Day Ahead Market
What is Day-Ahead Market?
A physical electricity trading market for deliveries for any/some/all 15- minute time blocks in 24 hours of the next day, starting from midnight. The prices and quantum of electricity to be traded are determined through a double-sided closed auction bidding process. In addition to DAM, the High Price Day Ahead Market (HP - DAM) segment was introduced in March 2023 to provide an additional avenue for high variable cost generators.
Auction Bidding
Bidding is an offer to set a price tag by an individual or business for a product or service or a demand that something be done. Bidding is used to determine the cost or value of something.
Trading of 15 Minute Contracts
The name says it clearly: the 15 minute day trading rule is a shorter form of day trading (within 15 minutes). You can contract the time limit even further. The idea is to spot a trend, buy/sell and then sell/buy within 15 minutes.
Risk Management
Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events.
Congestion Management
Congestion Management through market splitting and determining Area Clearing Price (ACP) specific to an area.
Clearance
Clearance obtained from SLDC by buyers and sellers based on availability of network and ABT meters.
Process Flow and Timeline
Confirmation
- Final results for confirmation and application for scheduling of collective transactions are sent to NLDC.
- NLDC sends the details of the schedule to respective SLDCs.
Scheduling
- RLDCs /SLDCs incorporate Collective Transactions in the Daily schedule.
- A scheduled transaction is considered deemed delivery.
- Deviations from schedules are dealt under UI or Deviation Settlement or Imbalance Settlement regulations. The Regional Entities (those connected at ISTS networks) are governed by CERC Regulations and Embedded Entities (those connected to state transmission or distribution network) are governed by respective State Commission’s regulations.
Matching
- Option available for Single and Block Bids
- Participants can sale / purchase power for delivery (T+1 Day)
- Bidding session are active from : 1000 hrs. - 1200 hrs.
- By 1400 Hrs, NLDC reverts with actual transmission corridor availability during all 15 minute time blocks across congestion prone bid areas.
Transmission Corridor & Funds Availability
- Preliminary MCP and MCV determine provisional obligations and power flow for selected participants.
- Funds in participants' settlement accounts are confirmed against provisional obligations.
- If funds are insufficient, bids from the participant are removed.
- Corridor capacity and power flow data sent to NLDC for review, and corridor allocation requested based on availability.
- At 1400 Hrs, NLDC confirms transmission corridor availability in 15-minute intervals for congested bid areas.
Results
- Based on the reserved transmission capacity intimated by NLDC, IEX recalculates MCP and MCV as well as area clearing price (ACP) and area clearing volume (ACV). See Market splitting for more info.
- ACP is used for the settlement of the contracts. On receipt of final results, obligations are sent to the Clearing Banks for Pay In from buying Members at 14.30 hrs and the bank is asked to confirm the same.
Bidding
- Option available for Single and Block Bids
- Participants can sale / purchase power for delivery (T+1 Day)
- Bidding session are active from : 1000 hrs. - 1200 hrs.
- By 1400 Hrs, NLDC reverts with actual transmission corridor availability during all 15 minute time blocks across congestion prone bid areas.
Process Flow and Timeline
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