Indian Energy Exchange (IEX) looks to tap emerging tech-based opportunities like smart power procurement, analytics, new product development, demand forecasting and use of blockchain and artificial intelligence (AI).
By leveraging technology, IEX aims to scale the next level of optimisation and efficiency in operations.
IEX is the biggest player in spot energy trading with a share of 97 per cent. The energy exchange boasts of participation of over 6,500 players, added up by industries, electricity distribution companies (discoms), thermal power generators, renewable energy generators and obligated entities. IEX recorded a compounded annual growth rate (CAGR) of 16.5 per cent in the volume of electricity transactions between FY15 and FY19.
To deepen its presence in power trading market, IEX intends to maximize the participation of discoms and open access volume, introduce long-duration contracts from one to 365 days and tap cross border trade with Nepal, Bhutan, Bangladesh and Myanmar, an investor presentation showed.
In the September quarter, IEX traded 14565 million units (MU) of electricity, marking a growth of 2.9 per cent year-on-year (y-o-y). Its total revenue in the quarter rose 4.7 per cent to Rs 78.7 crore whilst net profit expanded by 14.4 per cent at Rs 48.8 crore.
Overall growth in energy consumption and peak demand during the quarter was subdued at 1.6 per cent y-o-y and 1.1 per cent y-o-y respectively, largely due to changing weather patterns and impact of economic slowdown, specifically manufacturing.
The IIP (Index of Industrial Production) de-growth at -1.1 per cent, in August 2019 was the lowest since November 2012 and more recently, the Reserve Bank of India (RBI) made a downward revision to the GDP (Gross Domestic Product) forecast by 80 basis points to 6.1 per cent for the fiscal year 2020. The effect of climate shift made the country experience September as the wettest month in more than 100 years which led to significant growth of nine per cent y-o-y in hydro generation during the quarter.
Total installed generation capacity increased by 4.6 per cent to 362 Gw. In line with India’s commitment to increase the share of green energy, the renewable capacity increased by 13 per cent y-o-y as of September 2019 to 81 GW from 72 GW in September 2018.
The total volume traded in the electricity market increased three per cent y-o-y in Q2 of FY20. Average market-clearing price during this period declined 18 per cent to Rs 3.16 per unit, offering an opportunity for both commercial and industrial users to procure electricity at lower rates.
IEX logged a robust performance in the term-ahead market where volumes soared 425 per cent during the quarter led by an increase in trade by the distribution utilities in the southern states under the daily and weekly contracts. But REC (Renewable Energy Certificates) volumes were severely impacted during Q2, pulling down the overall exchange volumes by eight per cent.