India Energy Exchange (IEX) has announced that it will launch renewable energy trading on Friday, August 21. The country’s leading power bourses, Indian Energy Exchange and Power Exchange of India had received the go-ahead from the power regulator Central Electricity Regulatory Commission (CERC) on August 17 to commence green term-ahead market (G-TAM) in the country.
“This is a significant milestone which will go a long way in facilitating consumers make a choice, accomplishment of national green capacity targets, and enabling integration of renewable energy in the most flexible and efficient way,” IEX said.
The world is moving towards renewable energy as it is available in abundance and is a clean source of energy. Back home, the Modi government has set an ambitious target of achieving 175 gigawatt of renewable energy capacity by 2022 and IEX’s G-TAM platform will contribute to the endeavor by encouraging new capacity addition.
The green term-ahead-market (G-TAM) will offer four types of contracts, viz. intra-day, day ahead contingency, daily and weekly. Price discovery would take place through a process of continuous trading that accords priority to the highest ‘buy’ order and lowest ‘sell’ order. There will be separate contracts for solar and non-solar energy.
IEX’s renewable energy trading will make renewable energy available to consumers at affordable rates. G-TAM will help discoms to fulfill their renewable purchase obligations (RPO) and resell renewable power procured from developers, and buyers to procure energy as and when required. States with surplus renewable resources can hereafter sell in the open market. This will also come as a relief to renewable energy companies plagued with issues regarding long term power purchase agreements (PPAs) and cost recovery.
Moreover, the introduction of green markets on the energy exchange platform is in accordance with India’s international obligations. As a signatory to the Paris Climate Agreement 2016, India made a commitment to install 450 GW of renewable capacity by the year 2030 and the trading platform will aid capacity building.
Recently, the IEX launched the real-time electricity market (RTM). The RTM trading provides flexibility to thermal power producers to sell excess power in the spot market in the event of low electricity demand from discoms. In fact, the power utility companies can buy and sell power just an hour ahead of requirements.