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Spike in power prices due to lower generation, higher demand

Mumbai: Short-term power prices increased to Rs 4.69 per unit in September mainly due to higher demand and lower generation from renewable energy sources, pushing up commercial power trading volume by 40 percent, says a report.

According to a report by India Ratings, in September short-term power prices rallied upwards to Rs 4.69 per unit against Rs 4.09 per unit a year-ago, driven by a higher demand, lower generation from wind capacities, and scanty rainfall and dry weather in some states.

To meet the short-term power requirement, 5,725 million units were traded on the Indian Energy Exchange in September, up 40 per cent last year. During the month, all-India energy requirements rose 7 percent and available energy increased 7.4 per cent y-o-y.

Power supply in the reporting month was met through higher hydro and thermal generation.

"Although generation from renewables also increased 53.6 per cent compared to last year, on account of an increase in installed capacity, generation declined, driven by lower generation from wind energy. Overall, the total power generation increased 8.7 per cent in September 2018 a year- ago," the report said.

The lower renewables generation coupled with no new capacity addition in the thermal space led to higher reliance on thermal power, which resulted in an increase in all-India plant load factor to 61.1 per cent in September against 60.7 per cent in the same month last year.

Thermal generation in September was supported by an increase in monthly coal production by Coal India to 40.2 million tonne. Coal inventory at power stations also improved 30.3 per cent.

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