Thread by @ValueEducator

#IEX Q2 22 Results Thread 🧵 CMP : ₹ 763

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➡️ During H1 22 there was 14% increase in power consumption with respect to last year.

➡️ Monsoon affected the coal supply. Imported coal prices increased from $25 to $120/ ton

➡️ LNG Prices increased 10x from $3 MMBTU last year to $30 MMBTU currently

➡️ On 17th Oct 2021 IEX received CERC approval to commence the Green Day Ahead contract as a part of the integrated Day-Ahead market.

➡️IEX Launched Value Added Services (VAS) for renewable energy generators - Generation forecasting & analytics solutions. Already onboarded Climate Connect as panel service provider

➡️ The 10-year long jurisdictional conflict related to power market between CERC and SEBI has

been finally resolved by the honourable Supreme Court, paving way for introduction of the much-awaited long-duration contracts on power exchanges and derivatives -- electricity derivatives on the MCX

➡️ MCX Is going to launch derivatives. For settlement of the derivatives

MCX will need a price & they intend to use IEX price. So for using the price, IEX have agreements with MCX. Volumes on IEX will increase after derivatives will start trading on MCX

➡️ CERC has issued draft Deviation Settlement Mechanism, and under this, now

the DSM charges are to be linked with the block-wise price discovered on the exchange. This will further expand and deepen the real-time market.

➡️ Energy saving certificates & GTAM trading will, start from 26th Oct & IEX already filled the petition with CERC for LDC (Long

Duration Contracts)
➡️These contracts are basically for fortnightly, monthly, quarterly and yearly contracts for result less than 1 year.
➡️ REC hearing held on 21st Oct and last hearing will be on 28th oct and order is expected in the month of November.

➡️ Later this year, we may also see introduction of exchange-based ancillary markets.

➡️ Govt. planning to launch MBED Phase 1 from 1st April 2022 & Phase 1 will be implemented without market coupling, after that regulator will decide about coupling.

➡️ Purpose of MBED is not only 5% or 10% reduction in the cost. It is also to deliver the power in the most optimal manner and also going forward, integration of renewables with the conventional power and efficient member.

➡️ Government of India has decided to phase out

old & inefficient power plants and the capacity is around 35 to 40 gigawatts. at 80% utilization level, these units should generate about 300 BU. But since these units are old, they are presently generating about 100 BU to 150 BU. Currently these power plants are

supplying their power to distribution companies if they are phased out, then that power will come to the market.

➡️ The government is going to deepen the power markets by increasing the spot market to 25% by the year 2024. Today Power exchanges have 7% share in total power while

short term market is around 12%. So there is big opportunity in next 3 year if we reach to 25%

➡️Satyanayan Global on MBED & Volumes Moving to Competition
"Nobody can take risk with the exchange or a platform, which has not proven. I mean in last 13 years,

at least we have demonstrated that, that we are capable of generating such a product"

➡️ Company is exploring the opportunities to diversify the business with the cash they have.

➡️ On PTC Competition - Traders are only doing these transactions on behalf of the client

For a generator, it is more important to sell that power. If that power is not sold, that opportunity is lost forever. Power is a perishable commodity.

➡️Similarly for a distribution company or industrial consumers, it is important to get the power. If they not able to get the

power, industry will have to reduce the production and distribution company will have to do the load shedding. So they will choose that exchange with which they have the comfort and they able to sell and purchase power efficiently.