NEW DELHI : New Delhi: Real-time market (RTM) electricity prices on the Indian Energy Exchange (IEX) plunged to nearly 10 paise per unit on Tuesday, extending a trend of prices repeatedly falling to near zero during the June quarter amid heavy rains across north India.

Persistently low electricity prices since last year caused by renewable generation outpacing daytime demand are becoming a growing concern for investors as India targets 500GW of non-fossil fuel capacity by 2030.

Distribution companies (discoms) are increasingly offloading surplus green power on exchanges at prices well below procurement costs—typically more than ₹2 per unit for renewable power and over ₹3 per unit for firm and dispatchable renewable energy (FDRE) and hybrid projects.

To be sure, only about 13% of the country's electricity is traded on power exchanges, while the rest is supplied under long-term power purchase agreements (PPAs) between generators and discoms.

“Renewable energy projects involve significant upfront investment and relatively low operating costs. Any reduction in the ability to evacuate power due to transmission constraints, grid requirements or periods of very low market prices can impact project revenues and returns, particularly for projects with greater exposure to merchant markets,” said Ratul Puri, chairman, power developer Hindustan Power Ltd.

Green power oversupply

Around 1pm on Tuesday, real-time electricity prices fell to 9 paise per unit as weak demand and abundant solar and wind generation created a power surplus.

Prices fell below ₹0.05 31 times—8 days in April, 14 days in May and 9 days in June in the first quarter of 2026-27, showed data from the IEX. Prices touched zero on 1 May. In the year-ago quarter, prices fell below ₹0.05 per unit six times.

While renewable power generation has risen sharply in the country, with solar and wind generation reaching 90.09 gigawatts around 1pm, meeting nearly 39% of the country's total electricity demand of 230.63GW.

However, the average market-clearing price in April, May and June has still been higher this year at ₹4.82, ₹4.16, and ₹4.36 per unit, respectively, due to a rise in overall demand, compared to ₹4.48, ₹3.43 and ₹3.73 in the corresponding months a year ago.

“When solar supply floods the grid, it results in lower price discovery on energy exchanges as observed on the IEX Day-Ahead Market where mid-day prices fell to between ₹0 and ₹0.30/kWh on several days in late May and early June 2025,” said Anujesh Dwivedi, partner, business consulting firm Deloitte India.

He noted that there had been a marked shift towards solar FDRE tenders in recent years, driven by the need to manage grid instability and distribution utility demands.

Demand-price dichotomy

Significantly, the decline in power prices comes despite rising electricity demand. The country's peak power demand hit a record 270.8GW on 21 May and is expected to reach 272GW this fiscal year. The power ministry has projected peak demand to rise further to 300GW in FY28.

Noting this dichotomy, Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister (EAC-PM), said in a recent working paper that the country's power demand is not only large but also extremely volatile even within the duration of a single day.

“On 21 May 2026, India's power grid set an all-time record. At 3:45pm, the peak demand met reached 270.8GW. As striking as the quantum of the load was the speed of its change. At 8am on the same day, demand sat at 224.1GW. In less than eight hours, the grid took on an additional load of 46.7GW, more than the entire British grid drew at its peak in all of 2025,” said the working paper titled The Duck and The Camel: Tracing the Net Load on the Indian Power Grid, co-authored by Sanyal and Satvik Dev, joint director, EAC-PM.

He added that the price of electricity tells a similar story. On the same day, a unit of power scheduled for delivery at 1pm cleared at just ₹1.56. The same unit scheduled for 6:30pm cleared at ₹10.00, the market's price ceiling. More than six times the price, for the same electricity, a few hours apart.

“Importantly, the record demand peak at 3:45pm was not the moment of the highest price, because the sun was still up. The price did not hit its ceiling until 6:30pm, once solar had faded. Peak demand and peak price often fall at different hours of the day, and the gap between them has become an important feature of the modern Indian grid,” he wrote

Sanyal suggested that the best way to smooth these fluctuations in demand and price is to store electricity when it is abundant and release it when it is scarce.

The government is already ramping up efforts to boost battery adoption, and discoms across the country are also coming up with tenders for battery energy storage systems.

NEW DELHI : New Delhi: Real-time market (RTM) electricity prices on the Indian Energy Exchange (IEX) plunged to nearly 10 paise per unit on Tuesday, extending a trend of prices repeatedly falling to near zero during the June quarter amid heavy rains across north India.

Persistently low electricity prices since last year caused by renewable generation outpacing daytime demand are becoming a growing concern for investors as India targets 500GW of non-fossil fuel capacity by 2030.

Distribution companies (discoms) are increasingly offloading surplus green power on exchanges at prices well below procurement costs—typically more than ₹2 per unit for renewable power and over ₹3 per unit for firm and dispatchable renewable energy (FDRE) and hybrid projects.

To be sure, only about 13% of the country's electricity is traded on power exchanges, while the rest is supplied under long-term power purchase agreements (PPAs) between generators and discoms.

“Renewable energy projects involve significant upfront investment and relatively low operating costs. Any reduction in the ability to evacuate power due to transmission constraints, grid requirements or periods of very low market prices can impact project revenues and returns, particularly for projects with greater exposure to merchant markets,” said Ratul Puri, chairman, power developer Hindustan Power Ltd.

Green power oversupply

Around 1pm on Tuesday, real-time electricity prices fell to 9 paise per unit as weak demand and abundant solar and wind generation created a power surplus.

Prices fell below ₹0.05 31 times—8 days in April, 14 days in May and 9 days in June in the first quarter of 2026-27, showed data from the IEX. Prices touched zero on 1 May. In the year-ago quarter, prices fell below ₹0.05 per unit six times.

While renewable power generation has risen sharply in the country, with solar and wind generation reaching 90.09 gigawatts around 1pm, meeting nearly 39% of the country's total electricity demand of 230.63GW.

However, the average market-clearing price in April, May and June has still been higher this year at ₹4.82, ₹4.16, and ₹4.36 per unit, respectively, due to a rise in overall demand, compared to ₹4.48, ₹3.43 and ₹3.73 in the corresponding months a year ago.

“When solar supply floods the grid, it results in lower price discovery on energy exchanges as observed on the IEX Day-Ahead Market where mid-day prices fell to between ₹0 and ₹0.30/kWh on several days in late May and early June 2025,” said Anujesh Dwivedi, partner, business consulting firm Deloitte India.

He noted that there had been a marked shift towards solar FDRE tenders in recent years, driven by the need to manage grid instability and distribution utility demands.

Demand-price dichotomy

Significantly, the decline in power prices comes despite rising electricity demand. The country's peak power demand hit a record 270.8GW on 21 May and is expected to reach 272GW this fiscal year. The power ministry has projected peak demand to rise further to 300GW in FY28.

Noting this dichotomy, Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister (EAC-PM), said in a recent working paper that the country's power demand is not only large but also extremely volatile even within the duration of a single day.

“On 21 May 2026, India's power grid set an all-time record. At 3:45pm, the peak demand met reached 270.8GW. As striking as the quantum of the load was the speed of its change. At 8am on the same day, demand sat at 224.1GW. In less than eight hours, the grid took on an additional load of 46.7GW, more than the entire British grid drew at its peak in all of 2025,” said the working paper titled The Duck and The Camel: Tracing the Net Load on the Indian Power Grid, co-authored by Sanyal and Satvik Dev, joint director, EAC-PM.

He added that the price of electricity tells a similar story. On the same day, a unit of power scheduled for delivery at 1pm cleared at just ₹1.56. The same unit scheduled for 6:30pm cleared at ₹10.00, the market's price ceiling. More than six times the price, for the same electricity, a few hours apart.

“Importantly, the record demand peak at 3:45pm was not the moment of the highest price, because the sun was still up. The price did not hit its ceiling until 6:30pm, once solar had faded. Peak demand and peak price often fall at different hours of the day, and the gap between them has become an important feature of the modern Indian grid,” he wrote

Sanyal suggested that the best way to smooth these fluctuations in demand and price is to store electricity when it is abundant and release it when it is scarce.

The government is already ramping up efforts to boost battery adoption, and discoms across the country are also coming up with tenders for battery energy storage systems.