Bad perfomance on AC

Check in BIOS settings to see if the AC adapter is recognized and the battery is charging.  A faulty AC adapter may provide power to run the system but CPU performance will be limited by system BIOS and the AC adapter won't charge the battery.  If that is the case, replace the AC adapter will resolve the gaming performance issue.

@Chino de Oro​ I checked it now, the AC adapter is recognized as 65W and the battery is charging

Run some games with the AC adapter plugs in, go to Task Manager, select Performance tab, select CPU and check CPU speed.  Comparing it to the base speed. 

I've also noticed that the speed is around 3GHz when the game isnt running, but when I open the game it drops to around 2Ghz (Base speed : 2.42Ghz)

Disk activity is okay, GPU is in good range, but your system memory ran out and it could be the reason for the framerate to drop and CPU speed to stay low.  Check the processes tab to see which process has taken up the most of your system memory. 

Run the same test again with AC adapter unplugged and check for memory usage.  Start the troubleshooting from there.

OMG thx u so much, I uninstalled  few apps that were working in the background and disabled a few processes, now my memory usage is around 6.8GB and my FPS is 100+. Thanks a lot!

Glad to see the issue was resolved.  If those uninstalled apps are needed, you may consider to add more system memory to accommodate your needs.

There seems to be another problem, My cpu's speed doesn't exceed the base speed whenever I'm playing the game and the FPS drops suddenly. The temperature is around 75C. 

Take note of what change has been made to the system in the past week and undo, uninstall, disable those changes for testing.  There also are few resets to try.  Remove AC power, remove battery, press and hold power button for 30 seconds.  Reattaching powers and test again.

Clear NVRAM, RTC reset.  With power plugs in, press and hold power button until the light lights up.  After release the power button, system should power on and off, cycling a few times.  Afterward, you will need to reset date and time.  This process is not available on all systems.

Reset BIOS settings to default.  Simply access BIOS settings via F2, select default and apply.  If certain custom settings was made, change the settings to match the hardware change.  Save and exit.

Temperature around 75c is not a concern.  The CPU does not get throttled until it gets over 90c.

I did everything u said, I reset the BIOS, cleared NVRAM,RTC reset but nothing seems to work. The FPS isnt very stable.

When you monitor the performance, if you see the FPS dropped when system memory ran out, that is the cause.  Unless your system has memory leak, you can free up memory usage prior to gaming by disable and end task of unneeded apps/services.

Just a thought, web browsers such as chrome and edge are known for memory hoarder.

My ram usage is fine now, when the games running It takes about 75% of the ram. My FPS is at 70-90 but there are random sudden drops and it takes a few seconds for the Fps to get better

It could be other factors, such as the Intel Iris.  You can attempt with roll back driver to see if it can gain previous performance.

I reinstalled the driver, it didn't change much.

I've also noticed something. When I'm running the game on AC, the CPU usage is around 30% and the GPU usage is at 100%. When I unplug my laptop the CPU usage is the same but the GPU usage drops to like 40-50% and the FPS gets better.