Price of GTAM-traded power surged by 2.5–2.7 times in April 22

The average price for both March 2022 and April 2022 has increased by around 40 percent month-over-month (M-o-M).

In India, the exchange-based renewable energy (RE) market (or green power market) is expanding at a rapid pace. This market is divided into two submarkets: the green day-ahead market (GDAM) and the green term-ahead market (GTAM) (GTAM). The green power market (GDAM+GTAM) was established on August 21, 2020, with the introduction of GTAM. The green power market traded 7,660 million units (MU) of renewable electricity as of April 2022. GTAM-traded power averaged 4.4/kWh and Rs. 4.9/kWh on the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL), respectively.

 However, the average price of GTAM-traded power across IEX and PXIL in April 2022 crossed the ₹ 10/ kWh mark, increasing 2.5-2.7 times year on year (Y-o-Y). 

The average trading price in recent months has increased significantly, even in comparison to GDAM. The average price for both March 2022 and April 2022 has increased by around 40 percent month over-month (M-o-M). 

(Note: Data represents market trend of GDAM of IEX. No green power was transacted in Integrated Day-ahead Spot (IDAS) of PXIL during the reporting period.)

 A demand-supply imbalance in the broader Indian energy market is what led to the current price increase (as shown in figures 1 and 2) in recent months. The price of electricity has increased dramatically across several sectors, including the market for green power, due to a power supply crisis and rising power demand.

 The Central Electricity Regulatory Commission (CERC) ordered the power exchanges to set a bid price cap of Rs. 12/kWh for the day-ahead market (DAM) and real-time market in its order from April 1, 2022, with the intention of striking a balance between investor and consumer interests (RTM). This instruction was then extended to GDAM, Intra-day, Day Ahead, Contingency, and Term-Ahead (including GTAM) contracts on May 6, 2022. This temporary ruling is valid until June 30, 2022.

 The present supply-side crisis has inadvertently increased the importance of renewables in the electricity market. Going forward, a reliable and sufficient supply of renewable energy is essential. To make this possible, RE merchant capacity must be significantly increased. This necessitates stricter enforcement of RPO compliance for distribution companies, open access, and captive power consumers.