48% Growth In Renewable Energy Certificate Trade At IEX, 35,793 Solar RECs Traded in May

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The electricity market at the Indian Energy Exchange registered a total trade of 6005 MU in May ‘20 marking a significant 47% YoY increase despite the national peak demand recording a 9% YoY decline during the month.

The market demonstrated a significant uptick mainly owing to the increase in demand and consumption in the month driven by seasonality factor – peaking summers leading to increased consumption across essential services, especially healthcare institutions, and households due to increase in work from home for corporate employees. Moreover, the steady lifting of the COVID-19 preventive lockdown enabled industries and commerce to get back to business, and thus consumption from C&I customers through open access also witnessed a rise.

The Day-Ahead Market (DAM) traded 5574 MU recording a significant 48% YoY increase. The total monthly sell bids at 10580 MU and buy bids were at 6137 MU. The buy-sell dynamics indicate ample power availability in the market – 1.7 times more sell than buy. The consequent lower prices provided a compelling proposition for the industries as well as the distribution utilities to meet their short-term demand as well as replace costlier generation with attractively priced power procured through the exchange.

The average market clearing price during the month was at Rs. 2.57 per unit registered a 23% decline YoY over price of Rs. 3.34 in May’19. IEX has rendered significant support in improving their financial liquidity during the crisis through greater savings which is very critical during this time as the sector looks for revival.

The low prices have prompted utilities from Southern, Western and Northern states such as Andhra Pradesh, Telangana, Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, Bihar and Punjab amongst others to continue procuring power through Exchange. This has enabled them to save significantly while procuring uninterrupted 24*7 power for all the critical sectors.

The Term Ahead Market (TAM) witnessed an increase of 36% YoY trading 431 MU volume. The distribution utilities showcased increased preference of TAM contracts.

One Nation One Price prevailed for all 31 days during the month.

REAL TIME ELECTRICITY MARKET (RTM)

The Exchange commenced trade in RTM on 31 May 2020 with delivery at 12:00 AM on 1 June 2020. The new market segment features an auction session every half an hour and 48 auction session through the day.

IEX has received an overwhelming response in last 2 days with a cumulative volume of 8.73 MU at an average price of Rs. 1.64 per unit.

More than 80 market participants including all the key power distribution, generation companies and open access consumers, traded on the day one itself, marking a grand start.

The market provides flexibility to the distribution utilities to manage their power demand-supply variation and meet 24×7 power supply aspirations in the most flexible, efficient, dynamic and cost competitive way. For generators, the RTM market provides an opportunity to sell their requisitioned capacity thereby enabling efficient use of generation capacity.

RENEWABLE ENERGY CERTIFICATE MARKET

The REC Trading Session at IEX on 27thMay, 2020 saw a total trade of 2.78 lac Renewable Energy Certificates comprising 2,42,714 Non-Solar RECs and 35,793 Solar RECs. There was 48% MoM increase in the cleared volume.

The price for Solar RECs was at Rs. 2000 per REC decreased at 16% from a continuing price of Rs. 2,400 since October ‘19. The reason for drop in solar price was marginal increase in supply and lower participation on the buy side. The price for non-Solar RECs -issued after 1.4.17, was at Rs. 1,000 per REC.

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