Spot electricity prices on power exchanges fell below ₹1 per unit during solar hours on nearly 25% of the days in FY26, with prices touching near-zero levels across multiple time blocks, triggering a sharp shift in industrial power procurement and pushing participation by open-access consumers up by more than 50% year-on-year.
The trend is reshaping power sourcing strategies across India’s manufacturing sector, where electricity accounts for as much as 50% of operating costs in energy-intensive industries such as cement, metals, automobiles, chemicals and paper.
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Data from the Indian Energy Exchange (IEX) showed average electricity prices during solar hours stood at around ₹2.10 per unit in FY26. During the winter months between November and February, average night-time prices remained around ₹2.65 per unit, allowing industries to optimise procurement costs across both daytime and off-peak periods.
The emergence of ultra-low-cost market power comes as Indian industry seeks to improve competitiveness amid an ambitious national export target of $1 trillion by FY27 and $2 trillion over the following five years.
The availability of cheaper exchange-based electricity is increasingly encouraging open-access consumers to supplement conventional power sourced from discoms and captive plants.
Market Mechanics
Reflecting this shift, participation by commercial and industrial consumers on power exchanges expanded by more than 50% during FY26, making market-linked procurement an increasingly important component of industrial energy strategies.
The development marks a significant evolution in India’s power market since the Electricity Act, 2003 enabled consumers to procure electricity through competitive markets under open-access provisions. State-level open-access policies have further expanded participation, allowing industries to align procurement decisions with production schedules, demand patterns and generation availability.
Power exchanges today offer multiple procurement avenues, including the Day-Ahead Market (DAM), Real-Time Market (RTM), Green Markets and renewable energy certificates, enabling consumers to optimise costs while meeting sustainability commitments, renewable purchase obligations and net-zero goals.
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Several state governments are also encouraging renewable energy procurement through Green Day-Ahead Market transactions by providing exemptions from additional surcharges.
Corporate Sourcing Shifts
“Power exchanges have become an important part of our overall power procurement strategy, helping us make sourcing decisions in a far more dynamic and cost-efficient manner,” said Naresh Yadav, General Manager – Power & Gas Procurement, ArcelorMittal Nippon Steel.
“Through the Day-Ahead and Real-Time Markets, we are able to respond more dynamically to changing price trends, weather conditions and supply availability. This flexibility helps us optimise sourcing decisions, reduce dependence on higher-cost power and ultimately improve cost efficiencies for the business,” he added.
Pankaj Goel, Director, Amba Shakti TMT Bars, said improved price visibility and access to short-term products were helping industries align energy sourcing with production cycles while integrating green power without long-term commitments.
For power-intensive industries, even modest reductions in electricity costs can translate into meaningful improvements in operating margins. As renewable energy capacity expands and market-based price discovery deepens, exchange-based procurement is increasingly emerging as a strategic lever for improving manufacturing competitiveness, lowering production costs and supporting India’s export ambitions.
TOPICSPowerThis article was first uploaded on June twenty-one, twenty twenty-six, at fifty-eight minutes past six in the evening. © The Indian Express (P) Ltd