Power Market Update- REC Market Records All-Time Low Price In April

REC Market Records All-Time Low Price With 80% Decline YoY

Indian Energy Exchange (IEX), India’s premier electricity exchange achieved 9,044 MU overall volume, in April’24, marking a 14.1% year-over-year increase. The renewable energy certificates (REC) at 618 MU, increased 211% YoY.

At Rs. 204 per certificate, the REC market recorded an all-time low price in the trading session held on 24th April 2024. The REC prices have declined by 80% on a YoY basis. These prices provide an opportunity for obligated consumers to meet their Renewable Purchase Obligations, and voluntary customers to meet their sustainability aspirations.

The market clearing price in the day-ahead market during April ‘24 at Rs. 5.1/unit was reduced approximately 6% year-on-year. The sell bids on the exchange (Day Ahead Market plus Real-Time Market) during the month increased by 21% on a YoY basis. The DAM prices were lower by almost 45% as compared to prices discovered under bilateral contracts.

According to government data published in April’24, the country’s energy consumption reached 144 BUs, representing an 11% increase on a year-on-year basis. Favorable policy and regulatory interventions by the Government and Regulators led to an improved sell scenario, leading to increased sell liquidity at IEX, despite an increase in the country’s energy demand.

As a result of this balance between supply and demand, the prices on the exchange have remained steadfast. In preparation for the summer months, the Ministry of Power has announced several measures, such as mandating the sale of surplus un-requisitioned power on power exchanges by all thermal generating stations and rescheduling of planned maintenance of thermal power plants to the monsoon season.

Additionally, section 11 directions for operationalization of imported coal-based plants are extended till 15 October 2024. Further, the Government has directed all gas-based power generating stations to operationalize their plants from May 1 to June 30 given the rise in electricity demand. 

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

The Day-Ahead Market (DAM) volume was at 4,116 MU in April’24, as compared to 4,332 MU in April’23.

The Real-Time Electricity Market (RTM) continued its growth trajectory in April’24. The RTM volume increased to 2,629 MU in April ‘24, from 2,152 MU in April’23, registering an increase of 22.1 % YoY.

Day Ahead Contingency and Term-Ahead Market (TAM), comprising of contingency, daily & weekly, and monthly contracts up to 3 months, traded 1,276 MU during April’24, higher by 51.7 % on a YoY basis.

GREEN MARKET: GREEN DAY-AHEAD & GREEN TERM-AHEAD MARKET

IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved 402 MU volume during April’24. The Green Day-Ahead Market (G-DAM) achieved 361 MU volume during the month, with a weighted average price of Rs 4.10 per unit per unit. The segment saw participation from 234 market participants during the month. The Green Term-Ahead Market (G-TAM) achieved 41 MU volume in April ’24 with an average monthly price of Solar- Rs 4.12/unit and Non-Solar- Rs 6.19/unit. RENEWABLE

ENERGY CERTIFICATE MARKET (REC MARKET)

A total of 6.18 lac RECs (equivalent to 618 MU) were traded in the trading sessions held on 10th April’24 and 24th April’24, at a clearing price of Rs. 240/REC and Rs. 204/REC respectively. Rs 204/ REC is the lowest-ever price discovered of REC in a trading session since inception. The next REC trading sessions at the Exchange are scheduled on 08th May’24 and 29th May’24.

ENERGY SAVING CERTIFICATES (ESCERTS)

During April’24, 523 ESCerts (equivalent to 0.5 MU) were traded on IEX, at the floor price of Rs. 2165 per ESCert.