REGULATORY NEWS. More information: Consumer Category FY 16-17

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1 october'17 ISSUE 10 Volume 4 Bulletin NEWS AND INFORMATION ISO 9001:2008, 27001:2013, 14001:2004 PAGE 01 LL 01 LL 03 LL 03 LL 04 LL In this Issue... REGULATORY NEWS DERC proposes amendments in Open Access Regulations, 2017 DERC issues Tariff Order for FY KERC proposes amendment in OA Regulation, 2004 and Tariff Regulation Discoms file petition in KERC for Additional Surcharge determination Schemes for renewable Energy in France Regulatory NEWS DERC proposes amendments in Open Access Regulations, 2017 DERC has proposed the Draft DERC (Terms and Conditions for Open Access (First Amendment) of Regulations, 2017 and amendment in the Order for Determination of Open Access Charges and related matters. A brief of the proposed amendments is as follows: The Medium Term Open Access (MTOA) has been introduced. The Regulations define MTOA from 1-3 years. Inter-State Open Access has also been recognized by inclusion of suitable provisions in the amendment. In case of Inter-State OA, condition of prior consent has to be taken from concerned SLDCs and distribution licensees, as applicable. The DERC has also proposed amendments in OA charges in its Order dated The key amendments proposed are as below: The OA consumer shall also be liable to pay any other surcharge as applicable to embedded consumers of the distribution licensee at the rate specified in the applicable Tariff Order. For the purpose of computation of Surcharge, the distribution licensee shall treat the total power consumption of the OA consumer as if taken from the distribution licensee. As per Tariff Schedule applicable w.e.f , surcharge of 8% towards recovery of past accumulated deficit and 3.70% towards recovery of pension trust charges of erstwhile DVB employees/pensioners shall also be payable by OA consumers. More information: PAGE Market NEWS - Sept'17 05 Electricity Market Update LL 06 REC Market Update LL 06 ESCert Market Update LL PAGE Trade Info 07 Trade Data: September 17 LL DERC issues Tariff Order for FY DERC has issued Tariff Orders for FY for BRPL, BYPL, TPDDL Discoms. The Order shall be effective from The brief highlight of the orders is as follows: Tariff Consumer Category Non-Domestic High Tension (Ndht) 11kV and above Industrial Power on 11 kv Single Point Delivery Group of Sip Consumers Large Industrial Power (Lip) 11 kv and above FY Fixed Charges (`/kva/month) FY Increase/ FY Energy Charges (`/kvah) FY Increase/ There are no changes in Energy Charges. A separate Tariff category has been created for Charging Stations for E-Rickshaw/E-Vehicle with Tariff at flat rate of ` LT. 01

2 Wheeling Charges (`/Unit) Particulars BRPL BYPL TPDDL FY FY Increase/ FY FY Increase/ FY FY Increase/ At 11 kv level At 33/66 kv level Above 66 kv level Wheeling Loss(%) Particulars BRPL BYPL TPDDL FY FY Increase/ FY FY Increase/ FY FY Increase/ At 11 kv level 3.96% 2.94% -1.02% 2.25% 2.95% 0.70% 2.00% 1.94% -0.06% At 33/66 kv level 1.25% 0.79% -0.46% 1.35% 1.23% -0.12% 0.90% 0.84% -0.06% Above 66 kv level 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Renewable Purchase Obligation (RPO %) Category RPO (%) Approved Balance REC/Energy Purchase (MU) FY FY Increase/ BRPL BYPL TPDDL NDMC Total Solar 0.35% 4.75% 4.40% Non-Solar 8.65% 9.50% 0.85% Total The Commission has imposed penalty for past unmet RPO of Discoms at 10% of the total cost of unmet RPO. Average Cost of Supply (`/kwh) Average Cost of Supply (`/kwh) BRPL BYPL TPDDL Average Power Purchase Cost (`/kwh) Average Power Purchase Cost (`/kwh) BRPL BYPL TPDDL Surplus Power: The commission has approved the total sale of surplus power at `3.00/kWh Net Surplus Power (MU) BRPL BYPL TPDDL More information:

3 KERC proposes amendment in OA Regulation, 2004 and Tariff Regulation On , KERC has proposed 4th amendment to Open Access Regulations, 2004 and 3rd amendment to Tariff Regulations. Both the regulations have been amended to adopt formula of determination of Cross Subsidy Surcharge (CSS) as provided in National Tariff Policy The amendment primarily proposes that, the OA consumer shall be liable to pay CSS from time to time as determined by the Commission. The consumer who is permitted open access through the transmission/distribution network of shall pay to the Distribution Licensee in whose area the consumer is located, a CSS as per the following formula. S = T - [C/ (1-L/ 100) + D+ R] Where; S is the surcharge; T is the tariff payable by the relevant category of consumers, including reflecting the Renewable Purchase Obligation C is the per unit weighted average cost of power purchase by the Licensee, including meeting the Renewable Purchase Obligation D is the aggregate of transmission, distribution and wheeling charge applicable to the relevant voltage level L is the aggregate of transmission, distribution and commercial losses, expressed as a percentage applicable to the relevant voltage level R is per unit cost of carrying regulatory assets. The surcharge shall not exceed 20% of the tariff applicable to the category of the consumers seeking open access. More information: Discoms file petition in KERC for Additional Surcharge determination The distribution companies in Karnataka i.e. BESCOM, MESCOM, HESCOM and CESC have filed petitions in KERC for determination of Additional Surcharge (AS) to be levied on OA Consumers. The petition states, based on the projected growth, the distribution companies are tied up with considerable quantum of power after approval of the Commission whereas on the other hand the OA users who are now buying considerable quantum under OA are not availing power from the distribution companies. As a result, the generation capacity tied up with distribution companies remains idle. The distribution companies needs to back down the generation and also pay the fixed charges to the generators as per the terms and conditions irrespective of utilization. Therefore to mitigate this burden, an appropriate AS shall be levied on the OA consumers. The supply companies have proposed a methodology for computation of AS, following is the brief of it: Computation of the power availability based on the contracted capacity, and the power requirement based on the demand projection approved for consumers of distribution company. Estimation of back down capacity and volume based on the MOD principle to be made applicable for optimum utilization of the resources. Estimation of OA capacity (in MW) and volume (MU). Estimation of the fixed charges obligation due to the backed down capacity on the distribution companies. Calculation of the Fixed Charges obligation due to OA capacity resulting in the assets being stranded, on pro-rata basis. Based on it BESCOM & HESCOM has proposed 1.00 `/Unit and CESC and MESCOM, have proposed 0.63 `/Unit. The Commission has solicited comments from stakeholders and is in the process on hearing the matter. More information:

4 Schemes for Renewable Energy in France For France to achieve the target of producing 23% of its energy from renewable source by 2020, the European Commission has approved four schemes to support electricity production from onshore wind and solar on buildings and on the ground in France under EU state aid rules. This will allow France to develop over 7 GW of addition energy through renewable sources. The support schemes for medium and large-scale solar and for onshore wind power will help France in its transition to a low carbon, environmentally sustainable energy supply and will help the EU reach its environmental objectives. Brief of the schemes are as below: An onshore wind support scheme which will grant support to 3 GW of additional capacity over the next three years, taking the form of a premium on top of the market to the operators. A solar support scheme for large-scale photovoltaic installations on buildings. A solar support scheme for large-scale photovoltaic installations on the ground. The tender will grant support for up to 3 GW of additional capacity. A support scheme for 200 megawatts of additional capacity, available to both onshore wind and solar installations not exceeding 18 megawatts. Each scheme provides for a bonus to local projects or local participation in projects. The four schemes are accompanied by a detailed evaluation plan to assess their impact. Source: Tips for Energy Conversation for Industries THERMAL UTILITIES Boilers Preheat combustion air with waste heat (22 0C reduction in flue gas temperature increases boiler efficiency by 1%) Use variable speed drives on large boiler combustion air fans with variable flows Burn wastes, if permitted Steam System Fix steam leaks and condensate leaks (A 3 mm diameter hole on a pipe line carrying 7 kg/cm2 steam would waste 33 kilo liters of fuel oil per year) Use back pressure steam turbines to produce lower steam pressures Use more-efficient steam DE superheating methods Furnaces Check against infiltration of air: Use doors or air curtains Monitor O2 /CO2/CO and control excess air to the optimum level Improve burner design, combustion control and instrumentation Ensure that the furnace combustion chamber is under slight positive pressure Source: Bureau of Energy Efficiency 04

5 Market NEWS - Sept'17 Electricity Market Update The Day-Ahead power market at witnessed the highest ever trade of about 183 MU on 13 September 17. Market prices converged all over India for all hours in a day on 29 days in the month. The inter-state transmission congestion was insignificant, overall 0.07 MU were lost due to congestion. A total volume of 4087 MU was traded and cleared. Average daily sell bids of 170 MU were received against buy bids of 191 MU per day. The Market Clearing Price (MCP) was `4.08 per unit. The average MCP during morning (07:00 to 10:00 Hrs) was `3.31 per unit, during day (11:00 to 17:00 Hrs) was 3.98, during the night (01-06 Hrs and 24 Hrs) was `3.63 per unit while during the evening peak (18:00 to 23:00 Hrs) was `5.25 per unit. Market Prices (ACP) The average daily Area Clearing Price (ACP), the price at which settlement takes place, varied from `2.62 per unit to `5.53 per unit across the bid areas. Market Volume: Key Highlights Total Sell bids 5,101 MUs Total buy bids 5,738 MUs Total Cleared Volume 4,087 MUs North Eastern, Eastern and Net Buyers Southern States Northern and Western States Net Sellers 0.4% 0.4% 0.3% 0.3% 0.2% 0.2% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% % of time congestion 0.4% 0.4% 0% 0% E S W S S1 S2 W N E N N3 Import W3 Export Participation 760 participants traded in the spot market on an average daily basis. The highest participation was on 4 September, 2017 when 892 participants traded on the Exchange. Term-Ahead Market About 153 MU were scheduled during the month, mainly in the Intra-day and Day Ahead Contingency market segments while in August 17 Term Ahead saw trade of 116 MU Area Clearing Price (ACP) in September'17 Rest of India (Avg) - ` 4.08/unit South (Avg) - ` 4.08/unit North (Avg) - ` 4.09/unit (`/kwh) Price RoI (West, East and North East) South North 0.00 The table below gives the average daily buy-sell picture for Sep 17 vis-à-vis Aug 17. REGION AVERAGE DAILY BUY (MW) AVERAGE DAILY SELL (MW) Sep'17 Aug'17 Change (%) Sep'17 Aug'17 Change (%) NET North East % % BUY East % % BUY North % % SELL West % % SELL South % % BUY 05

6 REC Market Update: September 17 Highlights of the trading session held on 27th September, 2017 A total of 2,92,482 Non-Solar RECs were traded in the REC trading session held on 27th September, 2017 at. In FY , April to September, traded lac Non-Solar RECs and saw an increase of 7% in comparison to same period, previous fiscal where a total of lac Non-Solar RECs were traded even though the trading did not take place in the month of May 17 and June 17. The trading resumed only in July 17, after the Hon ble Supreme Court vacated the stay order and Hon ble CERC directed to commence trading only in Non-Solar REC segment. Non-Solar Buyer Mix 27,935 (10%) 6,490 (2%) Participants A total of 701 participants traded in non-solar segment. Overall, a total of 3,557 participants are registered in the REC segment at. Of this, 855 are Eligible Entities (RE Generators) 2,682 are Obligated Entities (DISCOMs, Open Access Consumers & Captive Generators) and 20 are registered as Voluntary Entities. An overview of participation in the REC Market at as on 27th September, 2017 Total number of registered participants 3,555 Obligated Entity 2,679 DISCOMs 34 Open Access Consumers 2,503 Captive Consumer 142 2,58,057 (88%) Captive User Distribution Licensee Open Access Consumer Voluntary 20 Eligible Entity (Private Generators) 848 Highest participation in a session (March 15) 1,265 ESCert Market Update: September 17 Highlights of the trading session held on 26th September, 2017: In the first ever Energy Saving Certificate (ESCerts) trading session held on 26 Sept 17 at, a total of 10,904 ESCerts were traded at INR 1200 per ESCert. The total buy bids were 50,904 ESCerts whereas the total sell bids were 2,39, participants traded in this session. On a overall basis, a total of 67 eligible entities are registered in the ESCert segment at. Of this, 52 Eligible Entities are registered as sellers and 15 Eligible Entities are registered as buyers. ESCerts is an instrument issued by Bureau of Energy Efficiency (BEE) for every million tonnes of oil equivalent energy (Mtoe) saving achieved by the Designated Consumers (DC). The BEE assigns specific energy consumption target to every DC. The consumers exceeding their targets are issued ESCerts where as those who are not able to meet their targets have to purchase ESCerts. Each certificate is a unique tradable entity tradable entity traded exclusively on the exchange platform. The Central Electricity Regulatory Commission (CERC) is the Market Regulator, BEE is the Administrator and POSOCO is the Registry for registering DCs as eligible entities, trading and book-keeping, for the ESCerts Market. Trade Volume (ESCerts) 10,904 Sell Bid (ESCerts) 2,39,644 Purchase Bid (ESCerts) 50,904 Price Discovered (`/ESCert) 1200 No. of Participants

7 Trade Info: DAY-AHEAD MARKET - September 2017 MONTHLY PRICE SNAPSHOT Minimum MCP Maximum MCP Average MCP ` 2.62/kWh ` 5.53/kWh ` 4.09/kWh Area Price Snapshot (`/kwh) Region Average Minimum Maximum East, North East, West North South MONTHLY VOLUME SNAPSHOT 1 MU = 1 Million kwh = 1 GWh VOLUME Total Volume (MUs) Unconstrained Volume 4,087 Cleared Volume 4,087 Purchase Bids 5,738 Sell Bids 5,101 Average Daily Volume Average Daily (MW) 5,676 5,676 7,969 7, MUs Participation Snapshot (As on 30th September 2017) Total Registered Participants Open Access Consumers Private Generators Highest Participation 4,400+ 3, ,410 22nd June'

8 Price `/kwh Price and Volume Trend 200, , , , , ,000 80,000 60,000 40,000 20, Volume MWh Volume (MWh) Cleared Volume (MWh) MCP N1 S1 W3 Average Hourly Market Clearing Volume and Price for Sept' Hours Hourly MCV (MWh) Hourly MCP (`/kwh) Price (`/kwh) Price (`/kwh) Price for the Month North-East East North Punjab South (AP & KN) S2 (TN) S3 (KR) West Chhattisgarh MCP September, 2016 September, MCP for Sept '16 & Sept ' MCP

9 TERM AHEAD MARKET SNAPSHOT - SEPTEMBER 2017 Contracts Total Volume (MWh) Max Price (`/kwh) Min Price (`/kwh) Weekly - Intraday 30, Day-Ahead Contingency 1,22, Daily REC MARKET SNAPSHOT - 27th September, 2017 After two month pause in REC trading (May and June 17), on 20 July 2017, the Honourable CERC advised to resume trading only in Non-Solar REC Market. REC Purchase Bids Sell Bids Cleared (REC) Price (`/REC) Participants Non-Solar 2,92,482 82,16,649 2,92,482 1, Solar Source-wise RE capacity (MW) State-wise RE capacity (MW) RP: 4,482 MW RP: 4,486 MW 507 Registered Projects Registered Projects Wind Small Hydro Tamil Nadu Maharashtra Uttar Pradesh Gujarat Bio-fuel cogeneration Solar Karnataka Rajasthan Andhra Pradesh Madhya Pradesh Biomass Others Chhattisgarh Punjab Himachal Pradesh Others RP: Registered Projects 09

10 Glimpses of Events Mr. Rajesh K. Mediratta, Director-BD, speaking at Workshop on Power Markets organized on 19th & 20th September 2017 in Patna Sh. Sandeep Kumar R. Pudakalkatti, Managing Director, North Bihar PDC Speaking at Workshop on Power Markets organized on 19th & 20th September 2017 in Patna Mr. Rajesh K. Mediratta, Director-BD, (seated, second from left) and Mr. Nitin Sabikhi, AVP-BD, (seated, far left) at Workshop on Open Access in Tamil Nadu on 23 August, 2017 at Dindigul 10

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12 Limited Seats Disclaimer Indian Energy Exchange Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed the Red Herring Prospectus dated September 26, 2017 with the Registrar of Companies, National Capital Territory of Delhi and Haryana, at New Delhi (the RoC ) as supplemented by the Addendum- Notice to Investors dated October 6, 2017 and October 9, 2017 respectively (the RHP ). The RHP is available on the website of the SEBI at as well as on the websites of the Book Running Lead Managers at and respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to such risks, see Risk Factors on Page 18 of the RHP. OCT 2017 Indian Energy Exchange Limited Unit No. 3,4,5 and 6, Fourth Floor, TDI Center, Plot No. 7, District Center, Jasola, New Delhi CIN: U74999DL2007PLC Phone: Fax: iex-bd@iexindia.com