In March 2019, the peak demand touched a high of 169 GW pushing power prices up. According to the Indian Energy Exchange (IEX), the all India peak demand touched 169 GW in March 2019, registering a 5% increase over the peak demand of 160 GW registered in the same month last year.
Peak demand registered in March was 7 GW more than the 162 GW registered in February 2019. On all India basis, the energy supplied in March 2019 was 110 billion units (BUs) an increase of 4% from 106 Bus supplied in March 2018. Compared to February 2019, the energy supplied was 15 BUs more.
The spot power price in March 2019 was ₹3.12 (~$0.0048)/kWh, a 22% decline year-over-year (YoY) compared to ₹4.02 (~$0.5772)/kWh in March 2018. Compared to February 2019, the spot power price went up by ₹0.04 (~$0.0005)/kWh.
A market insider informed that the spot power price went up as during the peak hours the demand increases drastically leading to sale constraint. During the peak, there’s more buying, and this drives up the average price.
Another major reason for the high power price is that most of the distribution companies (DISCOMs) first buy power at the exchange and then resell the same. While reselling, the transmission cost is built into the price which drives up the price, added the market insider.
The electricity market at IEX, Day Ahead Market (DAM) and Term Ahead Market (TAM) combined traded 3,602 MUs in March 2019 registering 25% increase over 2,879 MUs traded in Feb 2019 and a 12% decline YoY.
The DAM experienced transmission congestion mainly towards import of power by Southern states which led to volume loss of 120 MUs representing 3% of the total traded volume. The percentage of time congestion occurred was 35.6%.
When asked about the condition of the power supply, the market insider said, “The supply constraint that was experienced in the past few months has been resolved, but the demand has drastically increased. Once Southern demand eases after wind power comes into action by the end of April, the entire demand will go down, and we can expect prices to go down as even sellers will be willing to sell low as demand will be low.”
One Nation, One Price was realized only for three days in March 2019.
Image credit: Bajaj Electricals