Power prices at exchanges dip

Sanjay Jog / Mumbai January 05, 2010

Despite a fall in the electricity prices at 10 paisa per unit, there are very few buyers of power at the exchanges — Indian Energy Exchange (IEX) and Power Exchange India (PXI) — in day-ahead transactions. Distribution companies are managing the show due to an improved grid frequency, which is over 50 Hz.

Power distribution companies, also referred to as discoms, are purchasing power at the unscheduled interchange rate — a penal rate for overdrawing from the grid — which is between Re 1 and Rs 2 per unit.

The share of power traded on IEX and PXI is only 1-2 per cent of the total generated power in the country.

Prices of electricity on the power exchanges on a day-ahead basis fell further in the last two weeks. The average clearing price is Rs 2.41 a unit with a minimum of 10 paisa per unit in early morning hours — 12 midnight to 5 am. IEX daily trades 20 million units with a turnover of Rs 5 crore, while PXI’s daily transaction is of the order of 3 million units at Rs 1 crore.

IEX and PXI sources told Business Standard today: “In the past also, winter nights had witnessed a low demand scenario.

However, this season has seen a considerable load crash which pushed the prices to as low as 10 paisa per unit. On generation capacity during the last two years, there has been a capacity addition to the tune of 20,000 Mw and no considerable increase in the load pattern due to the economic slowdown. This has narrowed the peak demand-supply gap.”