Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Q3 FY2023 Earnings Presentation
46 slides from Indian Energy Exchange's earnings presentation, Jan 20, 2023
Slide 1: Cover letter to BSE and NSE
Dated: January 20, 2023 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 Dalal Street G Block, Bandra Kurla Complex Mumbai- 400001 Bandra (E), Mumbai-400 051
Slide 2: Investor Presentation – Q3FY'23
Investor Presentation – Q3FY’23
Slide 3: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 2
Slide 4: Sector in Transition
Sector in Transition Shifting Energy Mix Deployment of low-carbon Decarbonisation technologies - wind and solar % Renewable 50% 41% 33% Small-scale generation Decentralisation across T&D network FY 2010 FY 2023* FY 2030 Installed Capacity Empowered consumers - Democratisation economic power shift ➢
Slide 5: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 4
Slide 6: Electricity Value Chain
Electricity Value Chain Generation Transmission Distribution & Consumption Energy Transition World’s largest network Reforms Underway Installed Capacity As on FY 2030 ➢ Inter-reg. trans. Cap.: 112.3 GW ➢ Avg. AT & C Losses: 21% presently 31st CEA to 15% Dec’22 Proj. ➢ 4.63 Lakh CKM of trans. lines ➢
Slide 7: Installed capacity has grown faster than demand
Installed Capacity has grown at a faster pace compared to the Demand 160 174 199 224 243 275 305 327 344 356 371 382 399 410 141 157 168 Capacity (GW) 102 114 123 133 80 89 CAGR – 7% 67 70 56 63 52 211 218 223 226 231 235 236 236 131 152 168 189 102 113 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'1
Slide 8: Installed Capacity = 410 GW
Installed Capacity = 410 GW Capacity by Source Capacity by Ownership 47 GW 7 GW Hydro Nuclear Central State 99 GW 105GW 121 GW Renewable 236 GW Thermal Private 207 GW Data as on 31st Dec 2022 7
Slide 9: Sector Construct
Sector Construct Long-Term (86%) Long-term (89%) Short-Term (14%) Total Power Generation FY’22: 1,374 BU Bilateral: Exchanges: Up to 25 years DSM Less than 1 year Real Time (1hour) – 90 days 85.9% 4.5% 7.7% 1.9% Exchanges (Up to 90 days) Bilateral & Banking ➢ Day Ahead Market, Real Deviation Settlem
Slide 10: Fast Growing Exchange Markets
Fast Growing Exchange Markets Exchanges (BU) Bilateral (BU) DSM (BU) CAGR: 20.4% CAGR: 1.7% CAGR: 1.0% 101 56 67 58 60 80 25 25 56 44 48 54 24 23 23 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Source: CERC 9 Driven by competition and flexible procurement, the Exchange
Slide 11: Immense Potential to Deepen India's Power Market
Immense Potential to Deepen India’s Power Market 91% 49% 47% 39% 34% 23% 15% 8% Nordpool Germany UK Netherlands Switzerland Belgium France India Source: CRISIL Study Markets are in the range of 30-80% in developed economies. At 7.7%, India has an opportunity to deepen the power market. 10
Slide 12: Exchanges Share in Short Term Market
Exchanges Share in Short Term Market Exchange Market and ST Market - % of Total Consumption – India Share of 30.2% 34.4% 37.2% 36.9% 41.2% 54.5% 54.3% 55.7% exchanges in short-term market 14.1% 11.7% 11.8% 11.0% 9.9% 9.7% 9.9% 7.7% 6.5% 4.3% 4.5% 3.3% 3.7% 3.0% FY16 FY17 FY18 FY19 FY20 FY21 FY22 Sha
Slide 13: Electricity Growth Drivers
Electricity Growth Drivers India is placed as the most promising economy on the global map: ➢ Industrialization 2,280 ✓ High GDP growth of about 8% expected to drive electricity 1,907 ✓ Core sector, traction, EV, cooking will drive electricity consumption 1,695 1,513 ➢ Rapid urbanization/ Rural Elec
Slide 14: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 13
Slide 15: India's Premier Technology-led Energy Marketplace
India’s Premier Technology-led Energy Marketplace ➢ Nation wide, automated and transparent trading Robust Ecosystem platform for physical delivery of electricity, renewables & certificates ➢ Commenced operations in 2008; CERC regulated 7,300+ 4,400+ 1,500+ Registered Commercial & RE Generators & ➢ P
Slide 16: Benefitting Power Sector….and the Nation
Benefitting Power Sector….and the Nation ➢ Provides benchmark prices for all electricity transactions ➢ Transparent Mechanism for Price Discovery ➢ High liquidity on exchange has ensured lowest cost and assured supply Truly benefited Indian Power Sector Generation Transmission Distribution ➢ Lower p
Slide 17: Our Values
NIEX Our Values <Oy, 24X7 Power Transparency Flexibility in Power Procurement Competitive Price Payment Security Cost Saving 16
Slide 18: Market Segments
Market Segments Intraday Market & Contingency Market Segment Since Jul’15 Integrated Day Ahead Market Intraday Market : hourly and or 15-minute contracts on same day on DAM since Jun’08 rolling basis Delivery for next day Day-Ahead Contingency- 24-hourly and or 15-minute contracts on Price d
Slide 19: Product Mix
Product Mix FY22 FY23 Till Dec’22 Certificates Certificates TAM 6% 6% TAM 5% 10% DAM 52% RTM 20% RTM DAM 26% Green 64% 5% Green 6% Total Volume: 102 BUs Total Volume: 70.7 BUs Till Dec’22 Matching Closed, Double- sided Open Auction -Uniform Price Continuous Reverse Auction Auction Step Matching Exis
Slide 20: IEX Market Share Product Wise
IEX Market Share Product Wise 9 M FY-23 Q3 FY23 70. 0 66.4 120 .0% 99.5% 100.0% 100.0% 100.0% 60. 0 84.8% 88.6% 92.2% 85.0% 100 .0% 50. 0 80. 0% 24.9 40. 0 36.7 58% 55.2% 53.4% 49.2% 60. 0% 14.4 30. 0 20. 0 18.2 40. 0% 6.6 20. 0% 5.4 2.8 1.3 0.8 10. 0 4.1 0.5 DAM RTM TAM Green LDC Total 0.0 0.0 % DA
Slide 21: Supply Side Constraints Leading to High Price Discoveries
Supply Side Constraints Leading to High Price Discoveries Recently Geo-Political factors have impacted international coal and electricity prices worldwide HBA Index ($/T) 50 E Auction Coal Qty (MT) 47 800 % E -auction Prices Above 666% Notified Price (%) 45 700 % 400 324 319 322 319 331 308 40 600 %
Slide 22: Coal Supply & Inventory
Coal Supply & Inventory ➢ Coal production increased by 16% YoY and dispatch to power sector increased by 10.7% YoY in first 9 months of this fiscal. Coal Inventory at Power Plant 250 12 12 13 14 12 ➢ Captive mines production increased by 22% YoY in first 9 months 10 11 11 12 200 9 9 203 205 10 ➢ Coa
Slide 23: Price - Volume Outlook
Price - Volume Outlook ➢ Easing supply constraints ✓ Improvement in coal production and higher inventory will result in increase in sell by both Discoms & IPPs ✓ IPPs sell will provide Round the Clock supply resulting in better availability & lower prices in peak hours ✓ Lower prices will lead to in
Slide 24: Customer Centric Technology and Product Strategy
Customer Centric Technology and Product Strategy CUSTOMER CENTRIC EFFICIENT STATE OF THE ART ➢ Digital Experience ➢ Comprehensive Product Portfolio ➢ National Open Access Registry ✓ Secure Web Access ✓ TAM contracts upto 90 days ✓ Integration of NOAR ✓ Integrated bids across segments ✓ Green Market
Slide 25: Robust Financial Performance
Robust Financial Performance Consolidated Financials Rs Cr Breakup of standalone Q3FY22 Q2FY23 Q3FY23 revenues (%) 130.8 112.1 113.8 117.4 97.6 100.4 80.7 71.2 77.2 Transaction Fees 86% 80% 81% Admission and Annual Fees 4% 4% 4% Q3FY22 Q2FY23 Q3FY23 356.0 344.5 Other Income 10% 16% 15% 305.7 293.9 2
Slide 26: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 25
Slide 27: Indian Gas Exchange (IGX)
Indian Gas Exchange (IGX) VISION To lead India’s transition towards a gas-based economy by architecting next generation solutions for natural gas trading and access 01 1st natural gas trading exchange 02 Automated platform with cutting edge technology Indigenous 03 Efficient & transparent market dri
Slide 28: IGX – Key Highlights
IGX – Key Highlights Q3FY23 Business Updates Strategic Partners Total Volume 24.4 Million MMBtu YoY growth (%) 568% Total number of trades 914 No. of members 37 Active clients 120+ Domestic Gas Ceiling Price ➢ Commenced trading on 23rd May’22 ➢ Traded Volume: 16 Million MMBtu ➢ India’s First Gas Ind
Slide 29: GIXI - IGX Gas Index
GIXI - IGX Gas Index Launched on 19th December 2022 GIXI represents volume weighted average price for all gas traded on any day (excluding domestic ceiling price gas) Helps the market participants to know inland gas prices and to take suitable decisions GIXI is the precursor for the Gas Futures whic
Slide 30: Opportunity
Opportunity Growth in Gas Demand will lead to opportunities for Gas Exchange & Other Stakeholders ➢ Government’s vision of increasing share of Natural Gas in total energy basket from ~6.3% to 15% by 2030 will increase gas consumption in the economy from current 160 MMSCMD to 500+ MMSCMD ➢ With compl
Slide 31: Key Gas Market Enablers
Key Gas Market Enablers Inclusion of Natural Gas under GST Implementation of Unified Tariff Regulations by PNGRB Implementation of New Access Code Regulations Declaration of CGD Exclusivity (Open Access within CGD Areas) Incorporation of TSO 30
Slide 32: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 31
Slide 33: International Carbon Exchange (ICX)
International Carbon Exchange (ICX) ➢ IEX formed a wholly owned subsidiary – ICX, in December 2022 to promote voluntary carbon market; second diversification initiative after successful launch of IGX in 2020. ➢ Will help India achieve its target of reducing the emission intensity of its GDP by 45% b
Slide 34: In this presentation
In this presentation: Sector in Transition Electricity Value Chain IEX: Who We Are Indian Gas Exchange (IGX) International Carbon Exchange (ICX) Way Forward 33
Slide 35: Create Customer Delight for Each Interaction
Create Customer Delight for Each Interaction ➢ Ease of Bidding ➢ Digital Registration Bidding ➢ Multiple Products ➢ Frictionless ➢ Efficient Price Discovery ➢ Quick Customer ➢ Data Insights Interactions ➢ Automated ➢ On-Time Payment ➢ Real-Time Communication ➢ Robust Risk Management Financial Schedu
Slide 36: Transitioning Towards a Futuristic Tech Architecture
Transitioning Towards a Futuristic Tech Architecture Automated ➢ Digital Inside Manual Workflow ➢ Open API Integration Digital Mesh ➢ Automation Modular ➢ Service Oriented Architecture Monolithic ➢ Automated Bank Integration Digital Twins ➢ Web-based Portal Desktop-based All Platforms ➢ Power Market
Slide 37: Policy Advocacy to Enhance Liquidity in the Spot Market
Policy Advocacy to Enhance Liquidity in the Spot Market ➢ Pool based CfD mechanism for RE capacity addition through the market ➢ Merchant RE capacity addition – 25% merchant capacity in all PPAs ➢ Unallocated power of the Central Generating Stations should be sold through exchange ➢ No renewal of ex
Slide 38: IEX: Growth Drivers (1/2)
IEX: Growth Drivers (1/2) Growth from ➢ RTM: June’20 recently ➢ Green Markets: GTAM launched in Aug’20, GDAM launched in Oct’21 launched ➢ Cross Border: April’21 products ➢ Term Ahead Market Up to 3-Months in June’22 ➢ HP-DAM and Ancillary Market ➢ Launch of Derivatives will provide price hedging op
Slide 39: IEX: Growth Drivers (2/2)
IEX: Growth Drivers (2/2) Favorable Policy ➢ Spot markets share to increase significantly as per Draft NEP 2021 and Regulatory ➢ GNA Regulation, Sharing Regulations, Grid Code, Late Payment Surcharge Rules, and sale of un- Initiatives requisitioned power on exchanges will help deepen the power marke
Slide 40: New Business Initiatives
New Business Initiatives Renewable Through Markets – Merchant RE ➢ IEX has worked with SECI & Deloitte to conduct feasibility study of Market based models for RE capacity addition ➢ The study results shows that market based RE models can command an IRR of 18%-20% V/s SECI bid projects having IRR ~ 1
Slide 41: Future Opportunities
Future Opportunities Virtual PPA’s ➢ VPPA is a financial instrument used by buyers and sellers to hedge cost of electricity ➢ The buyer is not obligated to undertake direct physical delivery of electricity from the seller ➢ The seller sells the power generated at Exchange & undertakes realization fr
Slide 42: Thank you
Thank you @IndianEnergy @indian-energy @IEX_India_ ExchangeLtdIEX -exchange-limited Phone: +91-120 4648100 Email: contact@iexindia.com Website: www.iexindia.com 41
Slide 43: IEX Announces Unaudited Financial Results for Q3 FY2023
INDIAN ENERGY EXCHANGE (IEX) ANNOUNCES ITS UNAUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED 31st DECEMBER 2022 ● IEX ACHIEVES 24.2 BU OVERALL VOLUME IN Q3 FY’23 ● ELECTRICITY VOLUME AT 23 BU, GROWS 9% QoQ ● CONSOLIDATED PAT RISES 8.4% QoQ ● REAFFIRMS COMMITMENT TO SUSTAINABILITY- FORMS INTERN
Slide 44: Business and Financial Performance Highlights
BUSINESS AND FINANCIAL PERFORMANCE HIGHLIGHTS During Q3 FY23, the Exchange achieved electricity volumes of 23 BU, growth of 9% QoQ. However, electricity volumes declined 2% on YoY basis as compared to Q3 FY22. Volumes were impacted largely due to supply side constraints, led by high prices of e- auc
Slide 45: Press release continued
quarter, profit after tax at Rs 12.76 Cr. witnessed a growth of 427% on QoQ basis and 1437% on YoY basis. In line with the company’s diversification strategy, during this quarter, IEX incorporated a wholly owned subsidiary - International Carbon Exchange (ICX) to leverage opportunities in the volunt
Slide 46: About IEX and contact details
and environment management since August 2016. The Exchange is a publicly listed company with NSE and BSE since October 2017 and is approved and regulated by Central Electricity Regulatory Commission since 27 June 2008. For further details, log on to: www.iexindia.com Ms. Aparna Garg Mr. Vineet Harla
Indian Energy Exchange — Q3 FY2023 Earnings Presentation on 6ix