October 8, 2021 3:45:58 am
A SHARP uptick in power demand and supply shortages from thermal plants has led to the spot power price rising nearly three times, compared to a month ago, on the India Energy Exchange (IEX) – the country’s largest power exchange. The price of one unit (kilowatt-hour) of power on the Day Ahead Market (DAM) hit a maximum of Rs 20 per and, with the average price surging to Rs 13.3 per unit on October 7 as compared to a maximum price of Rs 7 per unit and an average price of Rs 3.4 per unit a month back on September 7.
A source said the price rise was a function of much higher demand from discoms as a number of thermal power plants are facing a shortage in coal supplies. The total purchase bids for power on the IEX DAM on October 7 were for 4,43,023 Megawatt-hours (MWh), compared to sell bids of only 2,69,206 MWh. Total purchase bids a month ago on September 7 were far lower at 2,65,189 MWh while sell bids were 3,65,204 MWh.
The short-term power market accounted for about 10 per cent of the power procured in India in FY20, with 90 per cent being procured by power distribution companies through long-term contracts or through bilateral deals with energy traders.
“There is a significant increase in demand from Gujarat in the west, Haryana and Punjab in the north as well as Andhra Pradesh and Tamil Nadu in the south,” said a source, adding the precarious coal situation meant that power supply had not risen to match the demand.
Thermal power plants currently have an average of four days of coal stock against the recommended level of 14 days. The source said the supply was largely from merchant power producers or independent generators, with very few state utilities selling power on exchanges. “Even (the supply of) wind power is reducing as it usually falls in September and October. The demand in North India will likely dip in another 10 days,” the person said.
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