How India’s Electricity Exchange is Charging up the Future

Record trading volumes at the Indian Energy Exchange signal a shift toward cleaner, more efficient and market-driven energy.

In a country where power shortages once dominated headlines and diesel generators hummed in affluent homes, a silent transformation is underway. The Indian Energy Exchange (IEX) - the country’s premier electricity trading platform - has quietly become a barometer of India’s energy ambitions and a force accelerating its transition to a greener, more market-oriented power sector.

In the fiscal year ending March 2025, IEX reported a record 121 billion kilowatt-hours (kWh) traded, marking an 18.7 percent rise over the previous year. While such figures may seem arcane, they reflect a deeper trend: India’s power sector is growing up. Long dominated by opaque bilateral contracts and overburdened state utilities, electricity is increasingly flowing through transparent, price-discovery platforms like IEX. For a nation whose power demand is surging due to economic growth, rapid urbanisation, and intensifying heatwaves, this is welcome news.

The numbers are as electric as the product itself. IEX’s consolidated net profit jumped 22.3 percent to Rs. 429.2 crore, while revenues climbed 19.3 percent to Rs. 657.4 crore. The last quarter alone saw 31.7 billion kWh traded - an 18.1 percent year-on-year rise with quarterly profits up by 21.1 percent. More than just a financial windfall, it is an operational triumph for a market-driven model in a country still wrestling with the legacy of power sector inefficiencies.

At the heart of this boom lies demand. India’s electricity consumption has been growing steadily, driven not only by middle-class air conditioning and industrial growth but also by increased rural electrification and digitalisation. Yet traditional long-term power purchase agreements (PPAs) have often proved inflexible or politically fraught. Power exchanges like IEX offer a nimbler solution, enabling buyers and sellers to match demand and supply on a real-time or short-term basis.

Consumers benefit, too. A robust spot market improves price signals and encourages surplus generators to sell power during high-demand periods. In theory, and increasingly in practice, this reduces blackouts and price spikes. For state electricity boards, often plagued by poor finances and load management issues, exchanges provide a tool for course correction. For industrial consumers, they offer cost savings and flexibility.

But perhaps the most significant shift is ecological. The green energy revolution, often discussed in solar farm ribbon-cuttings and ministerial speeches, is finding an unlikely ally in IEX’s trading terminals. The exchange recorded a 136.3 percent surge in Renewable Energy Certificate (REC) trading in FY25, hitting an all-time high of 178 lakh certificates. These RECs, bought by companies to meet regulatory clean-energy obligations, are vital in a country where coal still accounts for over 70 percent of power generation.

Going a step further, IEX’s wholly owned subsidiary, Indian Carbon Exchange (ICX), has become the first accredited issuer of International Renewable Energy Certificates (I-RECs) in India. Though still modest in revenue, the move places India firmly on the global clean energy trading map. For multinationals operating in India, I-RECs are a crucial mechanism for meeting global ESG (environmental, social and governance) commitments. For India, it is a validation of its growing clout in the decarbonisation value chain.

The stock market has taken note. IEX’s earnings per share rose to Rs. 4.83 from Rs. 3.95 last year, and the board has declared a final dividend of Rs. 1.50 per share - a signal of confidence in future earnings. Analysts forecast steady growth in revenue (around 4.8 percent annually) over the next two years, driven by sustained demand and the increasing sophistication of India’s electricity market.

But challenges remain. Power exchanges still account for a fraction of total electricity traded in India, a meagre 7 percent compared to more than 30 percent in mature markets like the U.S. or U.K. Regulatory clarity, especially around market coupling and the introduction of new trading products, will be key. Grid stability, a perennial issue given India’s variable renewable generation and ageing infrastructure, also needs urgent attention.

Globally, India’s experiment with electricity market liberalisation is being watched closely. As countries seek models for integrating renewables while maintaining grid reliability, the IEX story offers useful lessons. It shows how digital platforms, policy nudges, and market incentives can collectively steer a fossil-fuel heavy economy towards cleaner horizons—without waiting for perfect infrastructure or complete reforms.

For Indian consumers, the changes may still feel abstract. There is no “IEX” button on the wall that powers their ceiling fans or refrigerators. But behind the scenes, every traded kilowatt-hour and every renewable certificate is shaping the future. The exchange’s success is not merely a corporate milestone but a symbol of India’s changing relationship with energy: more open, more efficient, and crucially, greener.

As India marches towards its ambitious target of 500 gigawatts of renewable capacity by 2030, platforms like IEX will be indispensable. In a future where electrons must travel smarter and greener, IEX is proving that the power of markets can indeed power the market of power.

(The author is a digital product leader passionate about energy innovation, manufacturing and driving impact through technology. Views personal.)