Renewables trade at IEX down 11% in October, weighted average prices fall

The Indian Energy Exchange (IEX) traded 403 million units (MU) of renewable energy in October 2022, down 11% month-on-month (MoM) from the 454 MU traded on last month.

The exchange traded CU7,972 of energy during the month. Total trading volume in October was 13% lower on a year-over-year basis (YoY) due to last year's high volume base and 2% lower on a monthly basis due to reduced trading from REC.

Improved domestic coal supply has eased supply-side constraints, leading to lower prices on IEX. The average clearing price in the daily market was ₹3.83 (~$0.046)/kWh in October, which was 32% lower on a monthly basis and 52% lower on a yearly basis.

The stock exchange suggests that a further price correction due to improved coal availability and reduced demand due to the onset of winter should provide an opportunity for cost optimization by distribution companies and open-access consumers, leading to increased volumes on the exchange. in the future.

According to electricity demand data published by the National Load Dispatch Center, power consumption at 115 BU in October 2022 increased by 1% on an annual basis, and on a monthly basis it decreased by 10%.

Green market: Day-ahead and Term-Ahead

The green market, comprising the green overnight market (GDAM) and the green futures market (GTAM), traded a volume of 403 MU during the month, an increase of 10% year-on-year.

The GDAM traded 293 MU with a weighted average price of ₹4.02 (~$0.048)/kWh. The weighted average price was ₹5.42 (~0.065USD)/kWh in the previous month. The market saw the participation of 721 market participants during the month, with the highest number of participants in a single day at 621 on October 9, 2022.

The GTAM traded a volume of CU110 during the month. The average monthly price for solar power was ₹3.77 (~$0.045)/kWh, compared to ₹5.05 (~$0.061)/kWh in the previous month, and for non-solar power it was ₹5.45 (~$0.065)/kWh.

Electricity market: daily, forward and real-time market

In October 2022, the Day-Ahead Market (DAM) traded CU4,325 of energy, growing 7% on a MoM basis. Market volume decreased by 34% on an annual basis due to high volume base last year. The market clearing price was ₹3.83 (~$0.046)/kWh.

The real-time electricity market reached a volume of CU2,265 during the month, registering a growth of 13% year-on-year with 630 participants. The highest daily volume of 124 MU was reached on October 6, 2022. According to IEX, the steady growth of the real-time electricity market indicates the growing dependence on distribution utilities and industries to achieve the balance between electricity demand and supply in real time. -time most efficiently.

The futures market comprising intra-day, contingent, daily and weekly contracts and long-term contracts traded at CU621 during the month, down 29% on a MoM basis. The segment grew by 176% on an annual basis.

Renewable Energy Certificates Market

October saw 358,000 CERs cleared, registering a 39% drop in MoM. The volume included 176,000 non-solar RECs with a clearing price of ₹1,000 (~$12.08)/REC. The increase in Solar REC inventory allowed the breakeven price to bottom at ₹1,000 (~$12.08)/REC with 182,000 Solar RECs traded. The next REC trading session is scheduled for November 30, 2022.

IEX recently reported an 8% year-on-year decline in after-tax profit from ₹774m (~$9.34m) to ₹712m (~$8.6m) in the second quarter of the 2022-23 financial year.

In June this year, IEX added new products to the existing longer contract portfolio, such as daily contracts up to 90 days, weekly contracts up to 12 weeks and monthly contracts up to three months. .