Renewable Energy Trading Up by 61% MoM to 453 MU at IEX in February 2022 (1)

The Indian Energy Exchange (IEX) traded 453 million units (MU) of renewable energy in February 2022, a 61% month-over-month (MoM) increase compared to 280 MU traded in the previous month.

The Exchange traded 8.76 billion units (BU) of energy during the month, a 29% year-over-year (YoY) growth. Energy consumption increased 2.2% YoY to 105.5 BU in the month.

In February 2022, the peak power demand stood at 193.6 GW, with a 3% YoY growth.

Shruti Bhatia, Head of Corporate Communication, IEX, said, “One of the key reasons behind the increase in volume is that the discoms and C&I consumers now have access to multiple market-based mechanisms to procure renewable energy in a competitive, transparent, and flexible manner. Participants are leveraging both Day-Ahead and Term-Ahead contracts under the Green Market to meet their demand-supply requirements and as well as to fulfill their RPO obligations. We are optimistic about an even further increase in volume since green is the way ahead from now on.”

Green Market: Day-Ahead and Term-Ahead

IEX Green Market comprising the day-ahead and term-ahead market segments traded 453 MU volume during February’22.

The Green Day-Ahead Market (GDAM) traded 191 MU of energy with the weighted average price of ₹4.78 (~$0.063)/kWh. In February 2022, 188 participants took part in the trading.

The Green Term-Ahead Market (GTAM) traded 262 MU during the month with 51 participants. IEX said the average monthly price of solar energy stood at ₹3.93 (~$0.052)/kWh and non-solar energy at ₹4.72 (~$0.062)/kWh during the month.

The key distribution companies (DISCOMs) from Delhi, Himachal Pradesh, Haryana, Telangana, Karnataka, Daman & Diu, and West Bengal and several industrial consumers participated in the trading.

In an order dated February 24, the Central Electricity Regulatory Commission (CERC) has allowed the Exchange to introduce hydropower contracts in GTAM. This move will facilitate the compliance of hydropower purchase obligation (HPO) by the obligated entities. In the proposed contracts, participants would be able to trade under intra-day, day-ahead contingency, daily, and weekly contracts.

Electricity Market: Day-Ahead, Term-Ahead, Real-Time

In February 2022, the Day-Ahead Market traded 5.61 BU and registered a 9.5% YoY growth. However, the average market clearing price increased 31% YoY to ₹4.44 (~$0.058)/kWh during the month due to low generation from imported coal-based power projects.  The imported coal prices continued to rise with the demand for power across states.

The Term-Ahead Market comprising intra-day, contingency, daily, and weekly contracts, traded a total of 527 MU, a YoY growth of 22%.

During the month, the Real-Time Electricity Market (RTM) traded 1.55 BU with a 39% YoY growth and an average monthly price of ₹4.35 (~$0.057)/kWh. The market achieved the highest single-day volume of 89 MU on February 22.

IEX said, “During February 2022, 519 participants transacted in the Exchange’s RTM market. The consistent growth in volumes in this market segment indicates the significance of this segment for both distribution utilities and industries in balancing real-time power demand-supply requirements.”

Renewable Energy Certificate Market

IEX traded 612,000 renewable energy certificates (RECs) in February 2021, including 444,000 non-solar RECs and 167,000 solar RECs. The exchange discovered a price of ₹2,300 (~$30.20) per certificate for solar RECs and ₹1,000 (~$13.13) per certificate for non-solar RECs.

The Exchange has scheduled the next REC trading session for March 30, 2022.