Power demand drives 19% volume growth at Indian Energy Exchange

Revenue in April-Sept was up 21 per cent to Rs 1.49 billion, with the rise in volumes in both the electricity and REC segments

Trade volumes rose 19 per cent at the Indian Energy Exchange (IEX) in the first six months of this financial year. 

This was aided by a pan-India 6.2 per cent increase in electricity generation during the period. In all, 28,584 million units (MUs) of power were traded between April 1 and September 30, counting both the day-ahead and term-ahead markets.

The trade in renewable energy certificates (RECs) zoomed 325 per cent from a year before, from 1,205 MUs to 5121. Total volume trade on IEX went up 34 per cent, to 33,705 MUs in the period.

During the period, the market was congestion-free on most days. Volume curtailment due to congestion was only 0.6 per cent. 

Revenue in April-September was up 21 per cent to Rs 1.49 billion, with the rise in volumes in both the electricity and REC segments. At nearly Rs 1.25 billion, the earnings before interest, taxes, depreciation and amortisation (Ebitda) was up 23 per cent. The Ebitda margin was a robust 83 per cent.

However, operating expenses rose 14 per cent to Rs 246.6 million. Depreciation rose 19 per cent to Rs 52.2 million on account of capital expenditure in 2017-18, primarily on acquisition of trading software technology. Tax expense was Rs 348 million, an effective tax rate of 29 per cent.

Its highest volume trade wa 306 MU in the day-ahead market (DAM) on September 29. The average market clearing price rose 33 per cent, from Rs 3 to Rs 3.98 a unit. Largely due to inadequate availability of coal with generators, the exchange told investors.

In the term-ahead market, 892 MUs were traded, a spike of 86 per cent over the April-September period of 2017-18. As many as 22 solar energy projects, aggregating 1,066 Mw in capacity, were registered and solar energy sold through DAM on the exchange. 

As noted earlier, all this performance was bolstered by the marked rise in electricity demand. To meet this, generation (including of renewable energy) rose 6.2 per cent in April-September to 705 billion units (BUs) from the year-before period. Among the marked increases in demand (figures in percentage) were Karnataka (27), Telangana (19), Maharashtra (18), Andhra Pradesh (17), Odisha and Gujarat (both 16). 

Thermal generators faced inadequate availability of coal, leading to increase in e-auction rates. Imported coal prices also rose. All this led to the rise in market clearing price noted earlier, to Rs 3.98 a unit.