IEX day-ahead market prices soften further in June

The average market clearing price in the day-ahead market (DAM) on the Indian Energy Exchange cooled further in June, from the record high prices in April 2022, helped by increased availability of power and monsoon rains providing respite from record summer temperatures.

“IEX achieved 8,267 million unit volume in June comprising 7,058 MU in conventional power market, 536 MU in Green Power Market and 673 MU (6.73 lakh certificates) in the REC market, registering 17 per cent y-o-y volume growth across all market segments. Owing to improved supply-side availability, prices at the DAM reduced to ₹6.49 per unit in June 2022 from ₹6.76 in May,” it said in a statement.

Analysts said that prices have also declined due to better renewable energy and hydro generation. During June, the energy consumption at 134 billion units (BU) saw 17 per cent Y-o-Y growth on a high base while the national peak demand at 212 GW saw 11 per cent y-o-y growth.

India’s green energy generation has been steadily increasing aided by the government’s push to clean energy transition. Total renewable energy generation during June 2022 grew 8 per cent y-o-y on a provisional basis to hit 18,501.27 MU. During Q1 FY23, RE generation rose 26 per cent on an annual basis to hit 54,491.10 MU.

Market volume

The Day-Ahead Market volume at 4,085 MU saw a de-growth of 5 per cent y-o-y and growth of 29 per cent m-o-m during June. While, in the Term-ahead Market comprising intra-day, contingency, daily and weekly contracts traded 759 MU, registering 18 per cent y-o-y growth.

The Real-time Electricity Market achieved 2,214 MU volume during the month, registering a growth of 28 per cent y-o-y. The highest single-day volume of 96.43 MU was achieved on June 14.

The Green DAM achieved 362 MU volume in June with the weighted average price of ₹5.94 per unit and saw participation from 148 market participants. Whereas, the Green TAM achieved 173 MU volume and witnessed participation from 24 market participants.

The average monthly price for solar was ₹3.83 per unit for non-solar ₹8.13 and for hydro ₹6.75 a unit.

Supply side addressed

The average market clearing price in the real time and day-ahead markets, which account for a majority of the trade on IEX, had skyrocketed by almost 200 per cent between January and April this year to ₹10.06 per unit and ₹9.56 a unit, respectively.

Experts attributed the surging prices to idle imported coal based (ICB) and gas-based power plants due to high global prices of the two commodities. Besides, with ICB plants also dependent on domestic coal, the supply lines were stretched further increasing pressure on plants to secure coal.

However, during May due to various measures by the government to address supply side constraints and increased RE power (44 per cent y-o-y increase) and hydro power generation (8 per cent y-o-y increase), the day-ahead market on IEX saw significant correction in prices which reduced by 33 per cent to ₹6.76 per unit in May.

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