NEW DELHI: With India’s energy consumption steadily rising – it reached 130.40 billion units (BUs) in December 2024, a 6 per cent increase year-on-year – electricity trading on exchanges is emerging as a critical tool for balancing the country’s demand and supply needs.
In December, the total electricity traded volume on exchanges reached a record 11,132 million units (MU), marking a 29 per cent year-on-year growth, underscoring the growing relevance of these platforms in ensuring cost and energy efficiency.
Optimising costs
The Day-Ahead Market (DAM), a segment where buyers and sellers transact for next-day delivery, witnessed a 39 per cent rise in volumes to 6,674 MU in December 2024 compared with the same month last year.
This growth was accompanied by a 14 per cent drop in average market clearing prices, which stood at Rs3.89 per unit, presenting an opportunity for Discoms and Open Access consumers to replace costlier power procurement with competitively priced electricity traded on exchanges.
Real-Time Electricity Markets (RTM), designed to address last-minute fluctuations in demand, also reported a 32 per cent increase in December volumes, reaching 3,180 MU.
The availability of ample liquidity in these segments is enabling buyers to meet their energy requirements efficiently and affordably.
Green energy takes center stage
Exchanges have also become key enablers in India’s renewable energy transition. The Green Market, which includes Green Day-Ahead (G-DAM) and Green Term-Ahead (G-TAM) segments, recorded a sharp 236 per cent year-on-year growth in traded volumes, reaching 781 MU in December 2024.
This reflects the increasing adoption of clean energy sources in response to both environmental goals and regulatory compliance.
Renewable Energy Certificates (RECs), another critical instrument traded on exchanges, also saw a surge in demand. Over 16.62 lakh RECs were traded in December 2024, representing a 58 per cent year-on-year jump, further supporting India’s green energy commitments.
Future outlook
The rising reliance on electricity trading platforms highlights their growing importance in optimising the procurement process amid increasing energy demand.
By providing flexibility, competitive pricing, and ample liquidity, these exchanges are helping stakeholders adapt to the evolving dynamics of India’s power sector.
As the country’s energy consumption continues its upward trajectory, the role of electricity trading platforms in ensuring price stability and supporting renewable energy adoption will only grow in relevance.
These platforms are well-positioned to act as catalysts in India’s journey toward a more sustainable and cost-efficient power ecosystem.
