Indian Energy Exchange (IEX)

Implementation of provisions of General Network Access (GNA) and what it will mean for IEX

First lets understand What is General Network Access (GNA)?

• GNA refers to non-discriminatory access (open access) to the inter-State transmission system (ISTS) for an estimated maximum injection and for a consumer to draw for a specified period.

• As part of its continued efforts to improve energy access, GNA is being implemented, which allows eligible discoms and gencos to draw or inject power from specific points along the ISTS

How is GNA different from point-to-point access concept?

• Today a power generator has to work out how the supply will be done due to the point-to-point access concept which, according to the producers, is restrictive.

• GNA will allow them to supply from any point, as long as the quantum contracted for is met.

• This allows access or withdrawal on the entire belt of transmission

• Thus it provides generators and procurers (states) the choice of injection and withdrawal.

• A generator focuses only on producing power and the consumer focuses only on buying it.

• How the power is transmitted will no longer be a challenge for the producers.

• This will benefit both the power generator and the consumer.

• This is expected to create a level playing field.

What does it mean for IEX?

• The GNA Regulations will go a long way in streamlining network access and network usage charges.

• GNA will strengthen the exchange-based power market in the country.

• It will remove regulatory arbitrage which has led to a temporary shift of volume from Day-Ahead-Market (DAM) to Day-ahead Contingency (DAC) and will be more conducive towards further market development in the country.

• According to Mr. Satyanarayan Goel – Chairman and MD IEX, in the latest concall, the provisions of GNA regulations will be effective from August 1st, 2023 (Not in the hand of IEX, it depends on Regulatory bodies like Central Electricity Regulatory Commission (CERC) ). It will be first followed by issuing the Grid Code and after that the National Load Despatch Center (NLDC) will need another 2 months to develop the procedure and do necessary changes in the system to implement the Grid Code and the Transmission Charge Sharing Regulation.

• IEX Management expects that all the volumes which shifted to DAC will be transferred back to DAM after these regulations come into force.

• The market share of IEX in the Day-Ahead_Market (DAM) and Real-Time-Market (RTM) is 100%.

• The transactions happening in the DAC market are mainly because of the arbitrage available in the DAC market. Once that arbitrage is removed (when provisions of GNA are implemented), there is no reason for the transaction to happen in the DAC market.

Sources:

IEX Latest Concall Trasncript