New Delhi: Electricity spot prices in India fell from a eight-year high because of lower demand on account of change in weather and more plants coming online. Prices dropped to 9.50 per unit for Wednesday from 14.08 per unit for Tuesday on the India Energy Exchange (IEX).

The Tuesday price was the highest since April 2010 when spot prices rose to 13.90 per unit. The all-time high for electricity in the spot market was 17 per unit in April 2009, according to IEX. The average and maximum spot prices have been increasing since September.

According to IEX, the average price for Wednesday is 5.28 per unit as compared to 6.53 per unit on Tuesday; with 237 million units (MUs) of electricity being offered to be supplied on the exchange as compared with a demand for 236 MUs.

Given the weather system developing over Southern India, states such as Telangana which was a buyer didn’t evince any interest in buying electricity, according to Rajesh Kumar Mediratta, director, business development at IEX.

According to the India Meteorological Department (IMD), under the influence of a low pressure system, fairly widespread to widespread rainfall activity with thunderstorms and lightning are very likely over West Bengal and Odisha during 19 to 21 September. The weather system that developed over Bay of Bengal will move over Coastal Andhra Pradesh during 18 -21 September; Chhattisgarh and Telangana on 20-21 September; over Madhya Pradesh on 21-22 September and over parts of Northwest India on 22-23 September.

Of about 1,200 billion units (BU) of electricity generated in India, the short-term market comprises about 130-150BU. This trade volume has grown by about 10% annually and is currently valued at about 22,124 crore.

India’s power demand is expected to grow with the government’s focus of providing “24x7 clean and affordable power for all" by March 2019. Also, the government is working on an ambitious plan to provide induction stoves to poor households. Also, the 16,320 crore Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), launched last year to provide electricity connections to more than 40 million families by December 2018, will require an additional 28,000MW of power, considering an average load of 1 kilowatt (kW) per household for eight hours in a day.