- India’s electricity traded on IEX rose 17% to 141 billion units in FY26
- Real-time market prices fell 16% despite 1.1% growth in national power demand
- Renewables added 55.29 GW, now 29% of generation and half of installed capacity
Even as India's electricity demand inched up in FY 2025-26, power prices on the exchange fell sharply. Data from the Indian Energy Exchange (IEX) shows record traded volumes of 141 billion units during the year, even as real-time market prices dropped 14-16 per cent year-on-year.
On the surface, the data looks counter-intuitive. But a broader look at supply conditions, renewables growth, market mechanics and trading behaviour explains the paradox.
Key Exchange Metrics: FY26 at a Glance
| Metric | FY26 (Actual) | YoY Change |
| Electricity traded on IEX | 141.0 billion units | +17% YoY |
| Day-Ahead Market Avg. Price | Rs 3.86/unit | -13.7% YoY |
| Real-Time Market Avg. Price | Rs 3.59/unit | -16.0% YoY |
| Renewable Energy Certificates | 187.20 lakh | +5% YoY |
| Power demand growth (national) | 1.1% | -- |
Volumes surged across segments, particularly in the Real-Time and Green markets. This was despite prices softening significantly. In Q4 FY26 alone, IEX posted a 24.3 per cent YoY jump in traded electricity volumes.
Why Prices Are Softening
Supply Growth Outpaces Demand Growth: Demand in FY26 was only up 1.1 per cent, a modest rise by historical standards. At the same time, India added a massive 55.29 GW of non-fossil capacity in FY26 -- led by solar and wind -- the largest annual jump on record. Renewables now contribute about 29 per cent of total generation and half of installed capacity.
"As Indian Energy Exchange reaches a record 141 billion units in FY26, the drop in power prices despite rising demand is not a paradox, it signals a structural shift in how India's power market is evolving. A key driver is the rapid addition of renewable energy, particularly solar, which is bringing in large volumes of low-cost power. At the same time, improved grid management and stronger transmission networks are ensuring that this power is distributed more efficiently across regions. The growing depth and liquidity on power exchanges are also enabling more competitive and transparent price discovery. Put simply, the market is becoming more responsive, and supply is aligning better with real-time demand, reducing price spikes," said Kunal Maheshwari, Chief Growth Officer, Softlink Global.
Better Thermal Generation Back-Up: While renewables drive down marginal costs, coal-based plants have also improved robustness: Improved coal stocks and logistics have reduced unplanned outages. Thermal plants are operating with more predictable dispatch - which tempers price spikes in the spot market.
"The increasing involvement of distribution companies (DISCOMs) in the spot market shows that organizations have started to adopt more advanced methods for their purchasing needs. Buyers use competitive exchange pricing instead of locking themselves into long-term agreements, which require them to pay high prices. The IEX platform provides better market access and price transparency, which helps traders discover prices and prevents tariff increases," said Piyush Jhunjhunwala, Founder & CEO, Stockify.
Jhunjhunwala added, "India's power market has progressed toward increased market control and better operational efficiency. The country achieves stable costs for rising energy needs because multiple power sources and government policies, and digital trading systems work together to meet growing energy requirements."
More Efficient & Transparent Price Discovery: Market maturity is being reflected in how prices are set, not just how much is traded. Growing participation from DISCOMs and industry buyers in spot and real-time markets shifts procurement away from rigid long-term contracts towards competitive, exchange-based prices.
Additionally, the depth across renewable, thermal and real-time segments provides a smoother supply cushion, reducing price volatility. "India's power market is transitioning into a supply abundant and efficiency driven phase. While demand remains strong, GDAM (Green Day Ahead Market) by renewables and improved thermal plant performance is outpacing it, creating periodic surplus conditions. The increased share of solar and wind generations with lower prices is structurally pulling down market clearing prices... This signals a shift from capacity constraints to optimization, reinforcing the ever demand of hybrid solutions, grid readiness and cost efficient execution," said Srinivas Suthram, Senior Vice President, Kshema Power India.
Transmission & Grid Readiness Improves Integration: Transmission upgrades under the Green Energy Corridor programme and other grid expansions have reduced bottlenecks.
Improved connectivity means:
- Low-cost power can be dispatched farther and more efficiently.
- Regional imbalances are less likely to create localised price spikes.
Structural Shifts in India's Power Mix
The share of thermal in generation is set to fall below 70 per cent next fiscal, while renewables continue double-digit growth.
| Generation Source | Trend Impact |
| Renewables (solar, wind, hydro) | Large supply additions → puts downward pressure on short-term prices |
| Thermal | Continues base load role but its relative share is shrinking |
| Grid & transmission capacity | Expanding, smoothing regional supply disparities |
India's power pricing dynamics on exchanges are transitioning from a system where constrained thermal supply dominated pricing to one where abundant renewable supply, competitive auctions and sophisticated trading mechanisms are setting prices. Prices aren't falling because demand is weak; they're falling because supply has become more robust, more diverse and more responsive.
