[00:00:00] Part 4 Innovation
[00:00:09] The Indian Energy Exchange sits at the cusp of market infrastructure and India's power
[00:00:16] markets.
[00:00:17] Intrinsically, IEX is a technology company that has been shaping the power sector for
[00:00:23] over 15 years based on access, affordability and availability, its core values of customer
[00:00:32] centricity.
[00:00:33] India's early success with technology-driven stock exchanges in the late 1990s laid a credible
[00:00:42] foundation for what could be achieved through technology in making markets functional, transparent
[00:00:49] and efficient.
[00:00:51] The bind for technology-driven transaction platforms had been affirmed.
[00:00:57] Circa 2007, following the in-principle approval of IEX from CERC, the promoters arranged for
[00:01:06] a state-of-the-art technology platform from OMX Technologies, Sweden, now NASDAQ OMX.
[00:01:16] The platform was customized for Indian conditions.
[00:01:19] Upon being commissioned, IEX began an exercise in end-to-end mock trials with its registered
[00:01:26] members before approaching CERC with the data, which culminated in the final approval
[00:01:33] and launch of the exchange platform in June 2008.
[00:01:38] What started with 20-odd technology professionals enabling smooth electricity transactions is
[00:01:45] today a team of nearly 120 professionals innovating, designing, developing and delivering trading
[00:01:54] technology solutions for electricity trading out of its technology centers in Mumbai and
[00:02:01] NCR.
[00:02:03] Prior to its IPO in October 2017, IEX took a call to de-risk and improvise its technology
[00:02:11] cost structure.
[00:02:13] It proceeded to move to an indigenous software system which drastically optimized the infrastructure
[00:02:19] cost as compared to the using the OMX platform.
[00:02:24] In a short span, the internal team added interface modules that the earlier system did not possess.
[00:02:32] Even as the prevailing throughput of portfolios transacted on the exchange was highest
[00:02:39] at 1500 per day, the system passed the operating rigor when it was tested for 20,000 portfolios
[00:02:48] per day.
[00:02:49] The new software is equipped to handle complex order types and derive results under grid
[00:02:56] conditions of power transmission congestion.
[00:03:00] With a skilled internal team and a scalable and robust system, technology established
[00:03:06] itself as the backbone of IEX.
[00:03:10] In the world of power exchanges, financial accuracy, security and uptime are operative
[00:03:17] words.
[00:03:18] Expectedly, IEX does not just transact dependably but has done so consistently over the years
[00:03:27] and does so with speed.
[00:03:30] Its technology enables an order placement in the blink of an eye.
[00:03:35] IEX's clients send their bids for the day ahead market between 10 am and 12 noon and
[00:03:42] the system matches, transacts and informs them of the same.
[00:03:47] IEX's secure framework prevents and detects system intrusions with layered firewall technologies
[00:03:55] and virus and malware containment systems.
[00:03:59] The testimony to IEX's technology has been that in 15 years of operations, the exchange
[00:04:06] has not faced any incidents against financial accuracy and never had any unplanned downtime
[00:04:14] or any security breach.
[00:04:16] The IEX CTO Mr. Sung Gautham talks to us about some of the technological innovations
[00:04:23] at IEX.
[00:04:26] Over the past 15 years, the power sector has gone through rapid transformation with consumerization
[00:04:31] of energy, digitization and automation of the entire ecosystem.
[00:04:36] IEX as the technology and innovation led energy marketplace has always been at the
[00:04:43] forefront to facilitate this transformation with its dedicated technology team relentlessly
[00:04:49] working to provide the best in class experience in partnership with global technology leaders.
[00:04:56] Technology is the core differentiator for any exchange platform and we have kept pace
[00:05:02] with future-ready technologies and built a secure, scalable, configurable and robust exchange
[00:05:09] using globally proven and futuristic exchange architecture.
[00:05:13] With such a strong core, we were able to introduce complex markets such as the real-time
[00:05:19] market.
[00:05:20] The RTM market facilitates utilities and industry to balance the power demand supply variation
[00:05:27] and enable 24x7 power supply in the most flexible, efficient and competitive manner.
[00:05:34] While the day-head market features one auction in the day for the next day, the real-time
[00:05:39] market features 48 auctions in a day and with each auction session after a time period
[00:05:45] of 30 minutes.
[00:05:47] During the 30-minute duration, multiple activities such as bidding, uniform price discovery,
[00:05:53] corridor allocation, final clearance, settlement, delivery schedule intimation are completed
[00:06:00] within specified timelines while performing API-based interaction with the National
[00:06:06] Open Access Registry.
[00:06:08] The success of RTM can clearly be attributed to innovation, technology and automation.
[00:06:15] Security has also been one of our primary tenets for developing all our features.
[00:06:21] We continue to invest and strengthen it by creating multiple layers of firewall, optimizing
[00:06:27] networks and having comprehensive monitoring.
[00:06:32] As IEX has evolved and invested in developing algorithm-based technologies, it has been
[00:06:38] able to build a technological trust with its participants.
[00:06:43] Mr. Sangh Gautam elaborates on some of these aspects.
[00:06:47] We practice industry-compliant ISO certified product development methodology using iterative
[00:06:54] and incremental life cycle.
[00:06:57] Indian energy exchange will always be at the forefront of adopting new technologies
[00:07:02] and processes to help evolve and usher in a sustainable and efficient energy future
[00:07:09] for the nation.
[00:07:11] IEX's product and technology team is a vibrant, inquisitive, motivated, progressive, action-oriented
[00:07:18] and customer-centric team.
[00:07:20] Our team continuously questions all processes which act as deterrents to efficiency and
[00:07:26] works towards automating and finding a solution.
[00:07:29] With such a culture, we are confident that IEX will deliver on the technology vision
[00:07:35] of providing a state-of-the-art, intuitive, secure and efficient energy marketplace for
[00:07:41] all our customers to continue to repose their trust in us.
[00:07:47] In an era where equity trading has become seamless through mobile and web-based APIs,
[00:07:54] IEX also took a cue and commenced its web-based platform in 2022 to provide a similar experience
[00:08:03] for trading electricity.
[00:08:06] Trading customers can now experience digital registration, bidding, physical delivery and
[00:08:12] digital financial settlement through the web.
[00:08:16] IEX has also provided easy accessibility of market data through the launch of a user-friendly
[00:08:23] mobile application on iOS and Android platforms.
[00:08:28] How do the digital initiatives undertaken by IEX enhance customer experience, streamline
[00:08:34] operations and save costs and time?
[00:08:38] Let's hear from Mr. Amit Kumar, head of market operations and new product initiatives at
[00:08:44] IEX.
[00:08:46] Customer sentiment is woven into our DNA right from the first day of operations.
[00:08:51] IEX might be based price-disk delivery algorithm, maximizes social welfare for all the
[00:08:56] market participants.
[00:08:58] The most competitive price discovery at the IEX platform led to the creation of a combined
[00:09:03] buyer and consumer surplus worth over 28,000 crore rupees in financial year 2022-23.
[00:09:09] We constantly innovate to provide a seamless and best-in-class customer experience across
[00:09:15] each of the touchpoints, registration, bidding, delivery and financial settlement.
[00:09:21] Our web-based platform provides anytime, anywhere, easy and secure bidding experience
[00:09:27] along with digital onboarding, easy financial reconciliation and rich data insights for informed
[00:09:32] decision-making.
[00:09:34] The bid creation tool enables our participants to reduce their manual effort through auto
[00:09:39] generation of bulk bids for upload to our platform.
[00:09:42] We have done deep integration with the systems of our clearing banks to provide
[00:09:47] our customers with faster turn-on time for all the financial settlement transactions.
[00:09:53] Advanced bidding through API has enabled the API-integrated market participants to place
[00:09:58] bids without manual intervention.
[00:10:01] We have made continuous investments on the software and on the hardware side to ensure
[00:10:06] almost 100% availability of our exchange platform.
[00:10:10] The agility and scalability of our technology platform is evident from the fact that
[00:10:15] IEX has been the frontrunner in implementing new market segments like real-time, green
[00:10:20] market, cross-border trade and more recently the termhead market up to three months.
[00:10:26] Our secure and reliable platform results in the discovery of the most efficient and competitive
[00:10:32] price which is of critical importance for all our customers.