Coal crunch, low hydro & wind output led to high power tariff at IEX

New Delhi: Insufficient coal reserves at power plants and sudden decline in wind and hydro electricity generation led to spike in power tariff to Rs 15.37 per unit at Indian Energy Exchange (IEX), Power Secretary A K Bhalla said Friday.

"This is the time (in the year) when wind energy suddenly goes down and hydro also starts declining and that is where some constraints always come in,"

This time, the constraints are compounded as "we were not able to build coal stocks in power plants especially in northern India," Bhalla told reporters on the sidelines of a CII conference on power transmission.

These constraints lead to soaring of power tariff, though for a short duration of 15 minutes or half an hour.

Spot power price touched over nine-year high of Rs 15.37 per unit in day ahead market (DAM) on IEX for supply on Friday, mainly on account of higher demand. According to the IEX data, the previous high was recorded at Rs 17 per unit in August 2009.

Dispelling fears of further rise in power tariff, Bhalla said: "Energy transacted is not more than 4 per cent in the exchange. Largely, 90 per cent of the sale takes place on PPA prices which are very low. Coal loading has improved in last three days for power sector. It will definitely ease the situation. More than 90 per cent of the rakes are being given to power sector."

About coal imports, Bhalla said the total imports of coal have come down this year compared to last year.

According to an expert, power tariff surged due to dip in wind and hydro power generation during this time of the year. Also, incessant rains in September affected coal mining as well as supplies, leading to higher power price.

However, the expert said the situation indicates that coal stocks were not maintained properly at power plants.

Talking about new transmission plan, Bhalla said it is a prospective plan for five years.

"The Central Electricity Authority does it regularly. We have got it (transmission plan) approved two days back. It assesses needs all across the country based on growth projections and then suggests what should we do. We are working on distribution plan also," he said.

On the issue of revival of stressed power assets, he said it is a subject matter of the high-level committee formed for the purpose.