IEX Reports 8% YoY Dip in Profit for Q2 FY23, Trades 23.1 BU of Power

The exchange registered a 7% YoY decrease in revenue for the Q2 FY23


The Indian Energy Exchange (IEX) has reported an 8% year-on-year (YoY) decrease in profit after tax from ₹774 million (~$9.34 million) to ₹712 million (~$8.6 million) in the second quarter (Q2) of the financial year (FY) 2022-23.

The revenue for Q2 stood at ₹1.14 billion (~$13.76 million), a 7% decrease from ₹1.22 billion (~$14.73 million) during the same period last year.

The earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter was ₹976 million (~$11.78 million), an 8.8% decrease from ₹1.07 billion (~$12.92 million) in Q2 FY22.

During the quarter, electricity volumes on the exchange grew 10% YoY, with 23.1 billion units (BU) traded against 23.4 BU in Q2 FY22. The volume comprised 19.7 BU in the conventional power market, 1.5 BU in the Green Market segment, and 1.91 million Renewable Energy Certificates (REC), equivalent to 1.9 BU.

However, during the first half of FY23, the volumes declined marginally by 2% YoY. The volumes were impacted due to supply-side constraints, led by high prices of e-auction coal, imported coal, and gas.

The average Day Ahead Market prices increased to ₹5.40 (~$0.065)/kWh during the quarter against ₹4.14 (~$0.050) in the same period last year. The average Day Ahead Market price was ₹7.76 (~$0.094)/kWh.

IEX expects the easing of supply-side constraints and lower demand in the impending winter season to increase liquidity and lower prices. This is expected to provide an opportunity for distribution companies to optimize their power procurement and for commercial and industrial consumers to buy cheaper power.

During the quarter, IEX added new products to the existing longer-duration contracts portfolio, such as daily contracts for up to 90 days, weekly contracts for up to 12 weeks, and monthly contracts for up to 3 months.

The exchange traded 454 MU of renewable energy in September 2022, registering a 4% month-over-month growth. The average monthly price for solar was ₹5.05 (~$0.062)/kWh, ₹6.15 (~$0.075)/kWh for non-solar, and ₹5.56 (~$0.067)/kWh for hydro.

In May this year, the Central Electricity Regulatory Commission (CERC) issued ‘Terms and Conditions for RECs for Renewable Energy Generation Regulations, 2022.’ According to the new regulations, renewable energy generating stations, captive generating stations based on renewable energy sources, distribution licensees, and open access consumers are now eligible to issue RECs.