Electricity prices heading north as mercury rises

The hot weather in most of India has led to a significant increase in electricity prices on the Indian Energy Exchange (IEX) and Power Exchange India (PXI). These are between Rs 6 and Rs 8 per unit.

These prices are also prevalent in the short-term power deals struck by various utilities in Maharashtra, Karnataka and Andhra. These states, in particular, are reeling under power shortages due to rise in demand and also because of outages.

An IEX official told Business Standard, “ Severe shortages are witnessed across the country, particularly southern India.The average daily sale bids till April 13 on IEX were 23 million units (MUs) & average daily buy bids were over 40 MUs. Adding to theses shortages, there was congestion witnessed in southern India, which further increased the prices there. The average clearing price for S1 region was Rs 6.21per unit, S2 region was Rs 6.31 per unit and for rest of India it was Rs. 5.91 per unit. The highest in an hour was Rs 10 per unit. The prices have shot up only during the last 5-6 days.”

The official admitted the unconstrained market clearing price had touched Rs 10 per unit, with an average market clearing price of Rs 8.02. PXI’s sell bids are at the level of 8 MUs, whereas buy bids are of the order of 15 MUs.

Further, MahaVitaran, which is a state-run distribution company in Maharashtra, is negotiating with various suppliers at the price ranging between Rs 6 and 8 per unit. MahaVitaran sources said it had to carry out a daily load shedding of over 3,500 MW. Andhra and Karnataka have a similar situation.