India’s largest power trading platform Indian Energy Exchange is planning to set up a dedicated trading platform for renewable energy.
In a recent interview, officials of Indian Energy Exchange (IEX) stated that they are planning to introduced a dedicated power exchange for renewable energy projects. The officials stated that since the government plans to have 175 GW renewable energy installed by March 2022, project developers will likely look to have multiple options to sell their electricity.
The idea of a dedicated renewable energy trading platform will work only if private sector project developers look to set up projects outside the tenders floated by the state and central governments. Developers winning such tenders have to sign long-term power purchase agreements leaving them with no alternate options to sell electricity. This sometimes becomes a financial hurdles for the developers as not all off-takers are of sound financial condition to make regular payments to the developers.
The success of a renewable energy trading platform will be a challenge as distribution companies in India are not buying renewable energy certificates which help them meet their renewable purchase obligation. Several million of such certificates currently remain unsold with distribution companies not heeding to the pleas of the Ministry of New & Renewable Energy to rapidly increase the purchase of these certificates.
Indian Energy Exchange is looking to promote this dedicated platform as an alternate avenue for project developers to sell electricity and keep their project financial viable in case long-term agreements do not provide the desired revenue.