IEX Electricity Market Trades 3,825 MU In November’19; A 7% Y-On-Y Increase

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The electricity market at IEX recorded a total trade of 3825 MU in November 2019. The market observed a 7% Y-on-Y increase in traded volumes, which was a result of increased procurement by the eastern and southern states. This upsurge demonstrates the growing preference for the exchange platform enabling power-on-demand at the most competitive pricing and flexible procurement for market participants.

The day-ahead market traded 3389 MU with an average market clearing price at only Rs 2.85 per unit vs price of Rs. 3.58 in November 2018, a 20% decline in price, making the marketplace more attractive as well as viable for both distribution utilities and open access customers.

In the day-ahead market (DAM), total monthly sell bids were 8,579 MU while buy bids were 4,108 MU. With sell bids at over two times of the buy bids coupled with lower clearing prices, helped discoms as well as commercial & industrial consumers to save costs and optimize power procurement costs. Looking at the available historical trends and low demand scenario, this trend is likely to continue during the winter months.

One Nation, One Price prevailed for 26 days during the month. The inter-state congestion for the remaining days was on account of import of power to southern states.

In the term-ahead market (TAM), volumes rose 157% Y-on-Y rise on the back of a growing number of distribution utilities turning to TAM contracts especially intraday, daily, weekly for meeting their short-term power demand.

All India peak demand at 156 GW in November’19, declined 4% over demand of 162 GW in November’18 and the energy met at 3.3 BU declined 5% YoY and according to the NLDC data. The primary reasons for this decline was economic slowdown as well as early onset of winters.

On 27th November, the REC market at IEX saw a total trade of 3.29 lac Renewable Energy Certificates comprising of 2.92 lacs Non-Solar RECs and 0.37 lacs Solar RECs.

The price for Non-Solar RECs (issued after 1.4.17) at Rs. 1,800 increased 9% from Rs. 1,650 in October’19 and price for Solar RECs at Rs. 2,400 remained unchanged from October’19.

The continuing increase in REC prices has mainly been due to shortfall on account of low inventory since March 2019.

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