Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Q1 FY2020 Earnings Presentation
38 slides from Indian Energy Exchange's earnings presentation, Aug 28, 2019
Slide 1: Indian Energy Exchange filing cover letter
a I EX INDIAN ENERGY EXCHANGE Dated: August 28, 2019 The Manager The Manager BSE Limited National Stock Exchange of India Ltd Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot no C/1 Dalai Street G Block, Bandra Kuria Complex Mumbai- 40000
Slide 2: Investor Presentation Q1 FY 2020
Investor Presentation Q1 FY 2020 For Public Use
Slide 3: Contents
Contents 1 India’s economic roadmap 2 Electricity will drive Indian economic growth 3 Power shift 4 Power markets – imperative to realize GOI vision • Current power market structure • About IEX • Way forward • Financial Performance 5 Summary
Slide 4: Economic Roadmap
Economic Roadmap ; Titi OTTER | ! i itt 1 _-- Py rrremegiial)
Slide 5: Robust economic fundamentals
Robust economic fundamentals • India’s GDP is projected at 6.9% for FY’20 • Government envisions India as a $5tn economy by FY’25 • India to surpass Japan to become the third largest economy by 2025 • Education, Healthcare, Agriculture to the key growth pillars • 17 of 20 world’s fastest growing cit
Slide 6: Electricity will drive Indian economic growth
Electricity will drive Indian economic growth
Slide 7: Electricity as a key input to economic growth
Electricity as a key input to economic growth Contribution to GDP %2 FY’19 (%) • India is: Agriculture, forestry & fishing 16.1 • 3rd largest consumer of electricity Mining & quarrying 2.4 • 3rd largest producer of electricity; and • 5th largest in the world in RE capacity1 Manufacturing 16.4 Constr
Slide 8: Power sector shift
1 need Z | ower sector shift — 3 L= LAA A Z Z Ee ae ere — --
Slide 9: Electricity value chain
Electricity value chain Generation De-licensed Transmission is licensed Distribution is licensed Energy deficit decreased from 10% to 0.7% over Private sector accounts Single largest integrated Financial losses of state the last decade for 46% of the installed network in the world DISCOMs at 1.6bn c
Slide 10: Government envisions power for all
Government envisions power for all Availability Accessibility Affordability 9
Slide 11: Shift towards renewable energy
Shift towards renewable energy Paris Climate Agreement – Renewable energy to constitute 40% of total installed capacity base of 1250 GW Bio-Power 3% Solar 8% Wind Power Solar 10% 20% Small Bio- Solar Power 36% Thermal Hydro 2% 35% 1% Hydro Wind Power Thermal Thermal 13% 12% 53% 63% Nuclear 2% Hydro
Slide 12: Megatrends – 4D
Megatrends – 4D • The rapid deployment of low- • The distribution of small- carbon technologies such as scale generation throughout Decarbonization wind and solar. Decentralization the T&D network. • Outlook: • Outlook: • Renewables will become • RE in general will pose leading energy sources a thre
Slide 13: Power markets – imperative to realize GOI vision
Power markets – imperative to realize GOI vision
Slide 14: Power market structure
Power market structure Long Term Short Term 1,245,317 MUs OTC: Exchanges: Up to 25 years Real Time Intraday to 1 year Intraday – 11 days 11,001,119 67,813 MU 52,252 MU 25,132 MU 88.3% SECTOR OVERVIEW 5.4% 4.2% 2.0% & Exchanges (Only up to 11 days) IMPACT ON POWER EXCHANGE Long-term Power Purchase Ag
Slide 15: Power markets imperative to deliver vision
Power markets imperative to deliver vision Power on Demand Competitive pricing Flexibility Predictability 14
Slide 16: Key market drivers
Key market drivers Growing demand for electricity Enabling Policy and Regulatory framework • Vision to provide electricity to all (Availability, • MoP 5 year vision document emphasizes on deepening the power market Accessibility, Affordability) • Emerging framework • Power on 24x7 basis • Real Time
Slide 17: Markets have immense potential
Markets have immense potential Total Electricity Demand (MU)1 Per Capital Electricity Consumption (KWh)2 12,994 12,74,595 12,13,326 6,940 7,035 6,603 3,927 11,42,928 3,127 2,601 1,149 US France Germany Russia Global China Brazil India Average FY17 FY18 FY19 Expected Electrical Energy Requirement (BU
Slide 18: Global benchmarking
Global benchmarking Exchange market and ST market a % of total demand – India1 Exchange market as a % of total demand – Global2 11.4% 10.3% 10.4% 10.5% 9.3% 91% 49% 47% 3.9% 4.1% 39% 3.6% 34% 3.1% 2.7% 23% 15% FY15 FY16 FY17 FY18 FY19 Share of ST Market in total demand Share of exchanges in total de
Slide 19: IEX has seeded & developed a robust power market
IEX has seeded & developed a robust power market • Market framework for 2003 Exchange operations put in place • IEX commenced 2008 operations • Introduced Term-Ahead 2009 Contracts • Introduced Renewable 2011 Energy Certificates • Introduced Energy 2017 Saving Certificates • Technology Buy out • Ini
Slide 20: We are a leading power exchange in India
We are a leading power exchange in India • High Participation: 6500+ • 4000+ Industries Electricity Cleared Volume (BU) • 56 Discoms (all) • 500+ Generators • 1600+ RE Generators & Obligated 52.2 entities 46.2 • 100+ ESCert Entities 40.5 34.3 • Average daily trade: 142.8 MU (Q1FY20) 28.3 • Exchange
Slide 21: Market Segments
Market Segments Day-Ahead • Delivery for next day Market • Price discovery: Closed , Double-sided Auction Term-Ahead • Intraday: For Delivery within the same day Market • Day Ahead Contingency: Another window for next day • Daily and weekly contracts Renewable • Green Attributes as Certificates Ener
Slide 22: We deliver the national vision
We deliver the national vision Telangana Buy Sell Volume on 15th May, • Working in line with government’s 2019 vision to deliver: • Power for all • On 24*7 basis • Reducing cost of doing 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 business • Increasing ease of doing Sell Sch
Slide 23: High charges deterring open access
High charges deterring open access 8.00 OA Charges (Rs): 7.00 <Rs 2 in 4 States 6.00 Rs 2-3 in 10 States Rs 3-4 in 10 States 5.00 >Rs 4 in 4 States 4.00 3.00 2.00 1.00 0.00 AP MA DNH OD PD WB AP DD CHD HP JK MP UK PB DL GUJ CH RAJ BH KER (EP TL MG KN TN AS HR UP JH H DCL) OA Charges (Rs/kWh) 2.51 3.
Slide 24: Deepen Power Market
Two pronged business strategy Maximize DISCOM and Open Access volume Deepen Power Introduce long duration contracts from 1 day to 365 days Market Cross Border Trade - Nepal, Bhutan, Bangladesh and Myanmar Real time markets and National Open Access Registry – 48 half hourly auctions over the day to e
Slide 25: New Opportunities
Smart Power Procurement New Opport Analytics unities New product development – tech Demand forecasting based Use of block chain and AI To leverage technology & enable next level of optimization and efficiency Source: Company
Slide 26: Robust financial performance
Robust financial performance Focus on operational excellence and cost management 85% 84% 84% 83% 83% 83% 82% 81% 74.2 61.7 41.9 67.8 56.2 37.9 69.7 58.5 39.6 80% Q1 FY 2019 Q4 FY 2019 Q1 FY 2020 Rs. Cr Revenues EBITDA PAT EBITDA Margin Breakup of revenues Q1 FY 2019 Q4 FY 2019 Q1 FY 2020 Transaction
Slide 27: Summary
Summary
Slide 28: Summary
Summary • India to continue being the fastest growing economy • Electricity is a critical input into economic growth • We are on the cusp of shift in the energy mix • Power markets are at nascent stage; potential for growth is immense • Growing demand for power & conducive policy/regulatory framewor
Slide 29: Thank You
Thank You
Slide 30: ANNEXURES
ANNEXURES
Slide 31: MoP 5-year vision document
MoP 5-year vision document • Improve transmission capacity utilization by introducing physical capacity trading and financial transmission trading • Improve distribution sector through developing mechanism for unbundling distribution companies into wires and supply business & implementation of analy
Slide 32: Installed Generation Capacity of India (GW)
Installed Generation Capacity of India (GW) 356 344 327 298 69 78 57 268 39 32 45 45 44 43 7 7 41 6 7 26 26 26 26 6 24 185 192 197 201 165 FY 15 FY 16 FY 17 FY 18 FY 19 Coal Gas & Diesel Nuclear Hydro RES
Slide 33: Total Generation in India (GW) FY 2019
Total Generation in India (GW) FY 2019 Installed Generation Feasible Possible Generation Category PLF(%) Capacity (MW) (BUs) PLF(%) (BUs) Coal 200,705 61 1,022.3 80 1407 Gas 24,937 23 49.8 25 55 Diesel 638 2 0.1 0 0 Hydro 45,399 34 134.9 40 159 Nuclear 6,780 64 37.8 80 48 RE 77,642 19 126.0 20 136 T
Slide 34: IEX v/s Bilateral comparison
IEX v/s Bilateral comparison IEX Cleared Volumes (BU) 28.3 34.3 40.5 46.2 52.2 13.0 2.10 1.37 0.74 TAM 0.33 0.22 39.78 44.84 50.06 DAM 28.12 33.96 1.01 11.99 FY15 FY16 FY17 FY18 FY19 Q1 FY20 60 8 IEX v/s Bilateral Volumes (BU) and Prices 50 51 50 45 4.74 40 6 40 4.32 4.23 36 4.34 41 36 294.27 35 35
Slide 35: Industrial consumers on IEX
Industrial consumers on IEX Registered open Access Consumers Open Access consumers spread across - By States (As on 30th June,19) industries1 (As on 30th June,19) Others, 298 Haryana, 476 287 237 Punjab, 428 173 Tamil Nadu, 885 Rajasthan, 332 114 107 74 Uttarakhand, 135 Karnataka, 256 Gujarat, 540 A
Slide 36: Cost optimization - Punjab DISCOM
Cost optimization - Punjab DISCOM Sold 1430 Mus during Sep/Oct’ 18 @ Rs.5.74/u. Sell Additional revenue of Rs.350 Cr. Purchased 385 Mus from exchange at average Buy rate of Rs.3.09 per unit resulting into savings of Rs.19 Cr. Back down/reduced the power drawn from private Replace thermal plants and
Slide 37: DEEP v/s IEX
DEEP v/s IEX Case: Maharashtra 36
Slide 38: DEEP v/s IEX
DEEP v/s IEX ✓ Telangana discoms Tender for 1000 MW RTC power for period 1st Jul, 2019 to 31st Mar, 2020. ✓ The prices discovered at DEEP- portal are ranging from Rs. 5.48 - Rs. 5.80 per unit, much higher in comparison to IEX prices. Cost if Cost if L1 Price Power IEX Avg 10% purchased Energy as pur
Indian Energy Exchange — Q1 FY2020 Earnings Presentation on 6ix