Traded power prices soar as rains falter

Delayed monsoon and a surge in demand for power has led to power prices on the Indian Energy Exchange (IEX), India’s first power trading platform, soaring to record levels.

With temperatures in Delhi soaring to about 44 degrees Celsius and the northern grid reeling under huge shortfall, IEX recorded a trading price as high as Rs 12.75 per kilowatt hour (and a minimum of Rs 9.5/ kwh) on Wednesday.

Jayant Deo, managing director and chief executive officer, IEX, said, “Because of severe heat wave in Delhi, Orissa and Bihar, the demand for power has soared up to 53,000 mw in the northern parts of the country.”

This increased demand has resulted in an increase in activity in the day-ahead market and a shoot-up in prices.

Private power generation and state distribution companies that have excess power are swarming the energy exchange to garner a share of the pie.

Deo said the number of traders touched 66 on Wednesday, which is a very high number.

“There have been times when IEX had witnessed prices as low as 13 paise and an average of Re 1 during rainy seasons, but currently power is being traded at a high of above Rs 10,” he said.

The main reason attributed to this is a delayed monsoon in the northern part and a fall in the water level due to which hydro power plants of National Hydro Power Corporation are not able to supply optimum power. 

The main reason attributed to this is a delayed monsoon in the northern part and a fall in the water level due to which hydro power plants of National Hydro Power Corporation are not able to supply optimum power.

Though NHPC could not be contacted for comment, it was known that most of the company’s plants in the north are running under capacity.

Deo said the demand is still much more than the supply. “Out of the total demand of 2200 mw in the day-ahead market, 900 mw was available on Wednesday,” he said.

IEX, which is completing one year of operation on June 27, 2009, is the first energy exchange of India. It is promoted by Financial Technologies (India) Ltd. State-owned Power Trading Corporation is the other promoter of IEX.

IEX is a platform for trading electricity where generators, distribution licencees and other power producers can bid and purchase units of electricity at the national level.