Power demand falls in Sept 2019 vs last year

Demand for power declined in the spot market during September 2019 compared to the same month last year, according to numbers released by Indian Energy Exchange, the biggest power exchange in the country.

All India peak demand fell to 173 gigawatt from 175.6 gw in the same month last year.

Similarly, energy met fell by a substantial 5% to 105 billion units, the power exchange said, quoting data from the National Load Despatch Center, a government of India enterprise that is in charge of scheduling and despatch of electricity to various parts of the country.

As a result, electricity prices in the spot market remained under pressure during September.

The average clearing price of electricity in the ‘day ahead market’ of IEX fell to just Rs 2.77 per unit from Rs 4.69 per unit in the same month last year. This was also a decline of 16% compared to August of this year.

The development comes in the wake of an overall economic slowdown that has impacted both the sale and production of items such as automobiles, homes, cement, machinery and consumer durables.

IEX attributed the reduction in price to lower demand, improved coal supply, extended monsoon and improved hydro power generation.

The total monthly sell bids in the day ahead market were 8,570 million units, while the total buy bids were only 4,066 MU.

Total power traded during the month on the exchange was 3.92 billion units.

“The market continued to be favorably inclined to the buyers both the distribution utilities as well as the open access consumers in terms of price competitiveness as well as flexibility in power procurement,” IEX said.

Interestingly, there was more action in the ‘term-ahead’ market, in which companies sell power for the next term, instead of the next day.

A total of 736 MU were traded in the TAM in September ’19, compared to just 103 MU in September 18.

This was “on strength of increased participation by the distribution utilities who leverage the market segment to manage the demand-supply variability close to the real-time,” it said.

The exchange also provides a platform for the sale of renewable energy credits.

The price for Non-Solar RECs at Rs. 1,625 was higher by 8.33% over Aug’ 19, while the price of Solar RECs, at Rs. 2,250, was higher by 7.14% over price in August 19.

The increase in prices in REC market was mainly on account of shortfall on the inventory / supply side which has been persisting since March 2019,”the exchange said.

IEX is India’s first and largest energy exchange and offers an automated trading platform for physical delivery of electricity, Renewable Energy Certificates (RECs) and ESCerts or Energy Saving Certificates.