IEX sees record-high volume in July; electricity prices continue to drop

Electricity traded on IEX rose 25.5% to 12,664 MU in July, led by higher supply; average Day-Ahead and Real-Time prices dropped despite strong demand and market reforms

Indian Energy Exchange (IEX), India’s premier electricity exchange, witnessed a 25.5 per cent increase in electricity traded volumes in July, reaching 12,664 million units (MU). However, prices continued to decline.

 

The Day-Ahead Market (DAM) registered a 9 per cent rise in volumes to 5,510 MU, while the Real-Time Electricity Market (RTM) saw a sharp 53 per cent increase to 5,109 MU.

 

According to government data published last month, India’s energy consumption reached 153.6 billion units (BUs), an increase of 2.6 per cent year-on-year (Y-o-Y). Despite the higher demand, prices on power exchanges were lower than last year due to increased supply-side liquidity.

   

The average market clearing price in the Day-Ahead segment fell 16 per cent Y-o-Y to ₹4.18 per unit, while Real-Time Market prices declined 23 per cent to ₹3.83 per unit.

 

IEX’s Green Market — comprising the Green Day-Ahead Market (G-DAM) and Green Term-Ahead Market — recorded 1,025 MU last month, up from 990 MU a year earlier. The weighted average price in G-DAM for July was ₹3.91 per unit.

 

In the Renewable Energy Certificate (REC) segment, 1.63 million certificates were traded last month, down 48 per cent Y-o-Y.

 

The IEX stock has fallen over 30 per cent in the past month following negative sentiment around market coupling norms, which continue to weigh on investor sentiment.

 

The Central Electricity Regulatory Commission (CERC) has approved the implementation of market coupling norms for the Day-Ahead Market, in line with the Power Market Regulations of 2021.

 

Under Phase I, coupling of DAM will be implemented by January 2026, where different power exchanges will act as Market Coupling Operators (MCOs) on a round-robin basis.

 

The decision, which goes against a report submitted by Grid India, is viewed as a negative for IEX, as it could weaken its position as the leading platform for price discovery.

 

The introduction of market coupling could shift significant trading volumes to rival exchanges. At present, IEX holds nearly 85 per cent of the spot power market share.

 

A market coupler will collect all buy and sell orders from every exchange and aggregate them to determine a uniform market clearing price across platforms.

 

The CERC staff will also initiate stakeholder consultations on DAM coupling and propose necessary regulatory amendments.

 

Grid India will act as the fourth MCO for backup and audit functions. It will also develop software for Term-Ahead Market coupling, conduct a three-month shadow pilot, and submit feedback upon completion.

 

For the Real-Time Market, coupling will be considered at a later stage after assessing the DAM experience, as further regulatory and operational inputs are needed.

 

Shares of IEX were trading 0.24 per cent higher on Tuesday at ₹134.30.