- Solar surplus keeps midday power prices low
- Evening supply tightens, power prices surge
The hourly trends complement the broader July power market analysis. Electricity demand remained robust, coal-fired generation increased to compensate for weak hydropower, thermal power plant coal inventories declined only gradually, and the market continued to experience sharp evening price spikes despite comfortable fuel availability.
The data suggest that India’s power market is increasingly being driven by when electricity is available, rather than whether electricity is available.
Midday oversupply continued to suppress prices
The hourly price profile shows that the lowest market clearing prices consistently occurred during solar generation hours.
As utility-scale solar generation increased through the morning, sell bids expanded rapidly and exceeded purchase bids by a wide margin. This surplus of available generation pushed market clearing prices sharply lower, with several hours recording extremely low prices and, on some days, prices approaching the market floor.
The pattern was most evident between approximately 10:00 am and 3:00 pm, when renewable output was at its highest.
This reflects the continued expansion of India’s solar capacity, which is increasingly setting spot market prices during daylight hours. Generators compete aggressively to dispatch available renewable power, resulting in abundant exchange liquidity and compressed prices.
Evening market remains fundamentally tight
The picture changed rapidly after sunset.
As solar generation declined, the supply surplus disappeared, and dispatchable generation became increasingly valuable. Market clearing prices rose sharply during the evening demand peak, with several days witnessing prices approaching the exchange ceiling.
Unlike the daytime market, evening trading was characterised by strong growth in purchase bids, reduced sell-side liquidity, lower scheduled volumes relative to buying interest, and higher price volatility.
This indicates that flexible generation continued to command a significant premium despite adequate overall generation capacity.
Monsoon moderated demand — but not enough
The July monsoon provided only partial relief to electricity demand.
Earlier in the month, rainfall temporarily reduced cooling demand across parts of the country. However, the impact proved uneven as rainfall distribution remained patchy and hydropower generation lagged seasonal expectations.
Consequently, although renewable generation remained strong during daylight hours, hydro generation did not provide the flexible evening support normally associated with a healthy monsoon.
The burden therefore shifted back to coal-fired generation.
Coal remains balancing fuel
The hourly IEX data reinforce the broader generation trends observed during July. Coal plants increasingly acted as balancing resources, ramping output as renewable generation declined during late afternoon and evening.
This is consistent with the Central Electricity Authority’s flexible operation framework, under which thermal stations are progressively operating at lower technical minimum loads before increasing output to meet evening demand.
Rather than running continuously at maximum output, coal stations are increasingly responding to hourly changes in renewable availability.
The market therefore reflects the changing operational role of thermal generation — from traditional baseload supply to flexible system balancing.
Bid patterns reveal changing market dynamics
The hourly bid profile provides further insight into market behaviour. During solar hours, sell bids frequently exceeded purchase bids by a substantial margin, creating intense competition among generators and depressing prices.
The reverse occurred during evening hours. Purchase bids increased sharply while sell bids contracted as generators retained power for contracted obligations or internal balancing requirements rather than offering additional volumes into the exchange.
The resulting imbalance explains why prices could spike despite the country maintaining comfortable coal inventories and adequate installed generating capacity. The issue was one of flexible supply availability, not a shortage of fuel.
Coal stocks remain comfortable despite higher generation
The hourly trading data also align with developments in the coal market. Thermal power plant inventories declined steadily through July as coal-fired generation increased, but stock levels remained well above those seen during previous periods of supply stress.
More importantly, the number of critically stocked plants continued to decline even as aggregate inventories reduced, indicating that coal logistics and dispatch remained efficient. This demonstrates that the higher evening prices observed on IEX were not driven by coal shortages.
Instead, they reflected the premium placed on dispatchable generation during periods when renewable output was unavailable.
Implications for market participants
July’s hourly IEX data reinforce a trend that has become increasingly evident over the past year. India’s spot power market is now characterised by pronounced intraday price volatility, with abundant renewable generation compressing daytime prices while evening demand continues to depend heavily on flexible thermal generation.
The data also show that healthy coal inventories do not necessarily translate into low exchange prices. Despite comfortable fuel availability and robust domestic coal supplies, prices remained highly sensitive to the hourly balance between renewable output and dispatchable generation.
For generators, this places greater emphasis on operational flexibility rather than simply maximising utilisation. For traders and distribution companies, the value increasingly lies in anticipating hourly supply-demand imbalances rather than relying on daily averages. And for policymakers, the findings reinforce the importance of expanding pumped storage, battery energy storage and flexible thermal operations to complement India’s rapidly growing renewable fleet.
Taken together with July’s demand, generation and coal stock data, the hourly IEX profile suggests that the market is increasingly rewarding flexibility. As renewable capacity continues to expand, the greatest opportunities — and the greatest risks — will increasingly arise not from the availability of electricity over an entire day, but from its availability during specific hours.
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