In the first week of March, the market clearing price on the Indian Energy Exchange stood at ₹3.69 per unit, against ₹4.90 per unit last month, showed data on the exchange website.
On a year-on-year basis, the price in the real-time market for the first five days of March was ₹2.8 per unit or 57% lower.
“Sell-side liquidity on the exchange has surged by nearly 90% in the initial five days of March. This trend mirrors the scenario observed in February, where sell-side liquidity stood at approximately 50%. The surge in sell-side liquidity can be attributed to capacity additions, spurred by the rapid expansion of both thermal and renewable energy sources. In 2023 alone, nearly 7 GW of thermal capacity was installed, further contributing to this upward trend,” said an official with a power exchange.
Sell-side liquidity refers to the availability of securities—power, in this case— for sale in a market. According to data on the Power Exchange of India Ltd, the volume for sale or the sell bids on the exchange on Sunday stood at 3,501.50 MWh (megawatt hour), while the buy bids stood at just 275 MWh.
Similarly, over the past one week the sell bids on the Indian Energy Exchange stood at 2,763.85 GWh (gigawatt hour), while the total bids for purchase stood at 1,768.74 GWh.
On a month-on-month there has been increase in supplies. The sell bids on the IEX on Sunday stood at 376.12 GWh, while a month ago it was at 278.85 GWh.
Further, a relatively lower demand compared to the month-ago period with the winters fading away, is also likely to have helped ease the price. Data from the Grid Controller of India showed that the peak power demand on Saturday stood at about 212 GW, compared to nearly 217 GW on 9 February. The peak shortage also has declined to 495 on Saturday, 9 March from 856 GW on 9 February.
This ease in demand, however, is expected to be temporary as with the increase in temperatures going ahead, demand may go up. April-June is usually the high demand period and this year the peak power demand is expected to touch 260 GW, way above the record 243 GW hit last year.
The India Meteorological Department has said the country is likely to experience a warmer start to the summer season this year with El Nino conditions predicted to continue through the season. More heatwave days than normal are predicted in Telangana, Andhra Pradesh and north interior Karnataka, as also many parts of Maharashtra and Odisha.
With the current easing of demand and increase in domestic power production, the stock of coal at the domestic coal-based power plants stands at 46.5 million tonnes, which is adequate for these plants to operate for about 16 days.
The current adequacy of the fuel at thermal plants can be gauged from the fact that on 6 March, domestic coal based power plants received a total of 2.37 million tonnes of coal, against a requirement of 2.27 million tonnes.
However, anticipating a record demand in the summers, persistent logistical issues and declining hydro power generation in the current fiscal, the power ministry has already mandated imported coal based power plants to continue blending 6% imported coal till June.
Noting that India’s GDP is forecast to grow at 7.3% YoY in FY24, and the summer approaching, Arun Kailasan, research analyst with Geojit Financial Services, said the demand for power is expected to go up in the medium term.
Currently, the burden of meeting the energy requirements is on the thermal power plants, he said.
“However, we are pessimistic in the case of hydroelectric generation, which has seen a 29% y-o-y decline in February due to a 20% decline in reservoir levels. To compensate for this, the PLF (plant load factor) of coal-based and gas-based plants have increased by 317 bps YoY and 310 bps YoY, respectively,” Kailasan said.
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Published: 10 Mar 2024, 07:26 PM IST