Cold wave raises spot prices of electricity on IEX

After experiencing one of the warmest Decembers in recent history and higher-than-average temperatures in the first two weeks of January, North India faced a cold wave from January 16. While the temperatures dropped, electricity prices on the Indian Energy Exchange (IEX) surged.

On three occasions since January 16, spot prices of electricity on IEX for the northern region were higher than ₹4 an unit. The average prices in the North were higher than the South, where spot prices are usually the highest.

“Peak electricity demand in the North has been consistently higher over the last few days compared to the beginning of the month or even end of December.

For example, on January 22 peak electricity demand was 44,124 MW in the region while the demand two weeks ago, on January 8, was 40,931 MW,” an official of the Northern Region Load Despatch Centre said.

Coupled with the surge in demand has been the shutdown of five hydro-power plants due to planned annual maintenance and outages in three units with a total capacity of 1,370 MW, the official added.

Between January 16 and 25, the northern region bought 243.3 million units of electricity from IEX as a result of the lower supply.

In the 10 days prior to January 16, about 499.28 million units were bought.

Prices have begun to stabilise from Monday as additional supply hit the markets.

For January 25, 92 million units of electricity were bought and sold on the IEX as compared to an average of 80.3 million units between January 16 and 24.

For January 26, a national holiday, the price has tumbled to ₹1.85 a unit in the northern region, ₹1.87 in the south and ₹1.83 a unit in other parts of the country.

Typically, non-working days see lower demand for electricity.

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