India’s power market has been buzzing with action, and the Indian Energy Exchange (IEX) remains at the center of it. As the stock has slipped nearly 37% from its 52-week high peak, the big question that might be in one’s mind is- Is it time to buy? A recent report by the brokerage firm Nuvama gives a highlight into these dynamics of power demand, thermal generation, and electricity prices.
Power demand surges despite renewable energy slump
According to the brokerage report, India’s power demand jumped 6.6% year-on-year in February 2025, touching 131 billion units (BU).
Interestingly, this growth came even as renewable energy (RE) generation remained low. The non-fossil fuel mix stood at just 21%. The report attributes the rising demand to changing temperatures and an uptick in industrial activity as the financial year nears its end.
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With renewable energy contribution dipping, thermal power stepped in to bridge the gap. According to the brokerage report, thermal power’s share rose to 79% in February, up from 77% last month. The Plant Load Factor (PLF), a measure of efficiency climbed to 73.1%, compared to 71.6% in February 2024.
Meanwhile, power prices saw an interesting trend. While IEX prices averaged Rs 5.0/unit, almost flat year-on-year, there was a noticeable rise in non-solar hours pricing, climbing to Rs 3.7/unit from Rs 3.3/unit in January. However, peak-hour power prices spiked to INR 10/unit on a few occasions.
IEX volumes expand 14% YoY
Despite price fluctuations, IEX’s Day-Ahead Market (DAM) volumes surged 14% year-on-year in February. The brokerage in its report notes that high prices during solar hours (Rs 5.0/unit) did not deter trading activity. At the same time, peak power demand saw a modest 0.32% month-on-month increase, signaling stability.
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With India’s power demand on an upward trend, IEX remains a key player. The broader market correction has pulled the stock down from its highs, but the brokerage suggests keeping an eye on power sector developments, especially renewable energy additions, thermal power trends, and pricing movement in both solar and non-solar hours.
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