Indian Energy Exchange : Annual Report FY 2023-24

ANNUAL REPORT

2023-24

TRANSFORMING

P O W E R M A R K E T S

I N D E X

Corporate Overview

PAGE 04-47

A Strong, Value-driven Organisation
Shaping India's Energy Landscape	02
Who We Are	03
Financial Year 2024	04
A Nation Electrified	06
Message to Shareholders	07
IEX geared up for India's Renewable Energy Future	13
Leveraging Opportunities in a Dynamic Power Market	15
IEX's Sustainability Journey	17
Forefront of Technological Transformation	18
Timeline	20
Operational Highlights FY'24	22
Market Segments	24
Expanding Horizons	25
IGX - Building a Vibrant Gas Market in India	26
Effective Corporate Governance
Leading to Sustainable Value Creation	28
Board of Directors	30
Leadership Team	31
Great Place To Work	32

Statutory Report

PAGE 50-112

Management Discussion and Analysis	34
Director's Report	54
Corporate Governance Report	85
Business Responsibility and Sustainability Report	112

Financial Statements

PAGE 154-214

Standalone Financial Statements	154
Consolidated Financial Statements	214

Indian Energy Exchange Limited

IEX: A STRONG, VALUE-DRIVEN ORGANISATION

SHAPING INDIA'S ENERGY LANDSCAPE

At IEX, our commitment to excellence is deeply rooted in our core values, guiding every aspect of our operations as we navigate the complexities of India's energy landscape. With a relentless focus on flexibility, transparency, and customer centricity, we have cultivated a culture of excellence that drives us to constantly innovate and exceed expectations. Our unwavering dedication to our values empowers us to build trust, foster meaningful relationships, and deliver sustainable value to all our stakeholders. As a value-driven organisation, we remain steadfast in our mission to shape the future of energy in India, driving positive change and creating lasting impact.

Corporate Overview Statutory Report Financial Statements

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Annual Report 2023-24

WHO WE ARE

Providing a nationwide, automated trading platform for physical delivery of electricity, renewable energy and certificates. The exchange platform enables efficient price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed and efficiency of trade execution.

VISION

To be the architect of next-generation solutions for sustainable energy ensuring competitive, transparent, and reliable access.

MISSION

To leverage technology and innovation to establish transparent and efficient energy marketplace for delivering affordable, reliable energy to consumers.

IEX PROMISE

Power on Demand	Transparency through
24x7	Standardised Contracts

Competitive Prices	Payment Security
driving Social Welfare	with Robust Risk
Maximisation	Management Principles

Flexibility to Trade in 15-Mins Time Block

Corporate Overview Statutory Report Financial Statements

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Indian Energy Exchange Limited

Corporate Overview Statutory Report Financial Statements

FINANCIAL YEAR 2024:

A YEAR OF ROBUST GROWTH

IEX Transforming India's Power Market

In a dynamic energy environment with growing market opportunities, IEX achieved significant growth in Financial Year 2024. By strategically expanding its productportfolio,enteringnewmarkets,andcontinually advancing our technology, IEX successfully navigated challenges and leveraged new trends, delivering solid value to our stakeholders.

110.1 BU

Trading Volumes

14% YoY

• 550.8 Cr.

Consolidated Revenue

16% YoY

• 350.8 Cr.

Consolidated PAT

15% YoY

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Annual Report 2023-24

With its transformative business model, the Indian Energy Exchange is creating tremendous value for its shareholders, year on year.

IEX STANDALONE FY24

REVENUE (` in Crores)		EBITDA (` in Crores)		NET PROFIT (` in Crores)
+ 76.7				+ 70.4			+ 48.7
	477.9	474.1	550.8		417.9	409.7	480.1		302.5	292.7	341.4
297.2	357.4			244.6	299.7			177.9	213.5

Corporate Overview

FY'20 FY'21 FY'22 FY'23 FY'24

FY'20 FY'21 FY'22 FY'23 FY'24

FY'20 FY'21 FY'22 FY'23 FY'24

EPS* (in `)				NET WORTH (` in Crores)	MARKET CAPITALISATION
+ 0.57				+ 163.7				(` in Crores)**
						+ 570.7
										20,193
1.99	2.38	3.38	3.27	3.84	390.2	531.4	702.0	784.5	948.2	9,969	11,409	11,980
										3,833
FY'20	FY'21	FY'22	FY'23	FY'24	FY'20	FY'21	FY'22	FY'23	FY'24	FY'20 FY'21	FY'22	FY'23	FY'24

Statutory Report Financial Statements

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Indian Energy Exchange Limited

Corporate Overview Statutory Report Financial Statements

A NATION ELECTRIFIED

India's story is one of remarkable ascension. Its population, currently at 1.4 billion, is projected to reach 1.5 billion by 2030, solidifying its position as a global powerhouse. The economy is booming with a growth of 8.2% in FY'24. This economic vibrancy is mirrored in rapid urbanisation, as the World Bank estimates India's urban population to reach 600 million by 2036.

The consequence of this growth trajectory and urbanisation is a surging demand for electricity. The Central Electricity Authority expects commercial and industrial sectors - the engines of economic growth - to witness a faster rise in power consumption compared with the residential sector. The CEA has forecast energy demand of 2,279 BU and a peak demand of 335 GW by FY'30. Till FY42, CEA has forecast 3,805 BU of electricity demand. This demand for power underscores the need

Growing industrialisation, increased urbanisation, and the government's focus on providing 24x7 power to all, along with the impetus on electrification as a means to achieve decarbonisation - from cooking to railway traction and electric vehicles - will all contribute significantly to an increase in power consumption in the country.

for a robust, reliable, and adaptable power sector. The government's focus on electrification as a means to achieve decarbonisation - from cooking to railway traction, and electric vehicles - will also contribute significantly to an increase in power consumption in the country.

India's power sector vision, however, extends beyond merely riding the wave of economic expansion. Recognizing its environmental responsibility, the nation has embarked on an ambitious clean energy journey. The target of 500 GW of renewable energy capacity by 2030, of which 191 GW have already been achieved at the end of FY'24, reflects a deep commitment to a sustainable future.

In India's dynamic power sector landscape, IEX stands as a critical facilitator. By fostering a transparent and efficient electricity trading platform, IEX empowers stakeholders to navigate the evolving energy landscape. India's power sector transformation is a story of progress, a narrative of balancing growth with sustainability. IEX, through its commitment to innovation and market transparency, is poised to play a key role in the ongoing reform transition, illuminating the path towards a brighter, more sustainable energy future for India.

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Annual Report 2023-24

MESSAGE TO SHAREHOLDERS

Dear Shareholders,

The Indian economy continues to be the fastest growing major economy in the world, backed by strong private consumption, higher capital expenditure, and a robust financial sector. With a GDP growth of 8.2% in FY'24, the country is well-positioned to become a $5 trillion economy by 2027-28 and surpass Germany and Japan to become the third largest economy in the world.

Such an economic expansion has visible footprints in the country's power sector. Electricity, being the core of all industrial and commercial activity, saw a consequent surge in demand in FY'24. Power consumption rose 7.7 percent on YoY basis to reach 1,622 billion units (BU) in FY '24. India's daily peak power demand reached 240 GW in September 2023, whi.ch was the highest-ever daily peak recorded in the country. Recently in May 2024, India met a record maximum power demand of 250 GW. It is projected that India would contribute approximately 25 percent of the total global energy demand growth over the next 15 years. As per the CEA, electricity consumption is expected to increase at a rate of over 6 percent per annum to reach 2,279 BU by 2030. This provides a large growth potential for the country's electricity sector.

India's present installed capacity is at 442 GW with renewable capacity of 191 GW, which is 43 percent of total capacity. Having added nearly 19 GW of RE capacity in FY'24, India had one of the fastest renewable energy (RE) capacity addition among major economies in this financial year. To meet India's growing electricity demand, the Government has already put in place capacity addition plans for both thermal and renewable power. Around 15GW of thermal capacity is expected to be commissioned in FY'25. About 50GW or more thermal capacity will be added in the next 4-5 years. Additionally, 140GW of green energy capacity is under tendering and implementation. Already the Ministry of

It is projected that India would contribute approximately 25 percent of the total global energy demand growth over the next 15 years.

SATYANARAYAN GOEL

Chairman & Managing Director

Power has planned to add 50GW of RE capacity every year to achieve 500GW RE capacity by 2030.

To enable renewable power integration with the grid, the Ministry of Power has finalised Viability Gap Funding mechanism to develop Battery Energy Storage Systems (BESS) in the country. To begin with, BESS capacity of 4,000 MWh will be developed on this proposed model. Under this model, BESS would be able to store surplus solar power during day-time and deliver electricity during hours of peak demand and also be able to stabilize the grid by providing ancillary services. One of the options considered for charging and discharging of the BESS is through Power Exchanges. Additionally, the Government is also pushing the Green Hydrogen Mission with 125 GW of green energy requirement for Green Hydrogen of 5 million tonnes per annum by 2030.

While global economies have been severely impacted due to supply disruptions caused by adverse geopolitical events over the last two years, the Indian economy has managed these intermittent crises well. Policy interventions by the Government of India have helped increase domestic fuel production and eased supply constraints. Contrary to last year, we are now witnessing a scenario where there is no fuel shortage. India's coal production increased 11.7% YoY to nearly touch 1,000 million tonnes in FY'24. The Ministry of

Corporate Overview Statutory Report Financial Statements

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Indian Energy Exchange Limited

Corporate Overview Statutory Report Financial Statements

Coal's Shakti Policy has also allowed power plants, including private generators without PPAs, to sell power in all market segments of Power Exchanges. Premium on coal under Shakti B8 auction came down to around 20% by the end of FY'24 and coal inventory was at a comfortable 20 days. Overall, the fuel crisis witnessed last fiscal subsided in FY'24.

As India marches towards achieving its net zero target, there is bound to be a much larger role of Power Exchanges in the country's energy landscape. The draft National Electricity Policy (2023) aims to increase the share of exchanges to 25 percent by 2030, underlining their importance in the energy transition of the nation. Globally, Power Exchanges have played a crucial role in reducing the cost of renewable integration and providing efficient price signals for newer capacity addition. Power markets in India too are poised to serve as catalysts for accelerating this renewable generation capacity addition in the country.

POLICY AND REGULATORY ENABLERS THAT DEEPENED POWER MARKETS

During FY'24 there were some noteworthy policy and regulatory initiatives that continued to deepen India's power markets and accelerate energy transition towards sustainability and self-sufficiency. Some of these key initiatives were:

• The Ministry of Power notified the amended Late Payment
  Surcharge Rules which mandates generators having PPAs to offer surplus URS power for sale on the Power Exchange. These rules also provide for penalty in terms of reduced fixed charges to Gencos if they fail to offer URS power in the market. This has improved sell liquidity on the Exchange platform. Already we are witnessing around 50-
  60 MU of URS power being offered on the Exchange on a daily basis.
• Notably, the most important regulatory developments of FY'24 were implementation of the Indian Electricity Grid Code (IEGC); the Sharing of Inter-State Transmission Charges Regulations (ISTS); and the GNA Regulations. Since the implementation of GNA Regulations in October 2023, regulatory anomalies between the bilateral and Day Ahead Market have been removed. Consequently, volumes in the Day Ahead Contingency (DAC) Market have declined, while those in the Day Ahead Market have increased.
  Volume in the DAC market in H2 FY'24 was 690 million units in comparison to nearly 4.2 billion units in H1 FY'24, a decline of 84%.
• The Ministry of Power amended the Electricity Rules paving way for rationalizisation of wheeling charges and additional surcharge for Green Energy Open Access consumers.

Policy interventions by the Government of India have helped increase domestic fuel production and eased supply constraints.

• The CEA finalized a plan for thermal plants to bring their technical minimum operation up to 40%, compared to the current 55%. This will facilitate the integration of more renewable energy capacity and improve grid efficiency.
• The CEA also amended the procedures for cross border trade in electricity, allowing for trade through Real Time Markets operated by Power Exchanges. This has led to increased cross border volumes on the exchange. For FY'24, 4.0 BUs in Cross Border power was traded on exchange, an increase of 52% over last fiscal. A report on
  BIMSTEC Energy Outlook 2035 estimates cross border electricity trade potential in the region can increase up to
  7 times, from 16BU in 2020 to 127 BU in 2035. This will increase CBET volumes at Exchanges.
• REC trading on Power Exchanges has been increased to twice a month. Further, different types of RECs are now fungible as one. Consequently, liquidity has increased in the REC market. Also because of the removal of REC base price, REC prices have come down, leading to increased
  REC sale volume. At 75 lakh certificates REC volume was higher by nearly 27% in FY'24 over FY'23. Since the new REC regulations, prices have continually become more competitive and were traded at a the lowest ever price of ` 140 in the REC trading session held in June 2024 as against ` 1,000 in April 2023. These changes should further incentivise obligated entities to buy RECs to meet their Renewable Purchase Obligations.

All these policy and regulatory measures improved sell side liquidity in the Day Ahead and Real Time Market on the exchange by 17% YoY and helped soften power prices. DAM prices declined to ` 5.24/unit in FY'24 from ` 5.94/ unit in FY'23, a decline of 12% YoY. As prices continue to remain competitive and follow a further downward trajectory, it is expected to present an opportunity for Discoms and Commercial & Industrial consumers to optimize their power procurement cost.

In May 2023, the expert group constituted by the Ministry of Power for 'Development of Electricity Market in India'

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