Indian Energy Exchange reported a 2.8% year-on-year rise in electricity trading volumes to 11.44 billion units in December 2025, showcasing mixed performance across different market segments. While overall volumes grew, the performance varied significantly between different trading platforms.

Market Segment Performance

The exchange's monthly update revealed contrasting trends across its various trading segments. The following table summarizes the key performance metrics:

Real-Time Market Shows Strong Momentum

The Real-Time Electricity Market continued to demonstrate robust growth, with traded volumes rising 20.5% year-on-year to 3,833 million units during December 2025. This strong performance in the RTM segment helped offset the decline witnessed in the Day-Ahead Market, which recorded volumes of 5,899 million units, marking an 11.6% decline compared to the same month in the previous year.

Term-Ahead Segment Registers Exceptional Growth

The Day-Ahead Contingency and Term-Ahead Market segment, including the High-Price Term-Ahead Market, experienced remarkable growth during the month. Total volumes in this segment reached 931 million units in December 2025, representing an impressive 87% jump over December 2024 levels.

Green Market and REC Trading Performance

The renewable energy trading segments showed mixed results during December 2025:

Volumes in the Green Market, comprising the Green Day-Ahead Market and Green Term-Ahead Market, stood at 777 million units during December 2025, showing a marginal decline of 0.5% year-on-year. The weighted average price in the Green Day-Ahead Market for the month was ₹4.21 per unit.

REC Market Activity Remains Subdued

Activity in the Renewable Energy Certificate Market remained notably weak during December 2025. A total of 7.7 lakh RECs were traded during sessions held on December 10 and December 31, 2025, at clearing prices of ₹359 per REC and ₹345 per REC, respectively. The traded REC volume declined 53.7% year-on-year, indicating continued challenges in this segment.

The exchange announced that the next REC trading sessions are scheduled for January 14 and January 28, 2026, as market participants look for potential recovery in renewable certificate trading.

Shares of Indian Energy Exchange (IEX) dropped 4.20% on Friday, hitting an intraday low of ₹133.29, as investor sentiment weakened following the Central Electricity Regulatory Commission (CERC)'s introduction of a framework for Virtual Power Purchase Agreements (VPPAs). The decline has raised concerns about potential implications for trading activity on power exchanges.

CERC's New VPPA Framework

CERC has notified guidelines for VPPAs that allow large electricity consumers to meet their renewable energy obligations without physically purchasing green power. Under the framework, designated consumers can enter into bilateral agreements with renewable energy generators for a minimum tenure of one year. These contracts are non-tradable and non-transferable.

Impact on Exchange Trading

VPPAs are financial arrangements that enable consumers to claim renewable compliance without taking physical delivery of electricity. While the consumer's actual power needs continue to be met through conventional sources such as distribution companies or captive generation, the VPPA creates a financial settlement mechanism between the consumer and the renewable generator.

The framework allows large consumers to meet renewable purchase obligations without routing transactions through power exchanges. This has sparked concerns that demand for exchange-based renewable power products could decline, potentially weighing on trading volumes for platforms such as IEX.

Stock Performance Analysis

Indian Energy Exchange has delivered weak performance over the past year, with the stock declining around 25%. The shares are currently trading close to their 52-week low of ₹130, reflecting sustained selling pressure and cautious investor sentiment amid regulatory and sector-specific concerns.

Technical Analysis

On the technical front, the 14-day Relative Strength Index (RSI) for IEX stands at 44.00, pointing to neutral-to-weak momentum. The current RSI suggests the stock is neither oversold nor showing signs of a strong rebound yet. Further highlighting the weak trend, Indian Energy Exchange is trading below all eight of its key Simple Moving Averages (SMAs), indicating a bearish technical setup.

Market Implications

The VPPA model is likely to benefit large commercial and industrial users, such as data centre operators and multinational technology firms, by offering an alternative pathway to renewable energy compliance without altering existing power procurement arrangements. Under the new structure, renewable energy producers will continue to sell electricity through power exchanges, while large consumers gain flexibility in meeting renewable norms.