In the month of November 2018, the spot power price declined to ₹3.59 ($0.05)/kWh after soaring high in the past few months. The price of ₹3.59 ($0.05)/kWh is 1 percent higher than the spot power price of ₹3.55 (~$0.05)/kWh that was recorded in the same month last year.
In November 2018, the recorded spot power price was 40 percent less than the recorded spot power price of ₹5.94 (~$0.081)/kWh in October 2018. The decline was mainly on account of onset of winter leading to lower demand for power, especially in northern and western states of India. Also, the availability of coal with thermal power generators improved during the month.
Previously, Mercom reported that the inability to prepare for seasonal changes had led to high spot power prices and that the situation would change as coal mining would resume after the offset of monsoon.
According to the Indian Energy Exchange (IEX), “The all India peak demand touched 162 GW, an increase of 9 percent year-over-year (YoY) when compared to November 2017. The energy supplied at 100,547 MU in November 2018 saw an increase of 7 percent over 94,371 MU supplied in November 2017.One Nation, One Price was realized for 17 days.”
The day-ahead market (DAM) experienced transmission congestion of 3.3 percent mainly in the import towards southern region. On a daily average basis, 622 participants traded in the market during the month. DAM saw a trade of 3,404 MU registering decline of 3 percent on year-over-year basis. On a daily average basis, about 113 MU were traded on DAM.
The Term Ahead-Market (TAM) traded 170 MU in November 2018, registering 46 percent decline over November 2017.
Together, DAM and TAM traded 3,574 MU in November 2018, registering a 7 percent decline over 3,841 MU traded in November 2017.
A market insider told Mercom, “Coal issues are showing their impact on the market. Prices are not going down as generators are not directly selling on the exchange. Instead, generators are selling to DISCOMs who in turn are selling on the exchange. This results in twice the transmission cost and the result is a cost increase of around 60 paise per unit. Even the variable cost of electricity (thermal) is not going down as imported coal is not that cheap. In the winters demand in north and central and eastern India will go down, resulting in low demand. But if demand kicks in from Southern and Western India then the spot power prices won’t fall drastically”.
This article has been updated with a quote