India’s leading energy market, Indian Energy Exchange (IEX), offers a national automated trading platform for the actual delivery of power and renewable energy. Modern, user-friendly technology powers IEX, making power acquisition simple and accelerating the change in the energy industry.
History
The oldest and the biggest electricity exchange in India is the Indian Energy Exchange Limited (IEX). With a diversified participant base of more than 6300 registered users, it commands a commanding market share of over 98% of the traded volume in electricity. India Energy Exchange offers participants the chance to trade in electricity contracts as well as an automated trading platform for the physical supply of power, enabling effective price discovery and Renewable Energy Certificates (RECs) and ESCerts (Energy Saving Certificates).
The exchange platform improves trade execution speed and efficiency while increasing accessibility and transparency of the Indian power market. Since its launch on June 27, 2008, India Energy Exchange has been subject to approval and regulation by the Central Electricity Regulatory Commission (CERC). The Exchange is a corporation that is expertly managed. It is one of the two exchanges in India that provides an electronic platform for the trading of electricity products. The Indian Energy Exchange holds a sizable market share among the country’s power exchanges. The vast majority of the energy contracts that are traded on the Exchange are DAMs.
All registered players in India have access to India Energy Exchange, through an online platform. The Exchange improves the speed and effectiveness of trade execution as well as the accessibility and transparency of the Indian power market. The exchange provides settlement services, such as electronic trade confirmation access to clearing services and risk management capabilities, in addition to transaction execution. On March 26, 2007, it was established in Maharashtra. On April 17, 2007, the Company received a certificate of establishment. Day-ahead market trading on its exchange started in 2009 (DAM). The business added its first industrial customer to its exchange in 2010. 2011 saw the start of trade in renewable energy certificates on its exchange (RECs). Three ISO certifications—ISO 9001:2008 for quality management, ISO 27001:2013 for information security management, and ISO 14001:2004 for environmental management—were awarded to the Exchange in August 2016. On the exchange, trading of energy-saving certificates (ESCerts) began on September 26, 2017. The company launched an initial public offering (IPO) between October 9 and October 11, 2017. The IPO included a 60.65 lakh share offer for sale from selling stockholders. The corporation did not issue any further shares. On October 23, 2017, the stock began trading on the BSE for Rs 1500, a 9.09% decrease from the IPO price of Rs 1650 per share.
In order to jointly explore the prospects for collaboration in the energy market, the Indian Energy Exchange (IEX) and Japan Electric Power Exchange (JEPX) signed a Memorandum of Understanding (MoU) on March 28, 2018. The goal of the Memorandum of Understanding is to exchange knowledge and work together to develop new products for the energy industry. The scope of the Memorandum of Understanding includes chances for training to support electricity trading through platforms with a competitive market by setting up knowledge-sharing programmes.
Financial and Business Performance
For IEX, the fiscal year 2022 is particularly significant because we achieved a record-breaking volume of 102 BU while experiencing a 37% YoY increase across all market sectors. While the Certificate segment—which consists of REC and ESCerts—contributed 6.4 BU, the electrical market—which includes the DAM, RTM, TAM, GDAM, and GTAM segments—contributed 95.6 BU volume and grew by 29% YoY. Along with the growing demand for electricity from States, new products were the main factor in the volume growth. The Exchange Market has shown 20% CAGR growth over the previous five years, making it the fastest-growing market sector for short-term electricity. According to information from CERC Market Monitoring Reports, it made up 7.4% of India’s overall electricity consumption in the fiscal year 2022. Its position in the short-term market in India is anticipated to be further strengthened by the recent introduction of longer duration contracts. The launch of Cross-Border Electricity Trade (CBET) has assisted IEX in extending India’s power markets to South Asia, laying the groundwork for an integrated regional power market in the region. Nepal and Bhutan have already actively participated in the CBET section, and Bangladesh is soon likely to follow suit.
The exceptional corporate accomplishments produced remarkable financial results. Last year, its consolidated revenues increased by 36% YoY, from Rs. 356.2 crore in fiscal year 2021 to Rs. 484.4 crore in fiscal year 2022, while profit after tax jumped by more than 50% YoY, from Rs. 205.4 crore to Rs. 308.6 crore. The Board of Directors of the Company announced a total dividend payout for the fiscal year 2022 of Rs 2 per share, or 200% of the face value of equity shares.
Management Team Consists of
| Management | ||
| Name | Designation | |
| Amit Garg | Non Executive Director | |
| Amit Kumar | Head | |
| Gautam Dalmia | Non Executive Director | |
| Kayyalathu Thomas Chacko | Independent Director | |
| Rohit Bajaj | Head – Business Development | |
| Samir Prakash | Head – Human Resource | |
| Sangh Gautam | Chief Technology Officer | |
| Satyanarayan Goel | Chairman & Managing Director | |
| Sudha Pillai | Independent Director | |
| Tejpreet Singh Chopra | Independent Director | |
| Vineet Harlalka | CFO & Company Secretary | |
Shareholding Pattern
| Name | Jun 2021 |
| Promoters Holding | 0% |
| Fiis Holding | 36.81% |
| Diis Holding | 15.13% |
| Public Holding | 48.06% |
Market Segment
- Day Ahead Market
A physical market for trading electricity where deliveries are made for any/some/all 15-minute time blocks during the 24 hours of the following day, beginning at midnight. A double-sided closed auction bidding method is used to establish the pricing and quantity of power to be traded.
- Real Time Market
A market segment where there is a fresh auction session every half-hour and power is provided four time blocks later or an hour after the auction’s gate closes. Through a double-sided closed auction bidding process, the price and quantity of electricity trade are decided.
- Term Ahead Market
Includes a variety of items that let users buy or sell electricity on a contractual basis up to 11 days in advance. Intra-day, Day-Ahead Contingency, Daily, and Weekly contracts are among the products offered in the Term Ahead-Market to assist players in managing their portfolio of power for various time frames.
- Cross Border Market
On April 17, 2021, India Energy Exchange launched the first cross-border electricity trade when it began trading with Nepal in its day-ahead electricity market. The South Asian Power Market will be built by expanding the Indian power market through the Cross Border in Electricity initiative. For starters, the grid-connected South Asian nations of Bangladesh, Nepal, and Bhutan will have access to the Exchange’s Day-ahead Market and Term-ahead Market. The market will thereafter grow as the grid connectivity spreads to other south countries.
- Green Market
The market is allowing anonymous and double-sided closed collective auction in renewable energy on a day-ahead basis. The market was commenced on 26 Oct’21. The Exchange invites bids for conventional and renewable in an integrated way through separate bidding windows. The clearing takes place in a sequential manner – first in the renewable segment having the must-run status, considering the availability of the transmission corridor, followed by the conventional segment; discovering separate price formation for green and conventional power.
- Green Time Ahead Market
The market segment for trading in delivery-based renewable energy. The market was commenced on 21 August 2020 following the CERC approval. The market segment features contracts such as Intra-day, Day-ahead Contingency, Daily and Weekly, separate for solar and non-solar segments. The matching mechanism is continuous trading for Intra-day, Day-Ahead Contingency and Daily contracts, whereas double-sided open auction process will be implemented for Weekly.
Renewable Energy Certificates
The environmentally friendly qualities of power produced from renewable resources. RECs can be divided into two categories: solar and non-solar. 1 MWh of energy is represented by one certificate. Because of their flexibility and the fact that they are not constrained by the geographical or physical constraints of the underlying commodity, electricity, REC is positioned as the primary market driver for renewable energy. To fulfil their Renewable Acquire Obligation, the Obligated Entities purchase RE.
Certificate For Energy Saving
The market-based tool created for consumers in energy-intensive industries and sectors to lower their particular energy usage for each compliance period, in line with predetermined targets. The Perform Achieve Trade Sch. is responsible for creating the certifications.
Launch Of Indian Gas Exchange
The Honourable Minister of Petroleum and Natural Gas at the time, Shri Dharmendra Pradhan, introduced the Indian Gas Exchange, a subsidiary of India Energy Exchange, on June 15, 2020. On December 2, 2020, IGX received permission from the Petroleum and Natural Gas Regulatory Board to function as India’s first Gas Exchange. The concept of The Exchange is consistent with the Government’s stated goal of increasing gas’s part in India’s energy mix from 6% to 15% by the year 2030. To support India’s strategic goal of creating a gas-based economy, IGX uses technology and innovation to run a national, open, and competitive marketplace for the trade of gas and petroleum products. The Exchange provides a completely automated web interface based on a seamless trading experience, powered by GMEX, one of the world’s top providers of digital Exchange trading and a UK-based technology company. IGX now operates from 5 gas hubs, including Dahej, Hazira, Dabhol, Jaigarh, and KG Basin. It has a strong ecosystem of 21 Members and more than 500 Clients, and it offers a wide range of products to trade in Day Ahead, Weekly, Weekday, Fortnightly, and Monthly contracts.
Since December 2020, IGX has produced a total gas volume of more than 50 lac MMBTU. The platform has been promoting domestic price discovery, which is boosting demand, boosting industrial competitiveness, encouraging investments in the value chain, assuring effective use of the pipeline infrastructure, and ensuring the rebirth of gas-fired power plants. In a ground-breaking move, IGX is anticipated to start trading domestic gas on its platform shortly after receiving regulatory authority. Along with improving the sell side liquidity, this will create new opportunities for domestic gas sales and price discovery through exchange markets.
Use Of Technology By India Energy Exchange
A higher emphasis on innovation and technology is necessary given the rapid energy transition being driven by renewable energy sources as well as the growing consumerization. A clean and efficient energy future can only be built with the help of the technology-driven energy market. By providing access to energy that is competitive, transparent, and reliable, India Energy Exchange hopes to design the next generation of energy solutions. India Energy Exchange uses technology to accomplish this ambition and gives market participants the best-in-class experience.
Recent examples of customer-centric initiatives:
- Improved customer service across all crucial touchpoints, including registration, bidding, physical delivery, and financial settlement.
- Web-based platform that offers digital registration, easy and secure access to the trading platform, data insights, and analytics from any location at any time.
- RTM-based automated budding via Application Programming Interface (API). The market participants can now automatically retrieve all the market data thanks to this.
- A tool for creating bids was made available to market players to aid in the optimisation of the purchase of power. This tool made it simple to create bulk bids and upload them quickly to the IEX trading platform.
- Faster financial transactions with our customers are made possible by system integration with the clearing banks. A smart power procurement tool to optimise costs and an inefficient power portfolio.
- Value-Added Services for Renewable Generators, which provide generation forecasting services and solutions from the top-tier service providers with which they have contracted.
Future of India Energy Exchange (IEX)
The 2021 fiscal year was a model year in the previous 13 years. The emergence of new market divisions and transformation accommodate the market’s fluctuating need for power-buying participants. When the entire financial system was shut down due to the pandemic over an extended period, IEX’s 24×7 operations were ensured by a strong utility distribution and a business continuity plan which served their consumers with uninterrupted electricity supply through the most economical method.
The platform’s price discovery process, which is competitive, has further given a chance for cost minimisation to reach the market participants, which results in a decrease in the cost of doing business. Several state distribution businesses are purchasing using the IEX’s platform’s strength to gain flexibility and transparency, as well as to streamline their energy procurement cost.
India Energy Exchange established new market categories throughout the year and received a positive reaction from our clients, such as the Real-Time Market (RTM), where India Energy Exchange provides a 48-half-hourly service for daily auctions that enable users to buy power at a one-hour warning. The June 1, 2020, launch of the market has been assisting Discoms to control their supply and demand variations and effective use of renewable energy, in addition to promoting safe and trustworthy practices.
Additionally, India Energy Exchange started trading green energy with the August launch of the Green Term Ahead Market (GTAM). As India transitions to large-scale renewable energy despite capacity increases, both markets will be crucial in achieving our country’s sustainability goals. Most recently, the eagerly anticipated Cross Border Electricity Trade, supporting IEX’s effort to establish a South Asian Regional Energy Market, also commenced.
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