Trading the solar and wind power through exchanges
About 90% of the electricity in India is traded through bilateral PPAs between the electricity generators and the Discoms. The exchanges typically trade power on a spot rate and day-ahead market basis. However recently CERC has allowed the trading contracts for a max duration of three months in exchange. In India, electricity is traded through IEX and PXIL as spot trading platforms for conventional power, RE power, and the REC (Renewable Energy Certificates). The falling cost of long-term PPAs in solar and wind has influenced the RE generators to explore the sale of RE power through power exchanges.
As p[er the recent trading rep[ort of June 2022, at IEX,, 8267 MU electricity was traded through IEX of which about 567 MU were traded as a green power spot trade market in the exchange. About 6.7 Lac RECs were also traded in June 2022. The trading of electricity through exchanges is expected to rise once we have the option of energy storage and hydrogen power through solar and wind. The peak power pricing at the exchange is about Rs. 12/kWh, and if some of the REC-based power generators are not getting their PPAs renewed through Discoms are likely to shift to spate, or day ahead, or term ahead market to gain the advantage of spot pricing. As open access is being allowed by the MoP, the buyers are likely to shift their bulk of electricity demand through exchanges, rather than the power purchases typically through the Discom long-term contracts.
As it can be observed from the IEX green power trading snapshot, of June 2022, the typically sell bids are ranging from Rs. 3.5/kWh -Rs. 5/kWh during the day. time, however, the peak power sell bids are hitting to about Rs. 12/kWh. If the energy storage market is established, the exchanges can be a good platform for trading the RE+ESS power through exchanges and get the market price in the range of about Rs. 7-10/kWh. It is beneficial to both the green power generators as well as to the large HT power consumers to move towards green power trading. Many corporates are aspiring toward their net-zero carbon emission goals, and the availability of green power through the exchanges provides an opportunity of affordable power to meet their net zero-emission targets and become carbon neutral. Companies such as Adani power and Renewpower are very active on exchange in sale of green power from their solar and wind facilities.
The market share of green electricity trading on exchanges is expected to increase dramatically in the coming years. The exchanges provide confidence to the electricity buyers that the green electricity they are looking to buy is originated from authentic solar and wind power projects.