In July 2019, the spot power prices witnessed a surge, rising to ₹3.38 (~$0.048)/kWh. This was a 15% increase month-over-month (MoM) when compared to June 2019, in which spot power price was recorded to be ₹3.32 (~$0.047)/kWh.

Before June 2019, spot power prices had soared high for four consecutive months in 2019.

According to the national load despatch center (NLDC) data, the pan India peak demand met during July 2019 touched 175 GW, registering a 4% increase year-over-year (YoY) while the power demand met stood at 117 billion units (BU), an increase of 6% YoY.

According to the Indian Energy Exchange (IEX), the day-ahead market (DAM) alone saw an increase of 19% YoY while the term-ahead market (TAM),  clocked a 290% increase in YoY basis. The Term Ahead Market is leveraged by the distribution companies (DISCOMs) to manage the demand-supply variability, especially with the high renewable energy concentration in the grid.

In July 2019, DAM and TAM had traded 5,271 million units (MU) together, an increase of 705 MU compared to the 4,566 MU traded in June 2019. According to the IEX, the low price coupled with greater certainty and predictability in procurement continue to make a compelling proposition for the DISCOMs as well as open access consumers to step up their procurement through the exchange.

‘One Nation, One Price’ was realized on all days of the month.

When contacted, an industry source informed that the surge in spot power price is negligent. “In MoM and YoY comparison, there’s not even a 2% deviation upward or downward,” he said.

The source further added that the demand is shifting back to the exchange. “Due to the recently-concluded elections, a lot of demand had been taken up by the entities for bilateral agreements for power supply as they had been asked to assure power to citizens,” he said.

The energy expert also informed that there’s a negligent amount of renewable energy (wind, solar) in the DAM as of now and it needs to go up.

Image credit: Bajaj Electricals