Power demand has crossed the 1.50 lakh Mw level for the first time because of increased farm demand and reduced generation from hydel power stations as the monsoon recedes, pushing electricity prices on the Indian Energy Exchange (IEX) to a record.
According to data provided by the National Load Despatch Centre, which oversees electricity transmission, the total demand for power on September 15 touched 1.52 lakh Mw.
About 1.47 lakh Mw of this was met while there was a shortfall of 4,500 Mw. "Increased volumes were largely due to a surge in demand for power in Rajasthan, Punjab, Uttar Pradesh, Uttaranchal, Bihar, Chhattisgarh and Maharashtra where there has been an abrupt end of the monsoon, leading to increased temperatures and agricultural load," said Rajesh K Mediratta, director, IEX.
The average market clearing price rose to a new high of Rs 3.64 per unit on the exchange, up 32 per cent from Rs 2.74 in August. With the kharif season at its peak, farmers need power to irrigate land as the June-September monsoon tapers off. To be sure, there has been a late monsoon revival in some parts of the country.
"Increased demand has prompted idle power thermal capacities from independent power producers to light up their boilers," he said. "Independent producers that depend on domestic coal have been able to light up their boilers while the ones depending on imported coal will have to wait for a few weeks before they can cash in on the demand."
On September 15, the IEX spot power market saw a record trade of 137 million units for delivery the next day. September has seen demand surge with the 100 million unit level being crossed 11 times, including 10 days in a row starting September 6. The previous high was 131 million units traded on October 10, 2014.
September 15 saw buy bids of 178 million units and sell bids of 158 million units. The average daily volume this month has been 109 million units, another high for the spot power market.
"Demand for power is expected to remain around 1.5 lakh Mw level till agricultural demand persists. It is expected to remain till the end of September," said Mediratta.
Increased demand is good news for all thermal power producers that have been suffering from unused capacity, a senior power sector executive said. Capacity utilisation had dipped to 59 per cent in June, the lowest in several years, he said.
Several independent power producers and thermal generators without any power purchase agreements did not find it economic to keep their plants running.
A Coal India official said plants have the fuel they need to meet demand. "Coal availability at power plants is at comfortable level of 20 days hence increased demand will allow then to scale up generation and increased plant load factors," he said.
Source - ET