Electricity spot prices may continue to rise in near term

New Delhi: With India bracing for a scorching summer, electricity spot prices will continue to surge in the near term, driven by both structural and seasonal reasons, Crisil Infrastructure Advisory said.

This comes against the backdrop of the India Meteorological Department’s summer temperature forecast of normal to above-normal and likely heat wave conditions over the core heat wave zone in India that spans 17 states—from Punjab in the north-west to coastal Andhra Pradesh in the south.

“The monthly market clearing price at the Indian Energy Exchange (IEX) has spiked 25% from Rs3.20 per unit in January this year to Rs3.97 in March, taking the average cost to Rs3.43. That’s a huge leap from the Rs2.50 average logged in the corresponding period of the past two fiscals. What’s more, monthly peak prices on power exchanges this year have averaged at Rs7.1, which is almost twice the levels in fiscal 2017,” the Crisil note said on Tuesday.

Published in Live Mint, 4th April, 2018