Electricity volumes on IEX drop 7% due to supply side constraints as temperature rises

The electricity volume on the IEX in February registered a 6% decline on y-o-y basis at 7,673 MU and 7% on m-o-m basis due to supply side constraints
Electricity volumes on IEX drop 7% due to supply side constraints as temperature rises
Electricity volumes on IEX drop 7% due to supply side constraints as temperature risesPSU Watch

New Delhi: The electricity volume on the Indian Energy Exchange (IEX) in February registered a six percent decline on year-on-year (y-o-y) basis at 7,673 MU and seven percent on month-on-month (m-o-m) basis due to supply side constraints. The overall volume on the exchange during the month was 8,200 MU, a degrowth of seven percent on y-o-y basis. “While the average daily volume traded on the Exchange increased in February ‘23 by five percent m-o-m, the overall volume declined five percent m-o-m due to lesser trading days vis-à-vis the previous month,” said a statement.

“Sell side liquidity continued to be affected due to high input costs. Demand for power increased due to unusually warm temperatures witnessed in February across several parts of the country and sustained momentum in economic activities. The energy met in the country during February ’23 stood at 118 BU, nine percent higher on y-o-y basis, as per data published by the National Load Dispatch Centre,” said the IEX.

Supply constraints are expected to ease in the coming months due to the conducive policy and regulatory initiatives, said the IEX. “These initiatives will lead to an increase in coal and gas-based generation, resulting in higher liquidity on the exchange in the coming months. This will provide cost optimisation opportunities to discoms and Open Access consumers,” it added.

Electricity volumes on IEX drop 7% due to supply side constraints as temperature rises
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IEX Day-Ahead, Term-Ahead and Real-Time Market

The Day-Ahead Market volume decreased from 4,893 MU in January to 4,664 MU In February, ie five percent degrowth on m-o-m basis. The Day-Ahead Market volume was lower by 17 percent on y-o-y basis due to high prices resulting from a constrained supply scenario, which led to continued high spot e-auction coal prices.

The Real-Time Electricity Market (RTM) achieved 1,714 MU volume during the month, registering 10 percent y-o-y growth. There were 722 participants in this segment during the month. The consistent growth of RTM segment reflects its relevance to distribution utilities and industries for efficiently balancing their power demand-supply in real-time basis.

The Term-Ahead Market (TAM), comprising intra-day, contingency, daily and weekly contracts, and contracts upto 3 months, traded 954 MU during the month, an impressive increase of 81 percent on y-o-y basis and five percent on m-o-m basis.

Green Market: Green Day-Ahead & Term-Ahead market

IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved 341 MU volume during February, down two percent on m-o-m basis.

The Green Day-Ahead Market achieved 250 MU volume with a weighted average price of Rs 6.57 per unit. The market saw participation from 203 market participants during the month, with the highest number of participants in a single day at 159 on February 22.

The Green Term-Ahead Market achieved 91 MU volume with an average monthly price of Rs 8.22/unit for non-solar and Rs 10.18/unit for hydro.

Electricity volumes on IEX drop 7% due to supply side constraints as temperature rises
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REC Market

A total of 3.74 lakh RECs were cleared in the trading session at IEX held on Wednesday, February 22, with a cleared price of Rs 1,000/REC. In the corresponding month last year, 6.12 lakh RECs were traded.

The next REC trading session at the exchange is scheduled on March 29.

IEX resumes trading of ESCerts

Trading of ESCerts under PAT Cycle II resumed on the IEX platform from February 14. Trading takes place every Tuesday from 1300 hrs to 1500 hrs. The floor price for trading is fixed at 10 percent of the price of one Mtoe of energy consumed, as notified by the Central government, which translates to Rs 1,840.

In February, 1.54 lakh ESCerts (equivalent to 154 MU) were traded on IEX, with 97 percent market share. IEX pioneered trade in ESCerts under PAT Cycle I in 2017 with 100 percent trade on its platform.

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