India records 9-year high power spot price of Rs16.48 per unit

New Delhi: Electricity spot prices in India continued to surge and registered a nine-year high, with the country also witnessing an all time high volume of electricity traded in the exchange market on Friday, due to higher demand from states such as Tamil Nadu, Andhra Pradesh, Telangana, Orissa, West Bengal, Assam, Gujarat and Maharashtra.

Prices touched ₹ 16.48 per unit for Saturday on the India Energy Exchange (IEX). The all-time high for electricity in the spot market was ₹ 17 per unit in April 2009, according to IEX. Prices have been on an upward trend in September.

IEX also registered an all time high volume of 306.28 million units (MUs) of electricity traded in the spot market on Friday for Saturday delivery. The previously registered all time high traded volume in the day-ahead market was 293.95 MUs on 28 September.

“The demand for electricity is high as there is low wind power generation in states such as Tamil Nadu. Also, the fuel shortage at some plants in eastern and western India and high agricultural demand in Maharashtra combined with a dry spell has contributed to this growth,” said a person aware of the development requesting anonymity.

According to IEX, the average price for this Friday trade for Thursday delivery is ₹ 10.7 per unit with 335 MUs of electricity being offered to be supplied on the exchange as compared with a demand for 363 MUs.

“The demand for power may further grow in October due to upcoming state assembly elections and the festival season,” added the person quoted above.

A power exchange functions on the lines of commodity exchanges and provides a platform for buyers, sellers and traders of electricity to enter into spot contracts for the same day, coming day, and on a weekly basis. 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.