Power prices on exchanges rise as soaring temperatures lift demand
₹5.8 per unit on the Indian Energy Exchange (IEX), up from ₹4.6 a month earlier. Last week, prices had touched ₹6.7 per unit. In April, the exchange saw 9,044 million units traded, 14.1% more than a year earlier.
Peak power demand rose from 201 GW at the end of March to 224 GW on 30 April, data from Grid Controller of India showed. The Central Electricity Authority (CEA) expects it to touch a record 260 GW this year, amid rising cooling demand in a blistering summer. The India Meteorological Department (IMD) on Wednesday said that the ongoing heatwave would continue in the next few days.
Sabyasachi Majumdar, senior director at CareEdge Ratings said: "In case of stable economic growth, power demand in the country is expected to grow at the rate of 6-6.5% in FY25. However, aberrant weather conditions such as poor monsoon, extremely hot summer or cold winters can create spikes in demand." Thermal power companies have sufficient coal stocks to meet demand, unlike the situation a couple of years ago when stocks had dwindled. However, rising demand spells financial strain for power distribution companies, which are forced to buy extra power at higher costs from exchanges, but cannot increase tariffs accordingly.
IEX data also showed more buyers clamouring for power. On Thursday, purchase bids crossed sell bids, reversing the trend from a month ago. On Thursday, purchase bids stood at 266,624.12 MWh while sell bids were 229,535.53 MWh.
On 2 April, purchase bids were lower at 232,659.82 MWh, while 271,554.83 MWh of power was up for sale. "Prices have been rising on the exchanges and today they were around ₹5.76 per unit and they will rise further as the demand grows. Gencos are prepared as government has directed them to make
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