Power Prices Drop Below Rs 1 for Off-peak Demand Periods

Sparking a Fall in Prices Electricity rates are about 20% down from last year, as prices have dipped 50-80 paise per unit in areas with excess power generation
Electricity prices at power trading exchanges have dropped below . 1 for off-peak demand periods in areas ` with excess power generation.In some areas, prices have dipped to 50 paise per unit while at others it is hovering at around 80 paise per unit. Rates are about 20% down from last year.

This is due to the combined effect of less-than-anticipated demand growth, excess coal at thermal power plants and restrictions imposed by the National Load Despatch Centre on long-distance power transmission because of wintry conditions, according to India Energy Exchange executives.

Consumers could see a reduction in their tariffs but not many utilities are taking advantage of the price drop.

“A large number of power utilities are not active in participating in power trading even when prices dip to such low levels,“ said a senior power sector official. “They seem to be happy buying power from the generators with which they have signed power purchase agreements even if the price at which they are buying the power is higher than exchange prices.“

The recent trend suggests that prices have dipped for power generation in west and east India where there’s surplus electricity . Prices in north India have dropped as well but have stayed at about ` . 1.9 per unit, the average level at the exchange.

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