The real-time market of India Energy Exchange (IEX), the country’s largest power trading exchange platform, saw a significant correction last week, a development that would provide much-needed relief to policymakers. At a time when power shortages are occurring in various parts of the country due to shortage of thermal coal.
Electricity prices on the IEX platform have been significantly revised up to May 9-15. The average day-to-day market price for the period was Rs 5.41 per unit, while the average real-time market price was Rs 4.63 per unit. Just ten days ago, the average price of the exchange was around Rs 10.38 per unit.
In a statement shared with Business Today, the exchange said that this was possible due to various measures taken by the central government, including normal pre-monsoon rainfall in the southern state of Kerala.
In April, global gas and coal supply lines were affected by sudden changes from winter to summer, rapid economic recovery expected, and the Russia-Ukraine conflict, threatening Asia’s third-largest economy. Crisis in years.
“The biggest development was an 11 per cent year-on-year increase in electricity demand in April. Prices were higher due to significant increase in demand and constraint on supply, ”said Rohit Bajaj, Senior Vice President, Business Development, IEX. BT.
In response, the government canceled several passenger services of Indian Railways to facilitate transportation of coal to power plants and issued a directive to central and state producing stations to mix domestic supply with imported coal which has helped reduce electricity prices.
Hurricane Asnani caused heavy rainfall across the coastal states and increased demand for electricity across southern India, especially in the southern states, especially Karnataka, Tamil Nadu, Telangana and Andhra Pradesh, as well as increased wind power generation. As a result, the southern states have reduced their purchases through the IEX platform, which has resulted in price adjustments.
“Most distribution companies have failed to envision an economic return that would follow the Covid-19 epidemic and have not taken timely action. But when the demand suddenly revived, they could not manage it. In addition to increasing coal production, there is a need to focus on efficient supply of coal to forecast overall demand and avoid similar situations in the future, ”Bajaj recommended.
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