Indian Energy Exchange (IEX) Reports Record Trading Volumes and Lower Prices in June 2023

Indian Energy Exchange (IEX), the leading energy exchange in India, reported a remarkable performance in June 2023, achieving an overall trading volume of 8,946 million units (MU). This figure includes 272 MU traded in the green market, 5.33 lac Renewable Energy Certificates (RECs) equivalent to 533 MU, and 2.44 lac Energy Saving Certificates (ESCerts) equivalent to 244 MU. Compared to the same period last year, the overall volume witnessed an 8% growth. During the first quarter of the financial year 2024 (Q1 FY ’24), IEX recorded a trading volume of 25,125 MU across all segments, marking an 8% increase over Q1 FY ’23.

Throughout June 2023, the average price on IEX was Rs. 5.37 per unit, experiencing a 17% year-on-year decline. Additionally, the average market clearing price during the Q1 FY ’24 period was Rs. 5.17 per unit, indicating a significant decrease of 33% compared to the corresponding quarter last year. The supply side scenario experienced improvement due to enhanced coal supply, reduced e-auction coal prices, and consistently declining imported coal and gas prices. Due to increased liquidity on the Exchange prices underwent a sharp correction, creating optimization opportunities and facilitating higher clearance for Distribution Companies (Discoms) and Open Access consumers. According to data released by GRID-INDIA, the total energy generation in the country for June ’23 reached 140 billion units (BU), marking a 4.3% year-on-year increase.

Electricity Market

In the Day-Ahead Market (DAM), the trading volume rose to 4,103 MU in June ’23 from 4,065 MU in June ’22, representing a 1% year-on-year growth. The average market clearing price during the month was Rs. 5.37 per unit, reflecting a 17% decline compared to the corresponding month last year. The DAM segment recorded a trading volume of 12,501 MU during Q1 FY ’24, marking an impressive 11% growth over Q1 FY ’23, driven by improved prices.

The Real-Time Electricity Market (RTM) achieved its highest-ever monthly trading volume in June ’23, totaling 2,675 MU, demonstrating a significant 21% year-on-year growth. The segment attracted 765 participants during the month and RTM witnessed a trade volume of more than 100 MU for nine days. During Q1 FY ’24, the RTM segment achieved a trading volume of 7,252 MU, reflecting a 16% increase over Q1 FY ’23. The consistent growth of the RTM segment reflects the increasing acceptance among distribution utilities and industries, as it enables them to efficiently manage their power demand and supply on a real-time basis.

The Term-Ahead Market (TAM), which includes intra-day, contingency, daily, and weekly contracts, as well as contracts up to three months, recorded a trading volume of 1,118 MU in June ’23, indicating a 47% year-on-year increase. The total trading volume in the TAM segment during the quarter amounted to 3,017 MU, experiencing a marginal decline of 3% compared to Q1 FY ’23.

Green Market

The IEX Green Market, consisting of the Green Day-Ahead and Green Term-Ahead Market segments, achieved a trading volume of 272 MU in June ’23, compared to 540 MU in June ’22. In Q1 FY ’24, the segment achieved 910 MU.

In June ’23, the Green Day-Ahead Market (G-DAM) achieved a trading volume of 166 MU, with a weighted average price of Rs. 4.95 per unit. The market saw participation from 177 market participants during the month, while the segment achieved a trading volume of 524 MU during Q1 FY ’24.

The Green Term-Ahead Market (G-TAM) achieved a volume of 106 MU in June ’23, with the average monthly prices at Rs. 3.24 per unit for Solar, Rs. 5.76 per unit for non-Solar, and Rs. 6.28 per unit for Hydro. During Q1 FY ’24, the G-TAM segment achieved a volume of 386 MU.

Renewable Energy Certificate Market (REC Market)

During the trading session held on Wednesday, 28th June, a total of 5.33 lac RECs (equivalent to 533 MU) were cleared at IEX, with a price of Rs. 745 per REC. During Q1 FY ’24, the total trading volume for RECs reached 8.75 lac (equivalent to 875 MU). The next REC trading session at IEX is scheduled to take place on Wednesday, 26th July ’23.

Energy Saving Certificates (ESCerts)

A total of 2.44 lac ESCerts (equivalent to 244 MU) were traded on IEX in June ’23, at a floor price of Rs. 1,840 per ESCert. The total trading volume for ESCerts amounted to 5.69 lac (equivalent to 569 MU) in Q1 FY ’24.