What is Indian Energy Exchange (IEX)? About Indian Energy Exchange (IEX)

Why in News ? The electricity Trade volume on IEX has jumped to 29 % in May 2024.

IEX is India’s premier energy marketplace. It functions as an electronic platform for buying and selling electricity, renewable energy certificates, and energy-saving certificates. Launched in 2008, it has revolutionized power trading in India by:

• Facilitating Efficient Price Discovery: Buyers and sellers submit bids, and the exchange determines the market clearing price based on supply and demand. This transparent system ensures competitive prices for electricity.
• Enabling Diverse Participation: IEX boasts a robust ecosystem with over 7,600 participants. These include:
  • Distribution utilities
  • Power generation companies (conventional and renewable)
  • Open access consumers (industrial and commercial)
• Providing a Range of Products: IEX offers various products to cater to different needs:
  • Day-Ahead Market: For buying and selling electricity for the next day.
  • Term Ahead Market: For buying and selling electricity for future delivery periods.
  • Renewable Energy Certificates (RECs): Tradable instruments representing the green attributes of renewable energy.
  • Energy Saving Certificates (ESCerts): Tradable instruments representing energy savings achieved.

Benefits of IEX:

• Increased Market Efficiency: IEX has led to a more efficient power market by promoting competition and transparency.
• Improved Access to Power: It has enabled better access to electricity for various entities, especially those in deficit areas.
• Growth of Renewable Energy: The REC market on IEX incentivizes the development of renewable energy sources.
• Reduced Emissions: Increased use of renewable energy through IEX contributes to India’s emission reduction goals.

Recent Developments:

• Cross-Border Electricity Trade: IEX recently launched cross-border electricity trade, allowing India to buy and sell electricity with neighboring countries. This is a significant step towards regional energy cooperation.
• Green Initiatives: IEX is actively promoting green initiatives, such as a separate platform for green day-ahead market trading.

IEX plays a crucial role in India’s energy sector. By facilitating efficient power trading and promoting renewable energy, it contributes to India’s energy security and sustainability goals.