Average spot power price has increased over 10 percent in May to Rs 2.83 per unit compared to same month a year ago at Indian Energy Exchange (IEX) due to low base effect. The average market clearing price was Rs 2.57 per unit in day-ahead market (DAM) in May 2020, as per the IEX data.
The average spot power price in DAM at IEX was Rs 3.34 per unit in May 2019. According to the power ministry data, electricity consumption had slumped nearly 15 percent in May 2020 due to lower commercial and industrial demand and showed impact of lockdown restrictions.
This year also, many states imposed lockdown restrictions to contain the spread of COVID-19 amid its second wave in May. Besides, two cyclones last month also affected power consumption. An IEX statement said that the DAM traded 4,364 MU (million units) volume in the month of May 2021 with the average monthly price at Rs 2.83 per unit.
The market clearing price saw a steep decline of 24 percent on MoM (month-on-month) basis since average monthly price was Rs 3.70 in the month of April 2021, it added. The sell-bids at 2.2 times of the cleared volume during the month (of May) ensured ample availability of power and discovery of competitive prices thereby providing optimisation opportunities to the distribution utilities, it explained.
According to the statement, IEX traded 6,540 MU of electricity volume in May 2021 achieving 9 percent YoY (year-on-year) growth amidst the continuation of the COVID-19 lockdowns as well the cyclonic disturbances which affected the overall power demand in the country. The real-time electricity (RTM) market witnessed a monthly volume of 1,436 MU with average monthly price at Rs 2.53 per unit seeing 28 percent MoM decline, it stated.
With sell-side bids at 2.6 times of cleared volume, the market continued to have ample availability of power and competitive price discovery, it explained. The RTM emerged as a great support to the southern and western coastal states that were hit by the cyclone Tauktae and facilitated them in real-time power demand-supply balancing at competitive prices with a great reliability, it added.
The market recorded the highest-ever single-day volume of 74 MU on 29 May 2021, since its inception on June 1, 2020. The term-ahead market comprising intra-day, contingency, daily and weekly contracts traded 383 MU during the month.
The green term-ahead market traded the highest ever volume of 357 MU during May 2021 comprising 194 MU in the solar segment and 164 MU in the non-solar segment, achieving a significant growth of 92 percent MoM, it stated. A total of 43 participants participated during the month with distribution utilities from West Bengal, Bihar, Haryana, Telangana, Karnataka, Uttar Pradesh, Goa, and Gujarat among others, as key participants.
The market has become a key facilitator of green power trade among distribution utilities, industrial consumers, and green generators offering the most competitive and viable avenue. The recently launched Cross Border Electricity Trade achieved 119 MU volume in the month of May 2021, it said.
While Nepal has already been participating actively in the day-ahead market on the IEX, the other South Asian countries are expected to join in soon, it added. The market will be instrumental in developing an integrated South Asian regional power market ecosystem and support the efficient and sustainable growth of the energy sector in the region, it opined.