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New Delhi: Indian Energy Exchange (IEX), the country's leading energy exchange, reported significant trading volumes and declining prices during May 2023. The exchange recorded an overall volume of 8,251 MU, including green market trade of 358 MU, 1.42 lakh RECs (equivalent to 142 MU), and 2.02 lakh ESCerts (equivalent to 202 MU). Compared to the previous year, the overall volume increased by 8 percent on a year-on-year basis (YoY).
The average price in May 2023 was Rs 4.74 per unit, marking a 30 percent YoY decline from Rs 6.76 per unit in May 2022. The price decrease can be attributed to an improving supply-side scenario, which resulted in increased liquidity, as well as cooler weather conditions.
With an expected increase in power demand in the upcoming months, supply-side liquidity is anticipated to improve further due to enhanced coal supply, reduced e-auction coal prices, and consistently declining imported coal and gas prices. These factors are expected to lead to competitive prices and higher clearance for Distribution Companies (Discoms) and Open Access consumers.
According to data published by GRID-INDIA, the country's energy met during May 2023 stood at 136.5 BU, showing a marginal one percent increase YoY. IEX recently introduced the Tertiary Reserve Ancillary Services (TRAS) Market Segment for Day-Ahead Market Ancillary Services (DAM-AS) and Real-Time Market Ancillary Services (RTM-AS) from June 1.
In the Day-Ahead Market (DAM), the trading volume increased to 4,066 MU in May 2023, a 26 percent YoY growth compared to 3,224 MU in May 2022. The average market clearing price during the month was Rs. 4.74 per unit, representing a 30 percent decrease from the corresponding month last year.
The Real-Time Electricity Market (RTM) achieved its highest-ever monthly volume of 2,424 MU in May 2023, recording a 13 percent on month-on-month (MoM) and 5 percent YoY growth. The segment attracted participation from 719 participants during the month, reflecting its increasing acceptance among distribution utilities and industries for real-time power demand-supply balancing.
The Term-Ahead Market (TAM), which includes intra-day, contingency, daily, and weekly contracts, and contracts up to three months, traded 1,058 MU in May 2023, an 11 percent YoY decline.
In the IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, a total volume of 358 MU was achieved in May 2023, showing a 28 percent MoM growth. This market segment plays a crucial role in integrating renewable energy sources to support India's sustainability targets.
During May 2023, the Green Day-Ahead Market (G-DAM) achieved a volume of 199 MU, with a weighted average price of Rs 5.20 per unit. The market saw participation from 181 market participants throughout the month. Additionally, the Green Term-Ahead Market (G-TAM) traded 158 MU, with average monthly prices of Rs 3.47 per unit for Solar, Rs 5.43 per unit for Non-Solar, and Rs 5.14 per unit for Hydro.
The RECs, which were cleared at a price of Rs 899 per REC, experienced an increased availability due to an order passed by the Honorable Delhi High Court on May 11. The court's decision to lift the suspension on trading RECs issued prior to October 31, 2022 resulted in the availability of additional REC inventory, boosting trading activities in the market. The successful trading session not only signifies a positive development for the renewable energy sector but also encourages the fulfillment of India's sustainable energy goals.
Looking ahead, the next REC trading session at the Indian Energy Exchange is scheduled to take place on Wednesday, June 28, providing further opportunities for stakeholders to participate in the renewable energy market and contribute to India's green transition.
In addition to RECs, the IEX also facilitated the trading of 2.02 lakh ESCerts during May. These certificates, equivalent to 202 MU, were traded at a floor price of Rs 1,840 per ESCert. The trading of ESCerts showcases the commitment of market participants towards energy conservation and incentivises energy-saving practices across industries.
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