Indian Energy Exchange, the country's first energy trading platform, recorded a 62% increase in trading volume in 2012-13, as frequent electricity outages forced power distributors and industrial units to rely more on it for their needs.
More than 22 billion units of electricity were traded on the Indian Energy Exchange (IEX) in 2012-13 compared with 13 billion units a year ago, data provided by IEX shows.
Power generators, distributors and industrial units are the exchange's main members. This increase in trade volume was mainly because of the uncertainty over power supply from generators, limitations of transmission networks, and state assembly polls that usually lead to higher electricity supplies to electorates.
Volumes growth was also driven by new memberships, which increased 74% over the previous fiscal to 2,322. "IEX brought respite to over 2,300 participants, including 1,700 industries, by meeting their electricity needs reliably and competitively," said Shruti Bhatia, IEX vice-president for policy and media communications.
The average power price for 2012-13, however, remained at Rs 3.49 per unit, compared with Rs 3.53 in the previous fiscal, due to higher market participation of power producers.
However, IEX's volumes in 'termahead market', which enables trading in power supplies for up to two weeks in advance, fell 22% from 2011-12 to 481 million units on account of limited access to transmission networks.
In the last five years, trade in Indian power exchanges has increased at a CAGR of 56%. Trades at IEX, set up in 2008-09, and the Power Exchange India, the other power-trading platform in the country, account for 3% of the total electricity generated in the country.
IEX VP for policy Shruti Bhatia said, "The availability of power at competitive prices at the exchange has led to revival of sick industrial units, particularly in Punjab and Tamil Nadu where units were either shutting down or running for 2-3 days a week."
According to Bhatia, power exchanges in India can grow faster if relevant changes are introduced in the system to achieve the goals of National Electricity Policy, 2005, which calls for up to 15% of new generation to be sold outside long-term power purchase pacts.
IEX director Rajesh Kumar Mediratta said, "There are states like West Bengal, Maharashtra, Uttar Pradesh and Delhi where even partial open access has not commenced. Another issue hindering the growth of the power market is inadequate availability of the transmission networks."
Source- Economic Times