Power Exchange Prices Likely To Remain Competitive For Next 10 Months: IEX 

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The Indian Energy Exchange (IEX) claimed that with the global fuel prices coming down and other favourable conditions, the clearing prices in Indian power exchanges are likely to remain competitive for the next few months, unlike 2022-23. SN Goel, Chairman, and Managing Director of IEX, claimed that the trend would likely prevail for the next ten months. 

The projections were discussed during IEX’s media interaction in New Delhi. It was presided by Goel and Rohit Bajaj, Head-Business Development of IEX. Goel said that power prices at energy exchanges in India were higher last year due to escalated gas and imported coal prices, besides higher e-auction coal prices. He said it was also due to other geopolitical disruptions like the Ukraine war. He also claimed that the e-auction prices of coals in India witnessed a 300 percent rise last year. 

“Last year, the average clearing price of power at IEX was Rs 5.96 paisa per unit, a 36% increase from the average price in FY 22. It was due to an increase in demand and supply-side constraints. The liquidity in the market is good now. In the first two months of May and April this year, the average clearing price at IEX was about Rs 5 per unit, 40 percent less than in the same months of 2022. If the same trend continues, the clearing prices at IEX will likely remain competitive for the next ten months. It will allow discoms and open access consumers to get a good deal during the period to trade power through IEX,” Goel told reporters. 

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Goel also gave a report card of the growth of IEX in the last few years. “We traded 2 billion units in 2009, and last year were able to trade 100 billion units, indicating our capacity additions. Till now, IEX has witnessed trading of 700 billion units in the last 15 years with a CAGR of 30 percent since inception. We have around 90 percent share of power trading through exchanges among the three power exchanges. In addition, we have a 100% share in the collective segment, which includes the day-ahead market and Real Time Market,” Goel said.

He also added that there are 7,500 participants at IEX. It included 4,500 industrial consumers, 600 registered generators, 58 discoms, and 1,500 renewable energy participants. He also said that IEX started with a single product-Day-Ahead Market in 2008, but now it has around 14 products to offer. 

Bajaj, meanwhile, shared more insights into the growth of IEX and power exchanges in India. He said that reports indicate that most power transactions in India happen through PPAs. Power exchanges in India have a market of 7 percent now but are on a growing chart. 

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He said that since 2018 its share has increased with a CAGR of 7 percent. He claimed that many renewable producers with surplus power and even several discoms are now opting for power exchanges due to lesser obligations and more flexibility in power transactions. IEX also said that it is already trade power with countries like Bhutan and Nepal and all set to start the services for Bangladesh too.