Average Day Ahead Market price rises 105% to ₹7.3 per unit as peak demand reaches 269 GW and electricity consumption grows 11%
Spot electricity prices on the Indian Energy Exchange (IEX) more than doubled in September 2026, reflecting a sharp increase in power demand across the country and stronger buying interest in the exchange's Day Ahead Market.
The average market clearing price in the Day Ahead Market (DAM) stood at ₹7.3 per unit during September, rising 105 per cent from the same month last year, according to IEX. The sharp increase highlights the pressure on the electricity market as demand remained elevated during the month.
Buy Bids Jump 281%
The biggest factor behind the increase in spot power prices was the sharp rise in demand from buyers.
Buy bids in the Day Ahead Market increased 281 per cent year-on-year during September, significantly outpacing the growth in electricity traded volumes. Stronger demand allowed market prices to rise as buyers competed for available power.
The increase in buy bids also indicates that power consumers were willing to pay higher prices to secure electricity amid periods of elevated system demand.
Real-Time Market Prices Also Surge
The increase was not limited to the Day Ahead Market. The average market clearing price in IEX's Real Time Market (RTM) reached ₹6.9 per unit in September, representing a 108 per cent year-on-year increase.
The RTM allows participants to buy and sell electricity closer to the actual delivery period and therefore provides an important indicator of immediate supply-demand conditions.
The sharp increase in both DAM and RTM prices suggests that the power market experienced broad-based demand pressure rather than a temporary movement confined to one trading segment.
Electricity Consumption Rises 11%
India's overall electricity demand remained strong throughout September.
Peak power demand touched 269 GW on September 10, 2026, while the country's total energy consumption reached 162 billion units (BUs), an increase of 11 per cent compared with the previous year.
The increase reflects growing electricity requirements from households, commercial establishments and industrial consumers. Rising economic activity, cooling requirements and broader electrification are also contributing to the structural increase in India's electricity consumption.
IEX Trading Volumes Grow 10.4%
Despite the sharp increase in prices, electricity trading volumes on IEX also expanded.
The exchange recorded 12,220 million units (MUs) of electricity traded during September, representing a 10.4 per cent year-on-year increase.
The combination of higher prices and stronger volumes is significant for the exchange because it indicates that increased electricity demand is translating into greater market activity.
For IEX, sustained growth in traded volumes remains an important factor for revenue and transaction activity, although regulatory changes and market design reforms continue to influence the competitive environment.
Q2 FY27 Records Strong Growth
The September performance contributed to a strong second quarter for the power exchange.
During Q2 FY27, electricity traded on IEX increased 12.7 per cent year-on-year to 39,685 MUs. At the same time, the average market clearing price in the Day Ahead Market rose 46 per cent to ₹5.7 per unit from ₹3.9 per unit in the corresponding quarter of the previous year.
The Real Time Market also recorded a significant increase in prices. Its average market clearing price rose 49 per cent year-on-year to ₹5.2 per unit during the quarter.
The increase in prices was accompanied by strong underlying electricity demand, with India's energy consumption reaching 502 billion units during Q2 FY27, up 11.5 per cent from a year earlier.
Day Ahead Market Volumes Remain Resilient
The Day Ahead Market, including the High Price Day Ahead Market, recorded electricity volumes of 14,855 MUs during Q2 FY27.
This was marginally higher than the 14,534 MUs recorded in Q2 FY26, representing growth of 2.2 per cent.
The DAM accounted for 37.4 per cent of IEX's total electricity traded volumes during the quarter, making it one of the most important segments for the exchange.
While volume growth was relatively modest compared with the overall increase in electricity traded through IEX, the substantial increase in market clearing prices provided an additional boost to the value of transactions.
Green Power Trading Remains Under Pressure
Not every segment of the electricity market recorded growth.
The IEX Green Market, which includes the Green Day Ahead Market and Green Term Ahead Market, recorded volumes of 2,863 MUs during Q2 FY27. This represented a 5.8 per cent decline from 3,040 MUs in the same quarter of the previous year.
The decline highlights the uneven performance across different power-market segments despite strong overall electricity demand.
The long-term expansion of renewable power remains important for India's energy transition, but the development of green-power trading volumes will depend on renewable generation, transmission availability, demand from buyers and regulatory frameworks.
Rising Power Demand Creates Opportunities and Risks
The sharp rise in spot electricity prices provides a mixed picture for the power industry.
For power producers with surplus electricity available for exchange-based sales, higher market prices can improve realisations and potentially strengthen operating performance.
For industrial and commercial consumers that rely on short-term power purchases, however, higher spot prices can increase electricity costs and put pressure on operating margins.
The impact will therefore vary significantly across companies depending on their generation capacity, power procurement strategy and exposure to exchange-based transactions.
Structural Demand Growth Remains Key
India's electricity demand has been on a long-term upward trajectory as economic activity expands and electricity becomes increasingly important across manufacturing, infrastructure, transport, digital services and households.
The rapid expansion of data centres, electric vehicles, industrial capacity and air-conditioning demand could further increase the country's electricity requirements over the coming years.
This creates a structural opportunity for power generators, transmission companies, renewable-energy developers and electricity-market platforms. At the same time, adequate generation capacity and transmission infrastructure will be essential to prevent demand-supply imbalances from causing prolonged price spikes.
Market Outlook
The September data highlights the growing intensity of India's electricity demand. IEX's Day Ahead Market price more than doubled year-on-year to ₹7.3 per unit, while RTM prices rose to ₹6.9 per unit. The 281 per cent jump in DAM buy bids shows that demand pressure was a major factor behind the price surge.
For IEX and power-market participants, stronger electricity consumption and rising traded volumes provide a positive operating backdrop. However, exceptionally high spot prices can also encourage consumers to shift towards longer-term contracts or alternative procurement arrangements if elevated prices persist.
Going ahead, investors will closely monitor October power demand, weather conditions, generation availability, fuel costs and renewable-energy output. If India's electricity consumption continues to grow at double-digit rates, power exchanges and generators could see sustained opportunities, although volatility in spot prices is likely to remain an important feature of the market.