Power tariff soars to a decade high of Rs 18/unit in spot market

Power tariff touched a decade high of Rs 18 per unit in the spot market on Tuesday due to low hydro and wind energy production and coal shortage at thermal plants.

"Spot power price for supply on Wednesday touched 10-year high of Rs 18 per unit in spot trading on Indian Energy Exchange (IEX) on Tuesday. The average spot power price was also high at Rs 7.12 per unit at IEX on Tuesday," a source said.

The power price have seen an upward trend in the day ahead market (DAM) at IEX since September 23 when it touched to a high of Rs 14.09 per unit. The prices soared further to hit a nine-year high of Rs 16.49 per unit in the day ahead market on September 28. The spot power rate touched another high of Rs 17.61 per unit in trading at IEX on Sunday for supply on Monday.

According to the IEX data, the previous high was recorded at Rs 17 per unit in August 2009.

A total of 274 MU (million units) were sold for supply on Wednesday. In the DAM trading session concluded Tuesday at IEX, there were buy bids for 312cMU against sell bids for 322 MU.

Power Secretary A K Bhalla last week said that around this time of the year wind energy suddenly goes down and hydro also starts declining that is where some constraints always come in.

"We were not able to build coal stocks in power plants especially in northern states," he had said.

The source said captive power plants (CPPs) were grappling with the issue of coal shortage and were unable to meet the in-house demand of industries like steel, aluminium and cement, forcing them to buy power from the exchange. 

CPPs generate electricity for their own manufacturing facilities like steel, cement and others.

According to the Central Electricity Authority data, as many as 19 thermal plants had coal stocks of less than seven days of consumption as on September 27.

Last Thursday, Power Minister R K Singh had asked state power generators like NTPC and DVC to strengthen their coal mining wing and secure more coal mines noting that supply of the dry fuel to power plants was still a concern.