Real-time market volume rises 52% month-on-month in July on Indian Energy Exchange

The real-time market (RTM) on the Indian Energy Exchange has seen a 52% month-on-month (MoM) growth in trading volumes in July at 785 million units (MU), against 515.5 MU in the first month of June. The exchange believes around 50-60% of customers in the intraday market will switch to RTM in the medium term, as it will meet their additional requirements of power during the day at a very competitive market determined price.

Rohit Bajaj, business development head at IEX said, in real-time market, trading can be done one hour in advance, while the intraday market is three hours in advance. “The RTM also gives buyers the advantage to book additional requirement of power during 48 half-hourly sessions in a day. The unrequisitioned surplus power tied under the long-term contract is also available to be sold on the RTM, apart from other surplus power. Each of the 48 sessions determines its own market price on the RTM. We believe due to this reason people will shift to RTM from intraday market,” Bajaj said.

“The shift has already started and we expect at least 50-60% of intraday customers will ultimately shift to the RTM platform,” Bajaj said.

Rupesh Sankhe, senior power analyst and vice-president at Elara Capital, said with 241 customers participating in July, RTM saw sell bid volume of around two times of buy bids in July, which indicates adequate liquidity in the real-time market as well. “While the sell bids saw a 17% M-o-M rise, buy bids witnessed a 36% M-o-M hike, demonstrating growth and increasing preference of market participants for RTM,” Sankhe said.

The exchange also believes that around 25% of 22 billion units which were to be settled under the deviation settlement mechanism due to overdrawal by discoms will be converted under RTM.

“To maintain the grid pressure, we are penalising discoms for overdrawal, and at the same time, we want them to supply 24×7 to their consumers. But the problem in the system is high renewable percentage which has very high variability. Forecasting errors are also very high under renewable, leading to a sudden shift in generation. To protect the high variability in generation, buyers can go to RTM and purchase instead of overdrawal from the grid. So, going ahead, we expect at least 25% of the 22 billion units which was getting overdrawn from the grid to be converted to RTM in the next one year,” he said.

IEX has participation from various industries such as cement, ceramic, food processing, textiles, glass and chemicals. The exchange has, however, seen enthusiastic participation from steel and metal industries in the real-time market, said Bajaj. “We expect to keep the momentum going which will help increase traded volumes and enable the utilities and industrial consumers incur savings, ensuring flexibility and cost-effectiveness in power procurement.”