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Home News Power Sector News On Diwali eve, spot power rate touches Rs.10.80 - 3-year high

On Diwali eve, spot power rate touches Rs.10.80 - 3-year high

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IEXPeak-hour spot power price has shot up to Rs 10.80 a unit, a three-yearhigh, for October 17's Day Ahead Market (DAM) on the Indian Energy Exchange (IEX), putting financial burden on states seeking to meet spiking Diwali demand.
IEX data for October 16's DAM showed buyers outnumbering sellers and Vidyut Pravah, the power ministry's dashboard, displayed no surplus. The average market clearing price (MCP) stood at Rs 5.14 a unit against Rs 4 even a week ago. Spot prices have been increasing since August when MCP stood at Rs 3.13 per unit, or 26 per cent higher than the July price of Rs 2.49, and 44 per cent higher than Rs 2.17 per unit in August 2016.


These indicate a widening supply-demand gap. Industry players said supplies have fallen due to several factors. Lower production from hydel and nuclear power stations as well as the domino effect of disruption in coal supplies due to unprecedented rains and closure of an eastern rail link.

In the August-September period, nuclear generation fell 36 per cent, wind 14 per cent and hydel 12 per cent. Supplies from Bhutan also dropped. Naturally, demand automatically shifted to coal-fired plants. Central Electricity Authority data shows 17 per cent growth in thermal generation as plants operated at 58 per cent of capacity against 51.59 per cent in August 2016.
As thermal plants stepped up operations, coal demand increased by 20 million tonne.Coal India has raised dispatch by 21 per cent but still it is proving inadequate. TOI had on August 26 first reported that ironically, the genesis of the problem lay in the improvements in supply situation brought about by the NDA government. As TOI first reported on February 22, power stations drew down coal stockpiles by 50 per cent to reduce inventory costs as timely supply became the new normal. Total stockpile at plants reached 39 million tonnes at the beginning of 2016-17, with several plants showing coal stock for 50-60 days, with average stock exceeding 25 days.
Just when stocks were pared to about 11days and less, the summer demand spiked and coal supplies got disrupted. Even as coal supplies are rising, the switching of load from other sources appears to have put thermal power station back to square one.

 

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