In May 2019, the spot power price rose to ₹3.34 (~$0.048)/kWh, making it the fourth consecutive month in 2019 in which spot power price has continued its rise.

In April 2019, the spot power price was ₹3.22 (~$0.0464)/kWh. Month over month, the spot power price rose by ₹0.12 (~$0.00173)/kWh. On a year over year basis however, the spot power price has declined by 29% with May 2018 recording ₹4.67/kWh.

According to the national load despatch center (NLDC) data, the pan India peak demand met during May 2019 reached a new high of 183 GW, registering 7% increase when compared with May 2018, in which it was 171 GW. This was also 6.2 GW more than the 176.8 GW of peak demand met in April 2019.

On an all India basis, the energy supply met was 118 billion units (BU) in May 2019, a 4% increase over 113 BU recorded in May 2018.

According to the Indian Energy Exchange (IEX), together the Day Ahead-Market (DAM) and Term Ahead-Market (TAM) traded 4,090 million units (MU); a 21% decline over 5,169 MU traded in May 2018, and also a 6% decline over 4,338 MU traded in April 2019.

The DAM experienced occasional transmission congestion in the import of power to the southern states, leading to a volume loss of 3.76 MU, representing 0.10% of the total volume traded in the DAM. One Nation, One Price was realized for 29 days during the month. On a daily average basis, 746 participants traded in the market during the month.

According to IEX, a total of 3,772 MU was traded in DAM in May 2019 compared to 4,005 MU traded in April 2019, marking a 6% decline on a month-over-month basis along with a 23% decline on a year-over-year basis. Among the key reasons for this decline in volume was that the availability from long term power sources was higher in May 2019.

The TAM traded 317 MU in May 2019, compared to 253 MU in May 2018 and 332 MU in April 2019, a 25% increase on a year over year basis, and 5% decline on a month-over-month basis.

Hydro, wind, solar, and coal generation availability were higher by 31%, 32%, 48%, and 2.5% respectively. Several imported coal projects were fully operational during the month, which was not the case last year. Therefore, higher availability from long-term power sources coupled with better domestic coal availability resulted in higher supply power in the market.

Commenting on the month over month increase in the power price, a market insider said, “On a year-over-year basis, there has been a massive decline, but yes, the price has been gradually increasing since February this year.”

Further elaborating, the source said, “Coal prices are high even though the supply is good, as coal e-auctions are less and on the energy exchanges the concentration of thermal power is at the maximum. Due to this, the price is not going to fall further beyond the ₹3 (~$0.04318)/kWh mark any time soon. What is required is an increase in the concentration of hydro, wind, solar, and other renewable energy sources on the exchanges and the power mix in general. This will result in the market leaning towards a source of power that only has a fixed cost and no variable cost like coal.”

Recently, the Central Electricity Regulatory Commission (CERC) fixed the national average power purchase cost at ₹3.60 (~$0.051)/kWh for open access for FY 2019-20.