Why power prices plunged to near zero in IEX real-time market

New Delhi: On August 25, India’s electricity prices in the real-time market on the Indian Energy Exchange (IEX) fell to record lows, averaging ₹0.86 per unit till 4:30 PM and dropping to ₹0.01 per unit in a single 15-minute trading block (07:45–08:00 AM). The sharp decline reflected surplus availability of renewable power and improved liquidity on the exchange.This comes at a time when India’s power demand is at historic highs. Energy consumption in August 2025 (till August 24) touched 117.6 billion units (BUs), showing 4.8% growth year-on-year. Peak demand climbed to 229 GW on August 7, surpassing the previous record of 216 GW in August 2024.Demand rising, but liquidity keeping prices competitiveDespite the demand surge, IEX data shows that sell-side liquidity in the Day-Ahead Market (DAM) rose by more than 45% year-on-year during August. The increase has been attributed to higher generation from wind, hydro, and solar projects, especially during the monsoon period.As a result, power prices have stayed competitive. From August 1–25, 2025, the average DAM price stood at ₹4.13 per unit, which was 9% lower year-on-year, while the Real-Time Market (RTM) averaged ₹3.40 per unit, down 8% over the same period.According to the exchange, heavy rainfall on August 25 further boosted availability, contributing to the steep price fall in the real-time segment.Consumer benefits from near-zero pricesThe Indian Energy Exchange noted that such conditions open up opportunities for distribution companies (Discoms) and commercial & industrial (C&I) consumers.“These prices present an opportunity for Discoms and Commercial & Industrial consumers to meet their demand at a competitive price and to replace their costlier power by procuring through exchanges,” said Rohit Bajaj, Joint Managing Director, Indian Energy Exchange.The possibility of procuring electricity at rates as low as ₹0.01 per unit in some time blocks allows buyers to reduce procurement costs significantly, particularly when compared to long-term contracts or costlier thermal generation.The role of renewables and seasonal factorsThe decline in prices in August 2025 highlights how seasonal renewable generation shapes power market trends. Higher wind generation in coastal regions, strong hydropower output from monsoon-fed reservoirs, and sustained solar availability together improved sell-side volumes on the exchange.Such trends are expected during the monsoon period when demand growth is accompanied by surplus renewable supply. This combination creates conditions for competitive price discovery in both the DAM and RTM.Outlook: balancing demand growth and price trendsIndia’s electricity consumption is expected to keep rising in the coming months. The record 229 GW demand recorded in August has reinforced projections of continued growth, with industrial activity and household demand driving consumption.At the same time, the increasing penetration of renewables, coupled with high seasonal output, has begun to influence price formation more strongly in the market. Data from IEX suggests that, despite the peak demand scenario, exchange-based prices have remained lower year-on-year, indicating that liquidity from clean energy sources is cushioning the impact of demand growth.

The ability of consumers—particularly Discoms and large industries—to take advantage of such competitive prices depends on timely participation in the exchange markets and effective scheduling. For now, the combination of demand growth and surplus renewable supply has underscored the evolving dynamics of India’s power market.>