Power trading heats up at IEX

Traded volumes in electricity at IEX (Indian Energy Exchange) has grown by a strong 25 per cent in 2020 in the first ten months.

Higher volumes in the Day-Ahead market (DAM) at 45,744 million units (vs. 37,770 million units in the same period last year) and introduction of the Real Time Market (RTM) for electricity trading since June, have contributed to the jump. In RTM, the cumulative volume traded since June was recorded at 4,120 mu (million units).

Trading in the Green Term-Ahead Market (GTAM), introduced in August, has also been good with cumulative volume in the period between August and November at 402.38 mu (solar – 352 mu and non-solar at 50 mu).

IEX has been in operation since 2008 and is one of the two power exchanges in the country. The exchange has over 6,700 stakeholders with 50+ distribution utilities and 500 conventional power generators.

Recovery in price

As per the statistics, there has been sharp recovery in volumes and price at the exchange since the lockdown in March-April.

Volumes in DAM which were reported at 3,917 mu, have recovered and now reported at 6,163 million units in October.

Average price for the month of October was ₹2.74/unit, up from ₹2.42/unit in April, and higher over last October’s ₹2.71/unit. However, average price of power is down 18 per cent this year.

Rohit Bajaj, Head and Senior Vice President - Business Development, IEX, told BusinessLine,

“Throughout the Covid-19 lockdown, energy markets have played an instrumental role in facilitating competitive, flexible and efficient power procurement for distribution utilities and industrial consumers. The continued higher sell side liquidity has helped ensure availability of power in the market at attractive prices.”

Low cost power

He added, “The sell side volume has been about twice the buy side volume during January to October 2020 which has led to an average price of ₹2.59 per Unit on IEX’s Day-Ahead Market. This has enabled utilities to replace their costlier generation with low cost power in the Exchange and accrue greater savings while rendering significant support in improving their financial liquidity during the crisis”.

Many distribution utilities from across States including Andhra Pradesh, Telangana, Maharashtra, Gujarat, Rajasthan, Delhi, Haryana, Punjab and UT Jammu and Kashmir have increased their power procurement through the exchange.