Comprehensive Analysis of IEX Performance in FY’24: Growth, Market Dynamics, and Regulatory Impact

In the fiscal year 2024, the Indian Energy Exchange, the country’s leading electricity exchange, achieved a significant milestone, recording a total of 110 billion units (BU), marking a notable 13.8% year-on-year (YoY) increase. The electricity volumes surged to 101.7 BU, reflecting a robust 12% YoY growth. Additionally, the trading of Renewable Energy Certificates (RECs) reached 7,539 million units (MU), equivalent to 75.39 lakh RECs, with a remarkable 26% YoY increase.

Government initiatives aimed at enhancing the supply scenario in the nation resulted in improved liquidity on the exchange’s sell side. This led to a 16.9% YoY increase in sell liquidity, consequently driving down Day Ahead Market (DAM) prices from Rs 5.94/unit in FY’23 to Rs 5.24/unit in FY’24, marking a 12% YoY decline.

In Q4 FY’24, the Indian Energy Exchange witnessed a substantial YoY increase of 15.7%, reaching 30.1 BU in total volume across all segments. This volume comprised 25.9 BU from the conventional power market segment, 1 BU from the green market segment, and 3.2 BU from Renewable Energy Certificates (RECs). The REC traded volume in Q4FY’24 surged by approximately 98% YoY. DAM prices also saw a significant decline from Rs 6.08/unit in Q4 FY’23 to Rs 4.89/unit in Q4 FY’24, marking a 20% YoY decrease.

In March’24 alone, the Indian Energy Exchange achieved an overall volume of 9.8 BU, indicating a 6.2 % year-over-year increase. The Market Clearing Price in the Day Ahead Market during March‘24 dropped by approximately 28% YoY to Rs. 3.91/unit due to increased sell quantum, with sell bids rising by approximately 37% YoY.

The fiscal year 2024 witnessed several favorable policy and regulatory interventions, such as the General Network Access (GNA) regulation, the Indian Electricity Grid Code (IEGC) regulations, and Transmission Charges Sharing regulations. Moreover, amendments in the Electricity Late Payment Surcharge Rules of 2024 mandated the sale of Unscheduled Interchange (UI) power on exchanges.

According to government data, the energy requirement surged to 1,626 BU, marking a 7.5% YoY growth in 2023-24.

The Indian Energy Exchange’s various market segments saw notable performance indicators. The Day-Ahead Market (DAM) witnessed increased volumes, achieving 4,653 MU in March’24, and a cumulative volume of 53,353 MU for FY’24. The Real-Time Electricity Market (RTM) also showed significant growth, reaching 2,786 MU in March’24 and 30,125 MU for FY’24. Additionally, the Day Ahead Contingency and Term-Ahead Market (TAM) traded 806 MU in March’24, with a cumulative volume of 14,944 MU for FY’24, showcasing a substantial 48% YoY growth.

In the Green Market segments, including the Green Day-Ahead and Green Term-Ahead Market, the Indian Energy Exchange achieved a volume of 426 MU in March’24 and 3,227 MU for FY’24. The Renewable Energy Certificate (REC) Market witnessed trading sessions with significant volumes, such as 11.14 lac RECs in March’24 and 32.48 lac RECs for Q4FY’24.

Moreover, Energy Saving Certificates (ESCerts) trading during FY’24 amounted to 8.55 lac ESCerts, equivalent to 855 MU, with trading for PAT Cycle III scheduled to commence from April 09, 2024.