IEX Power Market Update for May – 80% Growth For Green Market

In its May 2022 update, India’s premier energy exchange IEX (Indian Energy Exchange) informs that it 7596 MU of electricity volume in May’22 comprising 6680 MU in the conventional power market, 642 MU in the green power market, and 275 MU (2.75 lac Certificates) in the REC Market, registering 16% YoY growth across all the market segments.

According to the power demand data published by the National Load Dispatch Center, during May’22 the energy consumption at 136 BU saw 23% YoY growth while the national peak demand at 204.45 GW saw 21% YoY growth.

Increased renewable generation(44% YoY increase) and hydropower generation (8% YoY increase), saw the day-ahead power market at IEX finally see a much needed correction in the prices which reduced from Rs 10.06 per unit in April’22 to Rs 6.76 per unit in May’22.

ELECTRICITY MARKET: DAY- AHEAD, TERM- AHEAD & REAL-TIME MARKET

The Day-Ahead Market volume at 3173 MU saw a decline of 27% YoY growth during the month with the average monthly price at Rs 6.76 per unit. The market-clearing price saw a decline of 33% MoM since the average monthly price was Rs 10.06 in the month of April’22.

The Real-Time Market volume at 2319 MU grew 61% from 1704 MU in April’22. The highest single-day volume of 104.39 MU was achieved on 19 May’22. The average monthly market-clearing price at Rs 5.88 per unit saw a decline of 38% on MoM basis. Overall, 592 participants transacted in the RTM market in the month of May.

The Term-Ahead Market comprising intra-day, contingency, daily & weekly contracts traded 1189 MU registering 211% YoY growth.

GREEN MARKET: DAY-AHEAD & TERM-AHEAD MARKET

IEX Green Market comprising the Day-Ahead and Term-Ahead market segments achieved 642 MU volume during May’22 seeing 80% YoY growth. The Green Day-Ahead Market achieved 493 MU volume with the weighted average price of Rs 5.91 per unit and saw participation from 172 participants during the month.

The Green Term-Ahead Market achieved 148 MU volume and recorded the highest number of participation from 23 market participants on May 4th. The average monthly price for Solar was Rs 6.41 per unit while the average monthly price for Non-Solar was Rs 8.21 per unit.

The key distribution utilities from States including Delhi, Haryana, Telangana, Karnataka, Maharashtra, Punjab, Daman & Diu, Gujarat and Uttar Pradesh as well as several industrial consumers participated in the Exchange’s Green Market during the month.

RENEWABLE ENERGY CERTIFICATE MARKET

A total of 2.75 lacs RECs were cleared in the trading session at IEX held on Wednesday, 25 May’22. The volume comprised 1.71 lacs Non-Solar RECs with a clearing price of Rs 1,000 per REC and 1.03 lacs Solar REC with a clearing price of Rs. 2201 per REC. The next REC trading session at the Exchange is scheduled on Wednesday 29 June 2022.

An an indicator of the health of the renewable sector in the country, trading volumes and prices at IEX indicate a robust outlook for fresh capacity additions. With more and more corporates set to focus on renewable energy as a low lying fruit to clean up their carbon emissions, the green trading market is the one to watch for the future too.

By the next quarter, the power trading market in India should have a third firm, Hindustan Power exchange make its entry, besides PXIL. IEX of course remains the overwhelming market share leader for now.