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Mint
25-05-2025
- Business
- Mint
Unseasonal rains, surplus supply send real-time power prices crashing on IEX
New Delhi: Power prices in the Real-Time Market (RTM) on the Indian Energy Exchange (IEX) hit record lows on Sunday, driven by a combination of unseasonal rains, thunderstorms that reduced demand, and a surge in electricity supply. On Sunday, RTM prices hovered around zero following overnight showers and thunderstorms in and around the Delhi-NCR region. On Thursday, the price for a single RTM block had dropped to an all-time low of 2 paise per unit before recovering. On a year-on-year basis, average RTM power prices have declined 22% to ₹3.69 per unit due to lower electricity consumption. Read this | Imported coal based power plants told to operate at full capacity till June 30 'Unseasonal rains and thunderstorms in May kept temperatures low, resulting in a 2% year-on-year decline in electricity consumption during May 1–21, 2025. At the same time, increased hydro, wind, and thermal generation created surplus availability, bringing down Real-Time Market prices to an average of ₹3.69/unit—a 22% YoY drop," said Rohit Bajaj, joint managing director, Indian Energy Exchange. The RTM allows power discoms and other entities to buy and sell electricity for immediate requirements, with physical delivery taking place one hour after market closure. It accounts for nearly 30% of the total electricity traded on the exchange. Lower temperatures have reduced the use of cooling appliances such as air conditioners. Peak power demand across the country fell to 215 GW on Saturday, 24 May, compared to 220 GW or more recorded earlier in the month. While the RTM is not large enough to directly impact household electricity bills immediately, sustained low prices may influence tariffs in the next fiscal year. 'Distribution companies (discoms) are required to inform the electricity regulator about their projected expenditure on power purchases from electricity exchanges. If they end up spending less than budgeted, the underspending is reflected in annual filings. This could prompt the regulator to revise tariffs downward in the next tariff order, potentially passing on the benefit to consumers," said an executive at a discom. However, he added, the RTM remains relatively small in scale, so its impact on overall power costs and tariffs is still limited. Read this | King Coal keeps its crown, with 100 GW more of thermal projects on way Power generators, meanwhile, are often compelled to supply electricity even when market prices are low. Withholding supply could mean missing opportunities to sell in upcoming time blocks when prices may be higher. Moreover, failing to deliver power after submitting bids can attract penalties under market regulations. Thermal power plants also face technical constraints in ramping generation up or down. Frequent output fluctuations can reduce efficiency and wear out equipment. To avoid such risks, generators often continue supplying power at a loss to maintain stable operations. The recent rains have also boosted hydropower generation, putting additional downward pressure on prices. Bajaj noted that RTM participants are using the low-price environment to their advantage by substituting costlier thermal generation with RTM purchases during solar hours, helping optimize costs and boosting market volumes. 'These trends underscore the growing importance of the RTM in giving discoms, open access consumers, and commercial and industrial (C&I) users the flexibility to procure power in near real-time and manage costs amid dynamic supply-demand conditions," he said. Also read | India eyes cheap oil to refill strategic reserves amid geopolitical turmoil In the near term, prices are expected to remain subdued due to forecasts of continued rainfall and thunderstorms in Delhi-NCR and other regions. The India Meteorological Department (IMD) has also projected an above-normal monsoon this year.
Indian Express
19-05-2025
- Business
- Indian Express
Power demand in May dips slightly as weather brings relief to grid managers
Power demand in the first half of May remained subdued as thunderstorms and rain tempered temperatures in India, with peak demand reaching 231 gigawatts (GW) between May 1 and 17—slightly below the 233 GW recorded in the same period last year. Forecasts of continued light rain and winds through May are expected to ease pressure on grid managers, who had anticipated significant shortages amid record demand. India consumed 82.1 billion units (BU) of electricity between May 1 and 17, slightly below the 83.8 BU recorded during the same period last year, according to data from the National Load Despatch Centre (NLDC). Peak demand this year was 231 GW on May 15, while the lowest—202 GW—was met on May 7. In comparison, peak demand last year touched 233 GW on May 6, with the lowest at 207 GW on May 12. Last year's peak demand of 250 GW was recorded on May 31. The subdued demand follows a modest 2.3 per cent year-on-year growth in April, attributed to a high base effect, according to ICRA. In January, the NLDC had flagged May and June as 'high-risk months' for power shortages, warning that unmet electricity demand could reach 15-20 GW, particularly during non-solar hours. However, rains and thunderstorms have kept temperatures low, which in turn has eased air-conditioner use and helped keep the power supply situation manageable so far. 'In May, we've been quite comfortable in terms of power availability and prices. The average market price for the first 13–14 days has been around Rs 4.40 per unit,' Rohit Bajaj, joint managing director at the Indian Energy Exchange (IEX), said. 'In fact, we've even seen prices dip to Rs 3 on some days, especially after sudden rains. On May 4, for instance, the price dropped to Rs 3.11. There were several days when prices stayed below Rs 4,' Bajaj added. With low demand, the grid is also relying less on thermal-based capacities compared to last year. The share of electricity generated from coal has been around 71 per cent in May so far, compared to 74 per cent last year. As a result, the share of wind and solar has increased from around 10 to 14 per cent. 'Green energy is definitely rising. We've seen strong participation, and on a year-on-year basis, volumes have nearly doubled. A significant amount of solar power is coming in during the daytime,' Bajaj said. Compared to a modest 4.2 per cent growth in power demand in 2024-25—attributed to an unfavorable base and a slowdown in economic activity—ICRA expects demand to rise by 5.5–6 per cent in 2025-26. However, a favorable monsoon could temper this growth. Peak demand for 2025-26 is projected to reach 270 GW. Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More
Mint
07-05-2025
- Business
- Mint
Cabinet approves fresh coal linkages to boost procurement and capacity addition by thermal plants amid high power demand
New Delhi: The cabinet committee on economic affairs (CCEA) on Wednesday approved fresh coal linkages in a revised SHAKTI policy to reduce import dependency and increase capacity addition by thermal power plants. The union cabinet also approved an academic and infrastructure capacity increase for five IITs (Indian Institute of Technology), upgradation of the National Scheme for Industrial Training Institute (ITI) and setting up of five National Centres of Excellence (NCOE) for Skilling as a centrally sponsored scheme. The new SHAKTI policy, which stands for Scheme for Harnessing and Allocating Koyala Transparently in India, will help thermal power generators procure coal for long-term use with some procedural easement compared with the previous iteration of the same policy. The policy, first announced in 2017, has been implemented in 2019 and 2023, before its latest revision on Wednesday. The new policy will allow thermal power generators to procure coal in two windows. The first window will be for coal linkages to central government generator companies and states at notified prices, while the second window will offer linkages to all generator companies at a premium above the notified price, a CCEA statement said, adding that state-run Coal India Ltd and Singareni Collieries Co. Ltd would receive directions to implement the policy. The new policy is also expected to reduce coal imports and may push the setting up of greenfield thermal power projects at pithead sites, a CCEA statement said. Pithead sites are those which are nearer to the coal source. "It (the new SHAKTI policy) will enable thermal capacity addition, reduce dependency on imported coal, and strengthen the country's energy self-reliance," said Rohit Bajaj, joint managing director, Indian Energy Exchange. "Further, allowing sale of un-requisitioned surplus power under PPAs in power markets will increase liquidity on exchanges and will present an opportunity for DISCOMs and C&I consumers to meet their demand efficiently and at competitive rates," he added. The CCEA's decision comes at a time when India's power demand has been hitting record-high levels for the past three years due to industrial revival after the pandemic as well as rising global temperatures. The peak power demand this year is expected to reach an all-time high of 270 gigawatt (GW) surpassing the previous high of 250GW registered on 30 May 2024. The cabinet on Wednesday also approved the infrastructure and academic expansion of five IITs in the country, with an outlay of with an outlay of over ₹ 11,800 crore over four years from FY26 to FY29. The plan is expected to increase the student strength in these five IITs—Tirupati, Palakkad, Bhilai, Jammu and Dharwad—by 6,500 in this period, the cabinet statement said. The cabinet also approved the creation of 130 professor-level faculty posts in these IITs, the statement said, adding that five new research parks will also be created to foster industry-academia collaboration. Cabinet also approved the National Scheme for Industrial Training Institute (ITI) and the creation of five COEs after an announcement was made in the budgets for FY25 and FY26, a press statement said. The total outlay for this would be ₹ ₹ 60,000 crore, with the centre financing half, states providing ₹ 20,000 crore, and industry providing ₹ 10,000 crore, as well as co-financing by multilateral banks such as Asian Development Bank and the World Bank, as per the statement. The scheme will upgrade 1,000 government ITIs aiming to skill 2 million youth over a five-year period, the statement said. "The financial assistance provided under various schemes in the past was suboptimal to meet the full upgradation needs of ITIs, particularly in addressing growing investment requirements for infrastructure upkeep, capacity expansion, and the introduction of capital-intensive, new-age trades," the statement said, adding that funding will now be on a need-based investment basis. For the first time, the upgradation of ITIs will also adopt an industry-led Special Purpose Vehicle (SPV) model, the statement said.
