Traded Power Prices Drop 30% YOY At IEX To Rs 4.74/unit In May

In a good sign for India’s summer months, power trading prices at the largest power exchange in the country, IEX, dropped 30% YOY to Rs 4.74/unit in May. During the month, the exchange enabled 8,251 MU (million units) of power trades.

The green market trades at 358 MU, 1.42 lac Renewable energy certificates (RECs equivalent to 142 MU) and 2.02 lac ESCerts (equivalent to 202 MU). The overall volume during the month was higher 8% on YoY basis. The discovered price of Rs.4.74/unit in May 2023, compares to a price of Rs. 6.76/unit in May ‘22. This has been achieved due to improving supply side scenario leading to increased liquidity, as well as cooler weather conditions.

According to IEX, while increase in power demand is expected in the coming months, the supply side liquidity is likely to further improve due to enhanced coal supply, reduction in e-auction coal prices, and consistently declining imported coal and gas prices. This will lead to competitive prices and higher clearance for Discoms & Open Access consumers.

As per data published by GRID-INDIA, energy met in the country during May ’23 stood at 136.5 BU, marginally increasing 1% on YoY basis.

During the month, IEX also commenced Tertiary Reserve Ancillary Services (TRAS) Market Segment from Delivery Date 1st June 2023 for Day Ahead Market Ancillary Services (DAM-AS) and Real Time Market Ancillary Services (RTM-AS).

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

The Day-Ahead Market (DAM) volume increased to 4,066 MU in May ‘23 from 3,224 MU in May ’22, growing 26% YoY.

The Real-Time Electricity Market (RTM) achieved highest-ever monthly volume of 2,424 MU during May ‘23, registering 13% MoM and 5% YoY growth. There were 719 participants in this segment during the month. The consistent growth of RTM segment reflects its increasing acceptance among distribution utilities and industries to efficiently balance their power demand-supply on a real-time basis.

The Term-Ahead Market (TAM), comprising intra-day, contingency, daily & weekly contracts, and contracts up to 3 months, traded 1,058 MU during May ‘23, lower 11% on 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 358 MU volume during May ‘23, growing 28% on MoM basis, indicating the renewables’ integration to achieve India’s sustainability targets. However on a yoy basis, the growth was much lower at just 7%.

During May ‘23, Green Day-Ahead Market (G-DAM) achieved 199 MU volume with a weighted average price of Rs 5.20 per unit. The market saw participation from 181 market participants during the month.

The Green Term-Ahead Market (G-TAM) achieved 158 MU volume in May ‘23, with average monthly price of Rs 3.47/unit for Solar, Rs 5.43/unit for Non-Solar and Rs 5.14/unit for Hydro. The sharp drop in solar prices since last year (Rs 7.79 in April)  might explain the actual shrinkage in trading here.

RENEWABLE ENERGY CERTIFICATE MARKET (REC MARKET)

A total of 1.42 lac RECs were cleared in the trading session at IEX held on Wednesday, 31st May, with price of Rs. 899/REC. The order passed by the Delhi High Court on 11th May 2023, vacating its earlier order that suspended trading of RECs issued prior to 31st October 2022, led to availability of additional REC inventory.

The next REC trading session at the Exchange is scheduled on Wednesday, 28th June ‘23.

ENERGY SAVING CERTIFICATES (ESCerts)

During May ’23, 2.02 lac ESCerts (equivalent to 202 MU) were traded on IEX, at the floor price of Rs. 1,840 per ESCert.