Green Signal for Green Energy Trading – ICX Will Launch Four New Contracts

Indian Energy Exchange (IEX) has got approval to start green energy trading in its energy platform. For the first time in India, green energy will trade in the exchange, creating a more transparent and integrated market for the players. IEX received consent from the Central Electricity Regulatory Commission (CERC) to set-up a ‘green term-ahead market’ (G-TAM) to trade green energy derivatives through a specially created platform. The exchange conducted a mock run on Tuesday and going ahead, plans to commence trading from August 21.

Initially, the exchange will offer four types of green-term-ahead-contracts, namely, green intra-day contracts, day-ahead contingency contracts, daily contracts, and weekly contracts. In a statement, the company said that there would be separate contracts for solar and non-solar energy in first-ever physical trading of renewable energy.

As India is moving towards a sustainable energy economy, the newly introduced G-TAM will offer more choices to consumers.  Indian green energy sector has tremendous potential to grow and is the fourth most attractive renewable energy market in the world. As in April 2020, the total installed capacity in the country stood at 87.26 GW.

Big changes in the Indian renewable sector is underway, and policymakers are moving towards creating a competitive market that will help the country accomplish its sustainable energy aspirations. The platform will add more visibility to green energy trading, allowing players to take advantages of competitive price discovery.

This year there was a notable rise in demand for renewable energy certificates. Also, the government awarded the first contract for round-the-clock (RTC) supply of renewable energy of 400 megawatts, which will make renewable energy available throughout.

The new platform will allow power distribution companies to resell renewable power that they obtain from producers to willing consumers. ICX hopes the platform will be fruitful for the distribution companies (discoms), promote new demand to instal more capacities, and clear uncertainties around signing long-term contracts on renewable energy.

Like G-TAM, ICX also has plans to launch G-DAM or green day-ahead market on their plate. The talk for the same is underway.

Conclusion

Renewable energy trading in IEX could be the launchpad for generating more demand for renewable energy in India, will encourage producers and distributors to explore the market through the platform. Simultaneously, it will also help buyers to fall in line with the renewable purchase obligation (RPO).

IEX had launched a real-time electricity market recently, which allows buyers to purchase electricity just an hour in advance.  The firm hopes that G-TAM, along with RTM, will create an integrated platform for renewable energy that will offer more choices to buyers.