With a heat wave gripping the country– the northern states are reeling with temperatures of 44-46 degrees Celsius — the demand for electricity has soared to a record high. On Wednesday, India recorded a cumulative power demand of 170,121 Mw, which is around 8 percent higher than the same month last year.
Northern and western states had the highest power demand, with Uttar Pradesh sourcing 19,082 Mw, Delhi 6,029 Mw, Rajasthan 10,395 Mw, Gujarat 16,825 Mw, and Maharashtra 23,609 Mw. Leaving Jammu & Kashmir, Assam and Uttrakhand, none of the states faced any shortage in required power supply.
For Delhi, 6,000 Mw is a record high. In order to meet the stipulated demand, power distribution companies (discoms) in Delhi have tied up with various states through power purchase agreements (PPAs).
Reliance Infra’s BSES, for instance, has signed long-term PPAs with Himachal Pradesh, Uttar Pradesh, Andhra Pradesh, Sikkim and a hydropower banking arrangement with Bhutan.
The other discom, Tata Power-DDL, had exported power up to 300 Mw to the states of Jammu & Kashmir, Himachal Pradesh, Madhya Pradesh and Andhra Pradesh during the winter of 2017-18 under banking arrangements. The same power shall now be returned by these states to Tata Power-DDL in the summer of 2018, said the company.
According to the latest Load Generation Balancing report of Central Electricity Authority (CEA), power supply during this financial year is expected to be surplus, by 8.8 percent in energy terms and by 6.8 percent in peak terms, with peak demand at around 169 Gw.
Now that power demand is increasing, the lack of long-term power purchase agreements (PPAs) could be a problem. Nevertheless, most states are meeting the peak demand (power demand over & above the nominal demand) through the short-term market.
As temperatures soared during the week, spot power prices increased to Rs 11 per unit, averaging at around Rs 5 per unit.
Power trading platform India Energy Exchange (IEX) witnessed a record high short-term power trading of 190 million units on Tuesday. The agency expects the demand to continue throughout the summers.
At the same time, coal stock position at power plants is at the low-level of 12 days’ inventory. Hydropower share in the total energy mix has been coming down every year. A hydro generation stands at 365 Mw currently, slightly higher than this month last year. In 2017, the highest hydropower generation was 550 Mw in July, which is expected to be lower during monsoon months.
Most of the states would take the short-term route to procure power, leading to a spike in prices, said a power market expert. He added that states continue to be unwilling to sign long-term PPAs and the sick state of most thermal plants has added to their pain.
News Source: Business Standard