Power Prices Spike To Rs 9.91 In Spot Market; Unlikely To Be Sustained

Power Prices Spike To Rs 9.91 In Spot Market; Unlikely To Be Sustained

The power supply prices in the spot market recently witnessed a sharp rise, jumping from Rs 3.12/kwh in August 2017 and Rs 4.11/kwh in September 2017 to Rs 9.91/kwh last week on 13 September in one time interval of 15 minutes time block.

Even the average price on India Electricity Exchange (IEX) rose to Rs 5 per unit on low electricity supply, which is higher than the long term agreement prices for both coal and renewable across states. With spot market witnessing this high for about a week now, the trend is unlikely to sustain according to ICRA.

“The current increase in spot prices has been driven by a demand up-tick with 5.4 per cent growth in April-August 2017. This growth was largely supported by a better demand in few states like Uttar Pradesh (15.5 per cent), Telangana (12.3 per cent), Maharashtra (9.5 per cent), Andhra Pradesh (7 per cent) and Karnataka (5.8 per cent),” says Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings.

He says that this spike is likely to be temporary and unlikely to be sustained given the still moderate demand, albeit encouraging, growth and surplus thermal capacity available to meet energy demand. Read More…

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