Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Q2 FY2023 Earnings Presentation
43 slides from Indian Energy Exchange's earnings presentation, Oct 21, 2022
Slide 1: Exchange filing cover letter for Q2 FY23 results
Dated: October 21, 2022 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 Q2FY'23
Investor Presentation Presentation – Q2FY’23 1
Slide 3: Disclaimer
Disclaimer I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are predictive in nature, depend upon or refer to future events or conditions, based on current expectations of t
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I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE In this presentation: Sector in transition Electricity value chain IEX: Who we are IGX Way forward 3
Slide 5: Sector in transition
Sector in transition I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Shifting Energy Mix Deployment of low-carbon Decarbonisation technologies - wind and solar % Renewable 50% 40% 33% Small-scale generation Decentralisation across T&D network FY 2010 FY 2023* FY 2030 Installed Capacity Empo
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I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE In this presentation: Sector in transition Electricity value chain IEX: Who we are IGX Way forward 5
Slide 7: Electricity Value Chain
Electricity Value Chain I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Generation Transmission Distribution & Consumption Energy Transition World’s largest network Reforms Underway Installed Capacity As on FY 2030 ➢ Inter-reg. trans. Cap.: 113 GW ➢ Avg. AT & C Losses: 21% presently 30th CE
Slide 8: Generation: installed capacity growth vs demand
Installed capacity has grown at a faster pace compared to I EX INDIAN ENERGY EXCHANGE the demand INNOVATION TECHNOLOGY FUTURE 224 243 275 305 327 344 356 371 382 399 408 141 157 165 Capacity (GW) 102 114 123 133 80 89 10 Yr CAGR – 7% 67 70 189 211 218 223 226 231 235 236 236 152 168 FY'13 FY'14 FY'1
Slide 9: Installed Capacity by source and ownership
Installed Capacity = 408 GW (a I EX INNOVATION TECHNOLOGY FUTURE Capacity by Source Capacity by Ownership Nuclear Hydro 7 GW Central State 47 GW 99 GW 105 GW Renewable 118 GW Thermal 236 GW Private 204 GW Data as on 30th Sep 2022 8
Slide 10: Sector Construct
Sector Construct I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Long-term (89%) (88%) Short-term (12%) Total Power Generation (FY22): 1,320 BU* Bilateral: Exchanges: Up to 25 years DSM Less than 1 year Real Time (1hour) – 11 days 85.9% 4.5% 7.7% 1.9% Exchanges (Only up to 90 days) Bilatera
Slide 11: Fast growing Exchange Markets
Fast growing Exchange Markets I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Exchanges (BU) Bilateral (BU) DSM (BU) CAGR: 20.8% CAGR: 1.5% CAGR: 1.1% 101 56 67 58 60 80 25 25 44 48 54 56 24 I I I FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 23 FY20 23 FY21 FY22 Source: CERC
Slide 12: Immense potential to deepen India's Power Market
Immense potential to deepen India’s Power Market I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE 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
Slide 13: Exchanges share in short term market
Exchanges share in short term market I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Exchange Market and ST Market - % of Total Generation – India Share of 30.2% 34.4% 37.2% 36.9% 41.2% 54.5% 54.3% 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
Slide 14: Electricity Growth Drivers
Electricity Growth Drivers (el. ...=) INDIAN ENEAGY EXCHANGE INNOVATION TECHNOLOGY FUTURE India is placed as the most promising economy on the global map: ➢ Industrialization 2,538 ✓ High GDP growth of about 8% expected to drive electricity r ✓ Core sector, traction, EV, cooking will drive electrici
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I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE In this presentation: Sector in transition Electricity value chain IEX: Who we are IGX Way forward 14
Slide 16: India's premier technology-led energy marketplace
India’s premier technology-led energy marketplace I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE ➢ Nation wide, automated and transparent trading Robust Ecosystem platform for physical delivery of electricity, renewables & certificates 7300+ 4600+ 1800+ ➢ Commenced operations in 2008; CERC
Slide 17: Benefitting Power Sector and the nation
Benefitting Power Sector….and the nation I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE ➢ 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 Po
Slide 18: Our Values
Our Values INNOVATION TECHNOLOGY FUTURE <Oy, 24X7 Power Transparency Flexibility in Power Procurement Competitive Price Payment Security Cost Saving
Slide 19: Market Segments
Market Segments .4 E3 I EX INMAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Intraday Market & Contingency Market Segment Since Jul’15 Integrated Day Ahead Market I. Intraday Market : hourly and or 15-minute contracts on same day on DAM since Jun’08 rolling basis Delivery for next day Day-Ahe
Slide 20: Product Mix
Product Mix (a I EX INNOVATION TECHNOLOGY FUTURE FY22 H1 FY23 • DAM 5% Green 3 6% 7% 11% 20% RTM 48% 64% 28% TAM 5% 6% Certificates Total Electricity Volume: 102 BUs Total Electricity Volume: 46 BUs Matching Closed, Double- sided Open Auction -Uniform Continuous Reverse Auction Auction Price Step Ma
Slide 21: IEX Market Share Product Wise
IEX Market Share Product Wise I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE FY22 Q2FY23 23.5 120.0 99.9% 100.0% 101.5 120.0% 99.5% 100.0% 91.8% 120.0% 100.0 77.5% 94.2% 100.0% 20.0 90.2% 100.0% 80.0 65.2 55.7% 80.0% 80.0% 11.2 49.1% 60.0 60.0% 6.6 60.0% 40.0 19.9 10.0 40.0% 4.2 40.0% 20.0
Slide 22: Bilateral & Exchange Prices Over the years
Bilateral & Exchange Prices - Over the years (a I EX INNOVATION TECHNOLOGY FUTURE IEX DAM Volume (BU) Trader Volume (BU) IEX Wt. Avg DAM Price (Rs. per kWh) Bilateral Price (Rs. per kWh) 70 65 5 4.23 4.34 4.30 4.32 60 5 60 3.91 4.42 4.40 4.27 4.13 4 3.54 50 49 50 3.73 3.61 4.03 3.52 3.84 3.58 45 4 3
Slide 23: Supply side constraints leading to high price discoveries
Supply Side Constraints leading to high price discoveries recently (a I EX INNOVATION TECHNOLOGY FUTURE Geo-Political factors have impacted international coal and electricity prices worldwide HBA Index ($/T) E Auction Coal Qty (MT) E -auction Prices above notified 50 45 0% 45 -10% Price (%) 40 -20%
Slide 24: Price - Volume Outlook
Price - Volume Outlook I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE ➢ 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 &
Slide 25: Customer Centric Technology and Product Strategy
Customer Centric Technology and Product Strategy I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE CUSTOMER CENTRIC EFFICIENT STATE OF THE ART ➢ Digital Experience ➢ Comprehensive Product Portfolio ➢ National Open Access Registry ✓ Secure Web Access ✓ Longer Duration Contract ✓ Integration of
Slide 26: Robust financial performance
Robust financial performance INNOVATION TECHNOLOGY FUTURE Consolidated Financials Rs Cr • Breakup of standalone Q2FY22 Q1FY23 "Mw Q2FY23 revenues (%) 122.3 113.4 113.8 107.0 97.6 96.1 77.4 69.1 71.2 Transaction Fees 86% 82% 80% Q2FY22 I II Q1FY23 Q2FY23 Admission and Annual Fees 4% 5% 4% 225.2 227.2
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I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE In this presentation: Sector in transition Electricity value chain IEX: Who we are IGX Way forward 26
Slide 28: Indian Gas Exchange
Indian Gas Exchange I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE 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 technolo
Slide 29: IGX – Key Highlights
IGX – Key Highlights (1,4INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Q2FY23 Business Updates Strategic Partners Total volume 59 lakh MMBtu YoY growth (%) 501% IndianOil Total number of trades 453 No. of members 31 adani G3-torrent GAS Active clients 90+ Gas Domestic Gas Ceiling Price ➢ Comme
Slide 30: Opportunity
Opportunity I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE 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 ec
Slide 31: Key Gas Market Enablers
Key Gas Market Enablers I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE 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 3
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I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE In this presentation: Sector in transition Electricity value chain IEX: Who we are IGX Way forward 31
Slide 33: Create Customer Delight for each Interaction
Create Customer Delight for each Interaction I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE ➢ Ease of Bidding ➢ Digital Registration Bidding ➢ Multiple Products ➢ Frictionless ➢ Efficient Price Discovery ➢ Quick Customer ➢ Data Insights Interactions ➢ Automated ➢ On-Time Payment ➢ Real-Tim
Slide 34: Transitioning Towards a Futuristic Tech Architecture
Transitioning Towards a Futuristic Tech Architecture a I E.),,,c INNOVATION TECHNOLOGY FUTURE Automated ➢ Digital Inside Manual Workflow ➢ Open API Integration Digital Mesh ➢ Automation Modular ➢ Service Oriented Architecture Monolithic ➢ Automated Bank Integration Digital Twins ➢ Web-based Portal D
Slide 35: Policy Advocacy to Enhance Liquidity in the Spot Market
Policy Advocacy to Enhance Liquidity in the Spot Market I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE ➢ 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 St
Slide 36: Immense growth potential (1/3)
Immense growth potential (1/3) I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Growth from ➢ RTM: June’20 recently ➢ Green Markets: GTAM launched in Aug’20, GDAM launched in Oct’21 launched ➢ Cross Border: April’21 products ➢ Long Duration Contracts: June’22 ➢ Ancillary Market, Gross Biddin
Slide 37: Immense growth potential (2/3)
Immense growth potential (2/3) I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE 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 req
Slide 38: Immense growth potential (3/3)
Immense growth potential (3/3) I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE No new PPAs ➢ No new long-term PPAs signed in the last 5 years in thermal power ➢ Efficient price discovery has been the biggest growth driver for exchanges in the past Efficient Price ➢ Discoms can source cheape
Slide 39: New Business Initiatives
New Business Initiatives I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Renewable through Markets – Merchant RE ➢ IEX has been working 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
Slide 40: Thank you
I EX INDIAN ENERGY EXCHANGE INNOVATION TECHNOLOGY FUTURE Thank you @IndianEnergy @indian-energy @IEX_India_ ExchangeLtdIEX -exchange-limited Phone: +91-120 4648100 Email: contact@iexindia.com Website: www.iexindia.com 39
Slide 41: IEX announces unaudited financial results for Q2 ended 30 September 2022
INDIAN ENERGY EXCHANGE (IEX) ANNOUNCES ITS UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED 30th SEPTEMBER 2022 ● IEX CULMINATES THE SECOND QUARTER OF FY23 WITH 23.1 BU VOLUME ACROSS ALL MARKET SEGMENTS; ● THE EXCHANGE ACHIEVED 3% QoQ CONSOLIDATED PAT GROWTH IN Q2FY23 ● INTRODUCED DAILY CONT
Slide 42: Business and Financial Performance Highlights
BUSINESS AND FINANCIAL PERFORMANCE HIGHLIGHTS On a consolidated basis, revenue for the quarter increased by 0.3% QoQ, from Rs. 113.4 Cr. in Q1FY'23 to Rs. 113.8 Cr. in Q2FY'23. PAT grew by 3% QoQ from Rs. 69.1 Cr. to Rs. 71.2 Cr. with a margin of 63%. During the quarter, the Exchange traded 23.1 BU
Slide 43: Power Sector Highlights Update
POWER SECTOR HIGHLIGHTS UPDATE India recently surpassed UK to become the fifth largest economy and is expected to become the third largest economy by the end of this decade. For FY’23, the Indian economy is expected to grow by 6.8% as per IMF. During Q2FY23 both the Manufacturing and Services PMI re
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