Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Q3 FY2024 Earnings Presentation
43 slides from Indian Energy Exchange's earnings presentation, Jan 25, 2024
Slide 1: Cover letter to stock exchanges on Q3 FY24 results
Dated: January 25, 2024 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 – Q3 FY'24
Investor Presentation – Q3 FY’24
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 FY 2010 FY 2023 FY 2030 Empowered Consumers - Economic Democratisation Power Shif
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: FY’21 – 22.3%; 31st CEA FY’22 – 16.4%; Expected to have Dec’23 Proj. ➢ 4.72
Slide 7: Installed Capacity = 428 GW
Installed Capacity = 428 GW Capacity by Source Capacity by Ownership 47 GW 7 GW Hydro Nuclear State Central 102 GW 106 GW 134 GW 240 GW Renewable Thermal Private 220 GW Data as on 31st December 2023 6
Slide 8: Sector Construct
Sector Construct Long-Term (86%) Long-term (89%) Short-Term (14%) Total Power Consumption FY’23: 1,504 BU Bilateral: Exchanges: Up to 25 years DSM Less than 1 year Real Time (1hour) – 90 days 86% 5% 7% 2% Day Ahead Market, Real Bilateral & Time, Intraday, Contingency, Banking Term Ahead up to 90 day
Slide 9: Exchange Markets are growing fast
Exchange Markets are growing fast Exchanges (BU) Bilateral (BU) DSM (BU) CAGR: 14% CAGR: 2.5% CAGR: 1.3% 101 103 56 67 58 60 65 24 25 25 26 80 23 23 44 44 54 56 60 14 48 FY18 FY19 FY20 FY21 FY22 FY23 H124 FY18 FY19 FY20 FY21 FY22 FY23 H124 FY18 FY19 FY20 FY21 FY22 FY23 H124 Source: CERC, MMR Reports
Slide 10: 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 Sep’23 Source: CRISIL Study Markets are in the range of 30-80% in developed economies. At 7%, India has an opportunity to deepen
Slide 11: 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% 41.2% 51.0% exchanges in short-term market 13.6% 14.0% 12.9% 11.5% 11.5% 10.6% 10.5% 10.7% 10.7% 7.4% 7.1% 6.3% 6.8% 4.0% 4.2% 4.4% 3.2% 3.6% FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1F
Slide 12: 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 13: 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 12
Slide 14: India's Premier Technology-led Energy Marketplace
India’s Premier Technology-led Energy Marketplace ➢Nation wide, automated and transparent Robust Ecosystem trading platform for physical delivery of electricity, renewables & certificates 7,600+ 4,800+ 1,800+ ➢Commenced operations in 2008; CERC Registered Commercial & RE Generators & participants In
Slide 15: 15 Years of Servicing India's Electricity Marketplace
15 Years of Servicing India’s Electricity Marketplace 14
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 Intraday Market & Contingency Market Segment DAM since Jun’08 Since Jul’15 Delivery for next day; 15 min. contracts, Daily trade Intraday Market : hourly and or 15-minute contracts on same Price discovery: Closed , Double-sided Auction day on rolling
Slide 19: IEX Product Mix
IEX Product Mix 9M FY23 9M FY24 Certificates 6% Certificates TAM 7% TAM 10% 14% DAM 48% DAM RTM 52% 26% RTM 28% Green Green 6% 3% Total Volume: 70.7 BU Total Volume: 79.9 BU Cumulative volumes in the DAC market in Q1’24 and Q2’24 were nearly 5.0 BUs, which have fallen off to 0.4 BUs in Q3’24 and shi
Slide 20: Supply Side Constraints Easing
Supply Side Constraints Easing Indonesian 4200 GAR Coal Prices E-auction Prices above Notified Price (%) Coal Inventory at Power Plants 106 425 14 14 14 14 14 14 14 13 13 13 90 89 86 92 89 90 345 357 12 85 85 83 11 7573 74 78 270 290 290 312 276 288 10 72 69 242 241 9 61 59 232 8 54 58 58 52 50 52 1
Slide 21: Leading to Reduction in Exchange Prices
Leading to Reduction in Exchange Prices 12 IEX Price 10.1 10 8 6.8 6.7 6.9 6.5 6.5 6.2 6.2 5.4 5.6 5.4 5.4 5.4 6 5.2 5.2 4.6 4.7 4.5 4.6 3.8 3.9 4 2 0 DAM MCP (Rs./kWh) ➢ While supply side has been easing; power demand has kept elevated since Q2, softening in Nov’23 and Dec’23. ➢ Average price of po
Slide 22: Robust Financial Performance of IEX
Robust Financial Performance of IEX Consolidated Financials Rs Cr Breakup of standalone Q3FY23 Q2FY24 Q3FY24 revenues (%) 401.6 344.5 346.0 293.9 254.1 217.5 Transaction Fees 82% 78% 78% Admission and Annual Fees 4% 4% 4% 9MFY23 9MFY24 Other Income 14% 18% 18% Total Revenue EBITDA PAT 133.0 141.2 11
Slide 23: Customer Centric Technology and Product Strategy
Customer Centric Technology and Product Strategy CUSTOMER CENTRIC EFFICIENT STATE OF THE ART ➢ Digital Experience ➢ Automation ➢ National Open Access Registry ✓ Secure Web Access ✓ Auto Carry Forward of Uncleared Bids ✓ Integrated bids across segments ✓ Seamless DC-DR Transition to ensure ✓ Integrat
Slide 24: 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 25: 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 26: Launch of IEX Academy; PowerX and EnergX
Launch of IEX Academy; PowerX and EnergX ✓ Launched in June to create pool of skilled professionals for capacity building in the power market. Nearly 250 enrollments across the sector in first 3 months. ✓ Certification courses to develop skills and expertise in Electricity Markets across topics such
Slide 27: 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 26
Slide 28: 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 03 Efficient & transparent market driven price d
Slide 29: IGX – Key Highlights
IGX – Key Highlights Q3 FY24 Business Updates Strategic Partners Total Volume 8.4 Million MMBtu YoY (%) -65% Total number of trades 319 No. of members 44 Registered Clients 180+ Domestic Gas Ceiling Price ➢ Commenced trading on 23rd May’22 ➢ Total Traded Volume: Since May’22 – 93.9 Million MMBtu: FY
Slide 30: 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) GIXI represents prices for all hubs; for regional hubs will be named as GIXI West etc. For months, named as GIXI-Jan23 etc. Helps mar
Slide 31: Opportunity
Opportunity Growth in Gas Demand will lead to opportunities for Gas Exchange Going Forward ➢ One Nation One Gas Grid by 2030 ➢ Introduction of Dhamra and ➢ Government’s vision of increasing share of Natural Gas in total energy basket from Chahra Delivery Points ~6.3% to 15% by 2030 will increase gas
Slide 32: 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) 31
Slide 33: 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 32
Slide 34: 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. Ministry of ➢ Will help India achieve its target of reducing the emission intensity of its
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 34
Slide 36: IEX: Growth Drivers (1/5)
IEX: Growth Drivers (1/5) ➢ CERC implemented the Indian Electricity Grid Code; the Sharing of Inter-State Transmission Charges Regulations; and GNA Regulations on 1st October 2023. o Under GNA Regulations, transmission charges in collective transactions will be applicable only for buy quantum more t
Slide 37: IEX: Growth Drivers (2/5)
IEX: Growth Drivers (2/5) ➢ CERC issued order on increasing frequency of REC auctions on power exchanges to twice a month and allowed fungibility of different type of RECs. Consequently, REC volume would increase going forward. ➢ MoP has provided repowering and life extension for wind power projects
Slide 38: IEX: Growth Drivers (3/5)
IEX: Growth Drivers (3/5) ➢ Electricity consumption grew by 9% in FY’23; FYTD’24 higher by 8.0%; expected to further increase by Demand for 6% in next 7 years Electricity ➢ CEA expects power demand to soar above 256 GW in FY’25 ➢ Government highlights need for thermal capacity addition to meet incre
Slide 39: IEX: Growth Drivers (4/5)
IEX: Growth Drivers (4/5) ➢ RTM: June’20 ➢ Green Markets: GTAM launched in Aug’20, GDAM launched in Oct’21 Growth from ➢ Cross Border: April’21 recently ➢ Term Ahead Market Up to 3-Months in June’22 launched products ➢ HP-DAM (High Price-DAM): March’23 ➢ Ancillary Market launched: June’23 ➢ HP-TAM:
Slide 40: IEX: Growth Drivers (5/5) - Future Opportunities
IEX: Growth Drivers (5/5) - Future Opportunities Virtual PPA’s ➢ Financial instrument used by buyers/sellers to hedge electricity cost Contracts for Difference (CfDs) ➢ Buyer not obligated to undertake direct physical delivery of ➢ CfD model beneficial for RE generators, provides long-term electrici
Slide 41: Thank you
Thank you @IndianEnergy @indian-energy @IEX_India_ ExchangeLtdIEX -exchange-limited Phone: +91-120 4648100 Email: contact@iexindia.com Website: www.iexindia.com 40
Slide 42: IEX Announces Unaudited Financial Results for Quarter Ending December 31, 2023
INDIAN ENERGY EXCHANGE (IEX) ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDING DECEMBER 31, 2023 IEX REPORTS 28.3 BU OVERALL VOLUME IN Q3 FY24, 16.8% GROWTH YOY. REVENUE FOR Q3FY24 STANDS AT INR 141.2 CRORE, MARKING 20.3% YOY INCREASE. STANDALONE PAT FOR Q3 FY24 STANDS AT INR 89.3 C
Slide 43: Press release continuation: improved supply scenario and regulatory developments
This improved supply scenario resulted in increased sell liquidity since November’23. Sell bids in collective auctions increased by 25% YoY in November 2023 and 18% YoY in December 2023, which led to an easing of prices on the exchange. During Q3 FY'24, the average market clearing price in the DAM s
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