IEX sees good demand from cross-border customers

By: |
June 09, 2021 3:00 AM

The Indian Energy Exchange traded 6540 MU of electricity volume in May 2021, up 9% y-o-y amidst Covid-19 lockdown as well the cyclonic disturbances that affected the overall power demand in the country.

The Indian Energy Exchange traded 6540 MU of electricity volume in May 2021 up 9% y-o-y amidst Covid-19 lockdown as well the cyclonic disturbances that affected the overall power demand in the country.

The cross-border power trade that started on Indian Energy Exchange (IEX) in April has since seen a volume of 139 million units with firms in Nepal, Rohit Bajaj, head, business development, IEX told FE. He also sees a “huge potential” for other South Asian countries with greater demand such as Bangladesh and Sri Lanka as they could potentially save up to Rs 1.50 per unit in power procurement by trading on IEX.

“Talks are on to bring onboard companies from Bangladesh and Bhutan on an immediate basis while there are plans to engage with countries such as Sri Lanka and Myanmar which have the requisite demand and where connectivity can be established,” Bajaj said.

“Indian companies save around Rs 1 per unit on IEX on an average. For any company from regional markets such as Bangladesh, the savings would be more than Rs 1.50 per unit since the average procurement cost for most of the PSUs there is close to 7 Taka (1Taka = Rs 0.86) while the highest ever price in April this year on IEX was Rs 4 per unit. There exists huge potential for trade between the countries,” Bajaj further said.

The traders are engaging with the buyers to clear the formalities and get the regulatory approval from the Central Electricity Authority (CEA) for Bangladesh and Bhutan. The approval is expected shortly, he said.

There are immediate neighbouring countries where the dependence is still on gas and diesel-based generation which leads to higher procurement cost for the national electricity authorities. Much of this dependence on costly fuel can be reduced through exchange trading. The buyers with surplus power can also sell on the exchange.

The Indian Energy Exchange traded 6540 MU of electricity volume in May 2021, up 9% y-o-y amidst Covid-19 lockdown as well the cyclonic disturbances that affected the overall power demand in the country.

The contribution from the day-ahead market that includes cross border trade was 4,364 MU, the real-time market contribution was 1436 MU, and the term-ahead market which comprises intra-day, contingency, daily and weekly contracts, traded 383 MU. The Green term-ahead market traded the highest ever volume of 357 MU in May that includes 194 MU from the solar segment and 164 MU from the non-solar segment, a growth of 92% month-on-month.

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