery over bilateral route, through a trader, is done as per requirements of seller and the buyer, on negotiated basis or as discovered in a tender process
  16. What would be the tentative landed cost at the consumers’ periphery while purchasing power from the Power Exchange?

    Key factors that influence the landed cost per unit of electricity include

    1. Point of Connection (PoC) Charges & Losses, as applicable for utilisation of CTU network, and as approved by CERC/NLDC
    2. State Transmission Charges & Losses, as applicable for utilising STU network, and as approved by SERC/SLDC
    3. Distribution Charges & Losses, as applicable
    4. Cross Subsidy Surcharge, if any, as approved by SERC
    5. Electricity Duty, if any, as approved by SERC
    6. Scheduling & Handling Charges
    7. Trading Margin charged by Trader

    The Landed Cost per unit of electricity would vary from consumer to consumer depending on the various charges and losses applicable within his state/region. A sample Landed Cost is shown below. The values assumed for calculation are only indicative and would vary accordingly.

    Particular Unit
    Rate at Regional Periphery 4 Rs./kWh
    PoC Charge (Drawl) 0.1489 Rs./kWh
    PoC Loss (Drawl) 1.43 %
    State Transmission Charge 0.08 Rs./kWh
    State Transmission Loss 3.10 %
    Distribution Charges 0.1 Rs./kWh
    Distribution Loss 9 %
    IEX Transaction Charges 0.02 Rs./kWh
    Cross Subsidy Surcharge 0.2 Rs./kWh
    Scheduling & Handling charges 0.13 Rs./kWh
    Landed Cost 5.383 Rs./kWh
  17. What is Renewable Purchase Obligation? Who are obligated to fulfil RPO?

    RPOs, put simply, are the minimum percentages of the total power that electricity distribution companies and some large power consumers need to purchase from renewable energy (RE) sources. RPO makes it mandatory for the obligated entities to meet part of their energy needs through green energy. The state-wise RPO targets are fixed by the respective State Electricity Regulatory Commissions, who may set separate targets for solar and non-solar energy.
    Entities obliged to fulfil RPO include

    1. Distribution Licensee
    2. Open Access Customer
    3. Captive Power consumer
  18. What is REC?

    RPOs, put simply, are the REC is a tradable certificate of proof that one MWh of electricity has been injected (or deemed to have been injected) to grid by an RE generator.
    The Electricity Act, 2003, the policies framed under the Act, as also the National Action Plan on Climate Change (NAPCC) provide for a roadmap for increasing the share of renewable in the total generation capacity in the country. However, Renewable Energy (RE) sources are not evenly spread across different parts of the country. This inhibits SERCs in states with poor RE generation source from specifying higher Renewable Purchase Obligation (RPO). On the other hand states with high potential of RE sources harness the RE potential beyond the RPO level fixed by the SERCs.
    The REC mechanism seeks to address this mismatch between availability of RE sources and the requirement of the obligated entities to meet their RPO.
    There are two categories of RECs, viz., solar RECs and non-solar RECs. Solar RECs are issued to eligible entities for generation of electricity based on solar as renewable energy source, and non-solar RECs are issued to eligible entities for generation of electricity based on renewable energy sources other than solar. Obligated entities can purchase these RECs in order to fulfil their RPO.

  19. How are RECs issued to a RE generator?

    The RE generators who fulfil the eligibility criteria can apply for the accreditation to concerned State Agency. After successful accreditation the eligible entity (RE generator) may apply for registration to the Central Agency. After successful registration the eligible entity may obtain REC through the 'process of issuance of REC' by Central Agency. The detailed procedures for Accreditation, Registration, Issuance and Redemption of REC can be downloaded from various websites.

  20. Where and how are RECs traded?

    RECs are tradable only at the Power Exchanges at the market determined price. REC trade at IEX is done on the last Wednesday of every month. The present applicable floor and forbearance price for REC trading are as

    REC Floor Price (Rs.) Forbearance Price (Rs.)
    Solar 3500 5800
    Non-Solar 1500 3300
  21. Why RPG Power Trading Company Limited?

    RPG Power Trading Company Limited (RPTCL) is a strategic business unit of RP-Sanjiv Goenka Group. The Group has a current installed capacity of 1858 MW of Power projects besides 600 MW is expected to be commissioned by March 15. RP-Sanjiv Goenka Group has emerged as a pioneer in the Indian Power sector, with a track record of performance, customer care and sustained growth. The Group has a presence in all areas of Power sector viz. Generation (Thermal, Hydro, Solar and Wind), Transmission and Distribution.
    CESC Limited is a flagship company of RP-Sanjiv Goenka Group, India's youngest business Group born in 1820. CESC is a fully integrated Power Utility with its operation spanning the entire value chain: right from mining coal, generating Power, distribution of Power. CESC serve 2.4 million customers within 567 square kilometers of Kolkata and Howrah, delivering safe, cost-effective and reliable energy to its consumers.
    Noida Power Company Limited distributes power in Greater Noida, near Delhi in Uttar Pradesh, which is being developed as an industrial hub and urban settlements. The Company reaches out to a population of about 7 lac spread across hamlets, villages and a new township spanning an area of 335 sq. km

    RP-Sanjiv Goenka Group generation assets:

    CESC Owns and operates four Thermal Power plants generating 1225 MW of Power
    Dhariwal Infrastructure Ltd 600 MW coal-based thermal Power station located in Chandrapur, Maharashtra.
    Haldia Energy Ltd 600 MW coal-based thermal Power station located in Haldia, West Bengal
    Solar 9 MW plant in Kutch, Gujarat
    Wind 24 MW plant in Jaisalmer, Rajasthan

    RPTCL is holding a Category - II Power trading license by Central Electricity Regulatory Commission on 23rd September 2008, and it started its first Power trading transaction on February 2009. RPTCL was incorporated with the objectives of optimizing the Group’s energy assets and bridging the demand supply gap in India by trading Power from other Power generators/ utilities.
    RPTCL has trained and well-experienced manpower to conduct its Power trading operations. The Company’s highly skilled team members are handling all types of trades through bilateral trades and through Power Exchange (IEX). The Company has established excellent relationships with its stakeholders and has dealt with various electricity utilities of States such as Rajasthan, Haryana, Maharashtra, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka etc, and with private discoms of Delhi, Mumbai and Noida.
    RPTCL has also been buying and selling surplus Power from various captive Power plants and independent Power producers in different states of country.
    RPTCL has access to Technical, Managerial and Financial resources of its parent company, and is uniquely equipped to provide an unmatched range of services, customer care and complete payment security for its customers at the most competitive rates. It has domain expertise in all the segments of Power trading whether it is Marketing, Commercial or Operations, supported ably by Finance, Legal and Administrative functions.