Average spot power price drops 54% to two-year low at IEX

The average spot power price at Indian Energy Exchange (IEX) dropped 54 percent to a two-year low of Rs 2.71 per unit in October, compared to Rs 5.94 per unit in the same month last year mainly due to lower electricity demand, better coal supplies, and higher hydro generation. "The day-ahead market (DAM) traded 3,391 million units with average market clearing price at only Rs 2.71 per unit, lowest in the last two years," an IEX statement said.

The average market clearing price was down by 54 percent vis-a-vis price of Rs 5.94. per unit in October 2018 and 2 percent on the month on month basis, it said. The decline in prices was mainly on account of low demand for power, improved coal supply, and improved hydropower generation. The market continued to be attractive to both the distribution utilities as well as the open-access consumers in terms of price competitiveness and flexibility in power procurement, the IEX added.

All India peak demand at 164 GW in October 2019 declined 4 percent over demand of 171 GW in October 2018 and the energy (supply) met at 99 billion units declined 13 percent Y-o-Y (year on year) according to the NLDC (national load dispatch center) data. Extended monsoon was also one of the key reasons for the decline in the demand for power, it said.

In the DAM market, total monthly sell bids were 9,771 million units (MU) while buy bids were 3,923 MU. With sell-side liquidity at three times of the buy bids coupled with lower clearing prices, the market helped save on the high cost of power for Discoms as well as commercial & industrial consumers, it said. This trend is expected to continue in the coming months as well. One Nation One Price prevailed throughout the month, IEX claimed.

The term-ahead market (TAM) traded 439 MU in October 2019 almost at par with volume traded in the previous month. The distribution utilities leverage the market segment to manage the demand-supply variability close to real-time. The acceptance for TAM contracts especially the intra-day, daily, weekly contracts has been growing amongst the distribution companies. On October 30, the REC market at IEX saw a total trade of 4,48,765 (4.49 lakh) Renewable Energy Certificates (REC) comprising of 3,88,821 non-solar RECs and 59,944 Solar RECs.

The price for Non-Solar RECs (Issued after April 1, 2017) at Rs 1,650 increased 10 percent from Rs 1,500 in September 2019 and the price for Solar RECs at Rs 2,400 increased 7 percent in October 2019 from Rs 2,250 in September 2019. The increase in REC prices has mainly been due to shortfall on the REC inventory and has been continuing since March 2019, it added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)