Indian Energy Exchange | 08 Apr 2021

Why in News

The electricity market at Indian Energy Exchange (IEX) achieved an all-time high volume of 8,248.52 MU (million units) in the month of March 2021 surpassing all the previous milestones.

Key Points

  • About:
    • It is the first and largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates and Energy Saving Certificates.
    • The exchange platform enables efficient price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed and efficiency of trade execution.
    • It is a publicly listed company with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
    • It is approved and regulated by Central Electricity Regulatory Commission (CERC) and has been operating since 2008.
  • Mission:
    • To leverage technology and innovation to establish transparent and efficient energy marketplaces for delivering affordable, reliable energy to consumers.
  • Trading Platform for:
    • Physical Delivery of Electricity:
      • Day-Ahead Market (DAM):
        • It is a physical electricity trading market for deliveries for any/some/all 15 minute time blocks in 24 hours of the next day starting from midnight.
      • Term-Ahead Market (TAM):
        • The contracts under TAM cover a range for buying/selling electricity for duration up to 11 days.
        • It enables participants to purchase electricity for the same day through intra-day contracts, for the next day through day-ahead contingency, on a daily basis for rolling seven days through daily contracts.
    • Renewable Energy Certificates (REC):
      • Under the REC mechanism, a generator can generate electricity through the renewable resources in any part of the country.
        • For the electricity part, the generator receives the cost equivalent to that from any conventional source while the environment attribute is sold through the exchanges at the market determined price.
      • The obligated entity from any part of the country can purchase these RECs to meet its RPO (Renewable Purchase Obligation) compliance.
        • Obligated entities may either purchase renewable energy or can purchase RECs to meet their RPO set under RPO of their respective States.
    • Energy Saving Certificates (ESCerts):

Central Electricity Regulatory Commission

  • CERC is a regulator of the power sector in India.
  • It intends to promote competition, efficiency and economy in bulk power markets, improve the quality of supply, promote investments and advise the government on the removal of institutional barriers to bridge the demand supply gap.
  • It is a statutory body functioning with quasi-judicial status under the Electricity Act 2003.