Power prices in spot market spike on low hydro and nuclear power generation
The Indian Energy Exchange (IEX), an electronic power trading exchange, saw spot electricity prices going up as high as Rs 9.38 per unit on September 12 for the peak slot of 8 pm.
A fall in hydro power generation due to low rainfall in southern and western states, coupled with the hot weather prevailing in some parts of the country, has resulted in a spike in electricity demand from state-owned power distributors.
There was an 18 million-unit-drop in hydro power generation, from 541 mu on August 11 to 523 mu on September 11, Financial Express reported.
Nuclear power generation also saw a drop of 36 percent as a 1,000 MW unit of the 6,000 MW Kudankulam nuclear power plant in Tamil Nadu has been shut for maintenance since August 4.
The Indian Energy Exchange (IEX), an electronic power trading exchange, saw spot electricity prices going up as high as Rs 9.38 per unit on September 12 for the peak slot of 8 pm – a jump of 200 percent from the average Rs 3.13 per unit in August.
The exchange on Wednesday saw a new record trade of 183 million units (MUs) for delivery on Thursday.
FE also reported that Telangana discoms, which used to purchase 10-15 mu of power on the electricity exchange until recently, bought 40 mu on Wednesday. Average per unit prices on the power exchange rose 30 percent in a week to Rs 5.14 per unit on Wednesday.
Ravi Uppal, MD & CEO of Jindal Steel and Power, told CNBC-TV18 on Wednesday that plant utilisation at coal-fired stations had risen to 58 percent in August as compared to 51.6 in the corresponding period a year ago. He added that the demand for power is currently exceeding the supply available with power producers.
Private power producers who have not been able to sign long-term power purchase agreements with state discoms and have been plagued by low merchant power prices, have now seen their plant load factor (PLF) level going up to 50 percent from the 43 percent recorded in last quarter.Pick-up in economic activity, and coal inventories at power plants dropping to as low as 3 days' worth, are aiding prices to remain firm.