The power cuts you are facing this summer may not be entirely due to a shortage of supply. On most days over the last week,electricity went unsold on Indias two operational power exchanges,even as most states resorted to massive loadshedding.
Sell bids on IEX,the larger electricity bourse,have been higher than purchase bids through much of the second week of June. Hence,the usual alibi of distribution utilities that no power is available may not be good enough.
The lop-sided demand supply equation is reflected in prices which,during the first two weeks of June,have been hovering under Rs 3 per unit (kWh) on average,barring a minor surge in spot prices seen around the middle of the month (partly due to heavy demand from Haryana on account of unscheduled outages at two of their stations). The average price was well over Rs 5 per unit at this time last year,and touched a peak of over Rs 12.
The reason for this situation is that state electricity boards are not willing to buy electricity at any price higher than Rs 4 per unit to supply to customers even though industrial and commercial units across the country are forced to run diesel captive units that produce electricity at upwards of Rs 10-12 per unit to tide over the shortage.
Even on Friday,when temperatures across most of northern and central India were well over 40 degrees Celsius,the peak price on the IEX (for deliveries on June 22) was just Rs 4.04 per unit,and the average price was Rs 3.11 per unit.
The only exception to this trend,IEX officials said,were industrial users in sharply deficient southern states like Tamil Nadu,who are buying actively on the exchanges. In the north,the SEB of Punjab has started to buy power to run tubewells for pre-monsoon sowing.
Market players said some distribution utilities are seeking to project a power crisis,even though enough power is available on the bourses round the clock. Utilities often pass off routine faults as power shortage. Also,transactions on the bourses require payments in cash,something SEBs are desperately short of.
Most distribution utilities restrict supply to segments that are not economically viable,such as the agricultural load. So even if power is available,they prefer not to offer round-the-clock supply to agricultural consumers. Domestic supply to rural areas too is restricted.
The short-term power market,involving trades spanning a timeframe of one year,comprises only around 10 per cent of the total energy generated in the country. This includes transactions on the exchanges and over-the-counter deals,or trades that happen outside the PXs on a bilateral basis between utilities or through intermediaries such as power traders.