Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Investor Presentation (August 2023)
45 slides from Indian Energy Exchange's investor presentation, Aug 7, 2023
Slide 1: Exchange filing cover letter for Q1 FY2024 investor presentation
Dated: August 07, 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 – Q1 FY'24
Investor Presentation – Q1 FY’24 Accelerating India’s Sustainable Energy Transition
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% 42% 33% Small-scale Generation Decentralisation Across T&D Network FY 2010 FY 2023 FY 2030 Installed Capacity Empowered Consumers - Economic Democratisation Power Shift ➢ 1
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: Expected to 30th CEA have declined to 13.5% for FY23 Jun’23 Proj. ➢ 4.72 Lak
Slide 7: Generation (BU)
Installed capacity has grown at faster pace compared to demand 160 174 199 224 243 275 305 327 344 356 371 382 399 422 141 157 172 177 Capacity (GW) 102 114 123 133 80 89 CAGR – 7% 67 70 56 63 52 211 218 223 226 231 235 236 237 238 131 152 168 189 102 113 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY
Slide 8: Installed Capacity = 422 GW
Installed Capacity = 422 GW Capacity by Source Capacity by Ownership 47 GW 7 GW Hydro Nuclear Central State 101 GW 106 GW 130 GW 238 GW Renewable Thermal Private 215 GW Data as on 30th June 2023 7
Slide 9: Sector Construct
Sector Construct Long-Term (87%) Long-term (89%) Short-Term (13%) Total Power Consumption FY’23: 1,504 BU Bilateral: Exchanges: Up to 25 years DSM Less than 1 year Real Time (1hour) – 90 days 87% 4% 7% 2% Bilateral & Day Ahead Market, Real Banking Deviation Settlement/ Long-term PPA Time, Green Mark
Slide 10: Exchange Markets Growing Fastest
Exchange Markets Growing Fastest Exchanges (BU) Bilateral (BU) DSM (BU) CAGR: 14% CAGR: 2.5% CAGR: 1.3% 101 103 56 67 58 60 65 80 26 44 25 25 48 54 56 24 23 23 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 Source: CERC, MMR Mar’23 Driven by competition and
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% 7% Nordpool Germany UK Netherlands Switzerland Belgium France India Note: Data for India till Mar’23 Source: CRISIL Study Markets are in the range of 30-80% in developed economies. At 7%, India has an opportunity to deepen
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% 53.0% exchanges in short-term market 13.6% 12.9% 11.5% 11.5% 10.6% 10.5% 10.7% 10.7% 7.4% 6.3% 6.8% 4.0% 4.2% 4.4% 3.2% 3.6% FY16 FY17 FY18 FY19 FY20
Slide 13: Electricity Growth Drivers
Electricity Growth Drivers India is placed as the most promising economy on the global map 2,280 ➢ Industrialization 1,907 ✓ High GDP growth of about 7% expected to drive electricity 1,695 ✓ Core sector, traction, EV, cooking will drive electricity 1,504 consumption 1,374 1,284 1,271 ➢ Rapid urbaniz
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 7,500+ 4,600+ 1,800+ 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 Integrated Day Ahead Market DAM since Jun’08 Intraday Market & Contingency Market Segment Delivery for next day; 15 min. contracts, Daily trade Since Jul’15 Price discovery: Closed , Double-sided Auction Intraday Market : hourly and or 15-minute contracts on same day on G-DAM s
Slide 19: IEX Product Mix
IEX Product Mix FY23 Certificates Q1 FY24 6% Certificates TAM TAM 6% 11% 12% DAM DAM RTM 53% 50% 25% RTM 29% Green 5% Green 3% Total Volume: 96.8 BU Total Volume: 25.1 BU Matching Closed, Double- sided Open Auction -Uniform Price Continuous Reverse Auction Auction Step Matching Existing Products DAM
Slide 20: Supply Side Constraints Easing, Coal Auction Premium Falling
Supply Side Constraints Easing, Coal Auction Premium Falling Indonesian 4200 GAR Coal Prices E-auction Prices above Notified Price (%) 120 425 100 85 345 80 73 74 72 290 69 270 232 60 54 106 90 89 85 40 75 78 182 183 61 146 137 20 0 Jan Feb Mar Apr May Jan Feb Mar Apr May Jun 2022 2023 2022 2023 ➢ I
Slide 21: Coal Supply Up
Coal Supply Up ➢ Q1 FY24 coal production is higher by 8.6% YoY at 223.4 million tonnes ➢ Government focused on increasing supply for plants under long term PPAs 100% FDI allowed for commercial mining ➢ Mines and Minerals Act, 1957 amended to allow sell up to 50% of their annual production after meet
Slide 22: Policy Measures to Combat Power Crisis Situation
Policy Measures to Combat Power Crisis Situation Measure - 6 Measure - 1 Launch of High-Price DAM Govt directive to coal- market helped imported coal and gas-based power plants to 1 based plants: No Planned Outages April to May 23 sell expensive power 6 Policy Measure - 2 Measures to Mitigate 2 Sect
Slide 23: All these led to prices on the Exchange Cooling
All these led to prices on the Exchange Cooling ➢ In Q1 FY’24 with supply side constraints easing, average price of power lowered further to Rs.5.17 kWh/unit; a decline of nearly 34% over Q1’FY23 ➢ Lower price provides optimization opportunities for State Discoms & OA Consumers 12 IEX Price 10.1 10
Slide 24: Future of Electricity Market in India: Key Recommendations
Future of Electricity Market in India: Key Recommendations Short Term Medium Term Long Term Improve Efficacy of Day Ahead RE Participation in the Market Introduction of Standardised Market: Gradual transition to through CfD Mechanism: Mandate Exchange-Based Capacity market-based dispatch of electric
Slide 25: 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 26: Robust Financial Performance of IEX
Robust Financial Performance of IEX Consolidated Financials Rs Cr Breakup of standalone Q1FY23 Q4FY23 Q1FY24 revenues (%) 484.4 474.1 417.0 409.5 308.6 305.9 Transaction Fees 82% 79% 78% Admission and Annual Fees 5% 4% 4% FY22 FY23 Total Revenue EBITDA PAT Other Income 13% 17% 18% 129.6115.7 127.4 1
Slide 27: 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 ✓ High Price Day Ahead Market (HP-DAM) ✓ Integrated bids across segments ✓ Integration of NOAR ✓ Lon
Slide 28: Launch of IEX Academy; Price Index - PowerX
Launch of IEX Academy; Price Index - PowerX ✓ Launched in June to create pool of skilled professionals for capacity building in the power market ✓ Customised certification courses to develop skills and expertise in Electricity Markets across topics such as power sector policies, regulatory framework
Slide 29: 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 29
Slide 30: 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 31: IGX – Key Highlights
IGX – Key Highlights Q1 FY24 Business Updates Strategic Partners Total Volume 4.26 Million MMBtu YoY (%) -9% Total number of trades 163 No. of members 40 Active clients 200+ Domestic Gas Ceiling Price ➢ Commenced trading on 23rd May’22 ➢ FY’23 Traded Volume: 50.9 Million MMBtu ➢ India’s First Gas In
Slide 32: GIXI - IGX Gas Index
GIXI - IGX Gas Index 30-06-2023 Month ₹/ MMBTU $/ MMBTU % Change Jun-23 ₹ 920 $11.2 - Jul-23 ₹ 920 $11.2 -1.1% Month Delivery Point ₹/ MMBTU $/ MMBTU % Change Best Buy Best Sell Western Hub Ankot AN 920 11.2 - - - Launched on 19th December 2022 Hazira HZ 800 9.8 - - - Jun-23 Dahej DH 810 9.9 - - - M
Slide 33: 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 nearly 160 MMSCMD to 500+ MMSCMD ➢ With comple
Slide 34: Key Gas Market Enablers
Key Gas Market Enablers Inclusion of Natural Gas under GST Incorporation of TSO Implementation of New Access Code Regulations Declaration of CGD Exclusivity (Open Access within CGD Areas) Policy Steps to Accelerate Role of Natural Gas in India’s Economy (Natural Gas usage over polluting fuels) 33
Slide 35: 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 35
Slide 36: 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 37: 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 37
Slide 38: Creating Customer Delight for Each Interaction
Creating 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 Sche
Slide 39: 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 40: Enhancing Liquidity in the Spot Market
Enhancing 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 existing PPAs after
Slide 41: IEX: Growth Drivers (1/2)
IEX: Growth Drivers (1/2) ➢ RTM: June’20 Growth from ➢ Green Markets: GTAM launched in Aug’20, GDAM launched in Oct’21 recently ➢ Cross Border: April’21 launched ➢ Term Ahead Market Up to 3-Months in June’22 products ➢ HP-DAM (High Price-DAM): March’23 ➢ Ancillary Market launched: June’23 ➢ RE capac
Slide 42: IEX: Growth Drivers (2/2)
IEX: Growth Drivers (2/2) ➢ Spot markets share to increase significantly as per Draft NEP 2021 Favorable Policy ➢ GNA Regulation, Sharing Regulations, Grid Code, Late Payment Surcharge Rules, and sale of un- and Regulatory requisitioned power on exchanges will help deepen the power markets Initiativ
Slide 43: 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 44: Future Opportunities
Future Opportunities Virtual PPA’s Contracts for Difference (CfDs) ➢ Financial instrument used by buyers and sellers to hedge cost ➢ CfD model beneficial for RE generators, as it provides long- of electricity term stable price to mitigate risks associated with project ➢ Buyer not obligated to undert
Slide 45: Thank you
Thank you @IndianEnergy @indian-energy @IEX_India_ ExchangeLtdIEX -exchange-limited Phone: +91-120 4648100 Email: contact@iexindia.com Website: www.iexindia.com 44
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