India’s energy planner, Central Electricity Regulatory Commission (CERC), has directed the power trading exchanges to continue capping electricity prices at INR 12/unit till 31 December, 2022.
The cap was implemented in order to curtail price volatility till 30 September, which has now been extended for three more months. This would be applied across market segments including the day-ahead market, real-time-market, intra-day, day-ahead contingency and term-ahead market.
It ought to be noted that the power exchanges provide a trading platform for physical delivery of electricity. However, in the wake of the increasing power supply-demand gap, spot prices have shot up sharply this year.
As per provisional data provided by Indian Energy Exchange, average spot prices on the day-ahead market increased by 80% y-o-y to INR 6.59/unit during April-September, 2022 as against INR 3.67/unit in April-September last year.
Robust power demand
CERC in its order has informed that the decision was taken with a view to protecting consumer interest in anticipation of higher power demand during winter.
It was highlighted that despite the fall in temperatures, high demand, particularly from households and industrial consumers, would continue over the next few months mainly due to the festive season and the pressure emanating from lighting and heating load.
Besides, the demand would be supported by agricultural load on account of harvesting of kharif crops and sowing of winter crops.
That apart, an expected downfall in hydro and wind-based power generation from October onwards might trigger fresh concerns as regards power supply.
The country has witnessed a steep rise in demand for power, and barring a slowdown in July-August, the consumption rate again posted a double-digit growth in September.
As per data provided by POSOCO, average power consumption increased by 11% y-o-y to 4.25 BU/day in September as against 3.82 BU/day in September 2021.
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