IEX Sees Record Trading Volumes in May 2024
This surge was driven by a 21 percent YoY rise in electricity volumes, totaling 9,568 MU, and a 640.3 percent YoY increase in Renewable Energy Certificates (REC) trading, amounting to 1,055 MU.
June 06, 2024. By Abha Rustagi
This surge was driven by a 21 percent YoY rise in electricity volumes, totaling 9,568 MU, and a 640.3 percent YoY increase in Renewable Energy Certificates (REC) trading, amounting to 1,055 MU. Notably, the REC market recorded a low price of INR 165 per certificate during the trading session on May 29, 2024. This price reduction provides a strategic opportunity for obligated entities, including DISCOMs and Captive Power Producers, to meet their Renewable Purchase Obligations, and for voluntary customers to advance their sustainability aspirations.
The rise in trading volumes and the stable pricing can be attributed to several government initiatives aimed at improving sell liquidity on the exchange. These initiatives include the sale of surplus un-requisitioned power, increased fuel supply, and enhanced availability of generating units. As a result, despite a significant increase in electricity consumption, the market clearing price in the Day-Ahead Market (DAM) for May 2024 was INR 5.3 per unit, which is over 20 percent lower than the prices discovered under bilateral contracts.
According to government data, the country's energy consumption for May 2024 reached 156.3 billion units (BU), representing a 15 percent YoY increase. On May 30, 2024, India witnessed an all-time high peak demand of 250 GW and the highest ever single-day energy consumption of 5,466 MU.
The Day-Ahead Market (DAM) saw its volume increase by 7.5 percent YoY to 4,371 MU. The Real-Time Market (RTM) achieved its highest-ever monthly volume of 3,352 MU, reflecting a 38.3 percent YoY increase, with daily trades averaging over 100 MU. The Term-Ahead Market (TAM) traded 1,221 MU, up by 15.4 percent YoY.
The Green Market, comprising the Green Day-Ahead Market (G-DAM) and the Green Term-Ahead Market (G-TAM), achieved a total volume of 622.2 MU, a 73.9 percent YoY increase. The G-DAM recorded 574.7 MU with an average price of INR 3.86 per unit, while the G-TAM traded 47.5 MU at an average price of INR 8.06 per unit for Non-Solar energy.
In the REC market, a total of 10.55 lac RECs (equivalent to 1,055 MU) were traded in May 2024 at clearing prices of INR 185/REC and INR 165/REC, the latter being the lowest price since the market's inception. The next REC trading sessions are scheduled for June 12 and June 26, 2024.
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