Reading Time: 5 minutes
Access Power on Demand in the most Reliable, Efficient & Flexible
Indian Energy Exchange Limited (IEX)
IEX is the first and largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates (RECs) and ESCerts (Energy Saving Certificates). The exchange platform enables efficient and competitive price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed, flexibility and efficiency of trade execution. The Exchange is now a publicly listed company with NSE and BSE. IEX is approved and regulated by Central Electricity Regulatory Commission (CERC) and has been operating since 27 June 2008.
Electricity Market: Day-Ahead Market (DAM) & Term-Ahead Market (TAM) offer contracts to trade in electricity for the same day to upto 11 days in advance on a 24*7 basis. DAM offers standardized contracts of 15 minutes allowing participants to trade in electricity a day in advance. It is a delivery based market that provides flexibility to trade as low as 100 KW and facilitates price discovery for every fifteen minutes block for the next day as well an overall price discovery on a daily basis.
IEX has consistently been a market leader ever since its inception in 2006 with avg. market share of 97% in electricity market during the financial year 2019. The electricity volumes represent a growth of 13% from 46,215 million units in FY18 to 52,168 million units traded in FY19 on the Exchange. With competitive tariffs in exchanges, industrial consumers across many states are increasingly buying electricity from the power exchange. In fiscal 2018-19 the DAM traded 50,063 MU at an average price of Rs. 3.86 per unit while TAM traded 2,105 MU. The electricity traded through IEX contributes to 36% of the power transacted in the short-term market.
The prices discovered on the Exchange have been far more competitive vis-à-vis prices in the bilateral market as can be seen in the graph below compiled based on the CERC data.
Power market goes ‘Green’: The Exchange has been working enthusiastically towards integrating renewable generators – solar, wind and biomass generators on its platform. Already, several solar energy generators equipped with improved forecasting technique, are already participating in the Day Ahead Market. These generators are able to bid and schedule power through the exchange platform with very great precision and minor deviations with their net commercial realization being considerably higher vis-à-vis prices discovered in the recent solar and wind auctions. In FY19, 23 solar generators comprising of capacity over 1,072 MW were registered and sold solar energy through day ahead market on the Exchange.
The Renewable Energy Certificate (REC) Market provides a competitive platform to obligated entities (like Distribution companies, Open access, captive consumers) to meet their Renewable Purchase Obligations (RPO), by purchasing green attributes in the form of certificates. In fiscal 2018-19, the REC Market traded 89.56 lac RECs.
Energy Saving Certificate (ESCerts) Market – with the Government of India’s aggressive focus on energy efficiency and renewable energy as key to India’s development goals, IEX became the first Power Exchange to commence trading in ESCerts in September 2017. A total of 12.98 lacs ESCerts were traded from September’17 until January’18.
The volumes traded in the short-term market in the last five years have remained more or less at about 12% of the total generation. However, with robust transmission, better liquidity on supply side and growth in demand, the short-term power market should be able to achieve a much higher growth in the near term. In so far the existing markets are concerned going forward our endeavor would be to:
- Promote SMART procurement and optimize power purchase cost for distribution companies with introduction of new IT tools.
- Integrate greater number of renewable energy generators in exchange platform and facilitate them to sell their green power through Green Term Ahead Market (G-TAM).
- Introduce new bid types in day-ahead and term-ahead markets to help both buyers and sellers to participate in the Exchange more efficiently.
- Pursue policy advocacy on deepening of power market.
With rich market experience and consistent market leadership gained over the last decade we aspire to foray into the following new products and market segments going forward:
- Cross-border trade in electricity
- Long duration contracts
- Real-time Market
- Data Analytics
- Technology Advisory
- The Gas Exchange
As a young and vibrant company with immense talent and entrepreneurship in its fold, IEX aspires to develop the energy market and take it to the new heights.