The Indian Energy Exchange (IEX) witnessed a decline of 7% in its total trade volume in February, due to lower availability of electricity. In a statement, IEX said that the sell-side liquidity remained affected due to high input costs. The overall trade volume in February was 8,200 million units (MU), which included 7,673 MU of conventional power, green power trade of 341 MU, 3.74 lakh of Renewable Energy Certificates (equivalent to 374 MU), and 1.54 ESCerts (equivalent to 154 MU). The demand for power increased due to warmer temperatures across several parts of the country, and sustained momentum in economic activities. The average daily volume traded on the IEX increased 5% on a month-on-month basis in February, while the overall volume declined 5% month-on-month due to fewer trading days vis-a-vis the previous month.
According to IEX, supply constraints are expected to ease in the coming months due to conducive policy and regulatory initiatives that will lead to an increase in coal and gas-based generation. This will also provide cost optimization opportunities to discoms and open access consumers. The bourse expects that the measures taken will help in increasing the supply of electricity and enable it to meet the growing demand for electricity in the country.
The electricity volume on the IEX in February 2023 at 7,673 MU registered a 6% decline on the year-on-year basis and 7% on the month-on-month basis. The Day-Ahead Market volume decreased to 4,664 MU in February from 4,893 MU in January. On the year-on-year basis, the Day Ahead Market volume was lower by 17% 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 a volume of 1,714 MU in February, representing an annual growth of 10%. The Term-Ahead Market (TAM), which comprises intra-day, contingency, daily and weekly contracts, and contracts up to 3 months, saw trading of 954 MU in February. This is an increase of 81% compared to the year-ago period.
IEX resumed trading of ESCerts on February 14 after a gap of 14 months. The IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved a volume of 341 MU in February. A total of 3.74 lakh RECs were cleared in the trading session at IEX held on February 22. The clearing price was Rs 1,000/REC.
The IEX is taking various measures to increase the supply of electricity to meet the growing demand for electricity in the country. IEX believes that the initiatives taken will help in providing cost optimization opportunities to discoms and open access consumers. The bourse is hopeful that the conducive policy and regulatory initiatives will lead to an increase in coal and gas-based generation.
The IEX Green Market continues to provide an alternative platform for market participants to trade in green power. The platform provides a reliable, transparent, and efficient mechanism for buyers and sellers to participate in green power trading. The platform achieved a volume of 341 MU in February. The bourse is optimistic that the volume traded in the Green Market will increase in the coming months, as the demand for green power continues to grow in the country.
