Election-bound states plan for power
NEW DELHI : With demand for power soaring to record levels at the start of September, states headed for Assembly elections this year are ramping up efforts to increase coal and power purchases, even at high prices. Rajasthan Urja Vikas Nugam Ltd (RUVNL), the state-run power trading company of election-bound Rajasthan purchased 1,000 MW of power for ₹8.25-10 per kwh (unit) for September in short-term tenders, according to data from the DEEP portal. Similarly, for November, December 2023 and January 2024, RUVNL has tied up a total of 2,200 MW fo ₹6.25-7.2 per unit.
These prices are higher than current prices on the exchanges. The price in the day ahead market of the Indian Energy Exchange stands at ₹4.9 per unit. Rajasthan and Madhya Pradesh are likely to go for assembly elections shortly.
Experts suggest that states would look at procuring power along with more coal to meet the power demand and avoid having to enforce power cuts ahead of the elections. “Historically there have been instances that whenever there are elections, governments may not like to see power cuts. However, in the past few years, the deficit levels have come down," said Vikram Reddy V, vice president and sector head, corporate ratings, ICRA.
He noted that although demand has eased since growing to 16% in August, it is still 10% higher in September compared to the corresponding period last year. Further, power generating companies including state gencos are also increasing their imports in a bid to meet the shortfall in domestic coal or the lag caused by logistical delays, said people in the know. The Centre also last month mandated domestic coal-based power plants to blend 4% imported coal till March next year.
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