The Indian Energy Exchange (IEX) has recently made headlines as it reached a record-breaking volume of 8,248.52 MU (million units) in March 2021, surpassing all previous milestones. The IEX, recognized as the first and largest energy exchange in India, provides a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates (RECs), and Energy Saving Certificates (ESCerts). The platform, which is regulated by the Central Electricity Regulatory Commission (CERC), enhances price discovery, transparency, and efficiency in India’s power market.
About the Indian Energy Exchange
The IEX, publicly listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), has been operational since 2008. It aims to leverage technology and innovation to establish transparent and efficient energy marketplaces, thereby delivering affordable, reliable energy to consumers.
Trading Platforms of IEX
There are three primary markets facilitated by the IEX:
1. Physical Delivery of Electricity: This includes the Day-Ahead Market (DAM) for electricity trades to be delivered in 15-minute intervals over the next 24 hours, starting from midnight. Another section is the Term-Ahead Market (TAM), which covers contracts for buying/selling electricity up to 11 days. This platform allows participants to purchase same-day electricity through intra-day contracts, next day through day-ahead contingency, and on a daily basis for rolling seven days through daily contracts.
2. Renewable Energy Certificates (RECs): Under the REC mechanism, a generator can produce electricity through renewable resources anywhere in the country. The generator receives a cost equivalent to that from any conventional source for the electricity part, while the environmental attribute is sold at a market-determined price through the exchanges. Obligated entities across the country can buy these RECs to comply with their respective State’s Renewable Purchase Obligation (RPO).
3. Energy Saving Certificates (ESCerts): These are tradable certificates under the Perform, Achieve, Trade (PAT) Scheme of the Bureau of Energy Efficiency (BEE), aimed to incentivize energy efficiency in large energy-intensive industries.
Central Electricity Regulatory Commission Role
The CERC, a statutory body with quasi-judicial status under the Electricity Act 2003, oversees the IEX. The commission’s primary objective is to facilitate competition, efficiency, and economy in the bulk power markets, improve the quality of supply, promote investments, and advise the government on eliminating institutional barriers to bridge the demand-supply gap in the power sector.
