Warming up to the idea of more power this summer

Lot will depend on the discom's ability to source cheap power and pass on the same to consumers

Soaring temperatures might be giving discomfort, but power prices and supply position is likely to remain comfortable this summer. An analysis of past years’ data on prices coupled with increased renewable power generation and surplus supply hint at breezy power availability during peak summer months. 

This means, your power distribution company will be in sweet spot to make your hot months bearable. However, a lot would be riding on the discoms to source cheap power and pass on the same on the consumers. 

In the past three months the cumulative average power demand has remained in range of 1.37-1.4 lakh MW. “The demand has witnessed no major spike since September 2015, when it has gone up to 1.5 lakh MW. Even in May 2015, the maximum demand was 1.35lakh MW. Any unusual demand is unlikely to come though there would be lot of fluctuations,” said a senior power market executive. 

Fluctuations in power demand are likely to occur due to erratic weather conditions. Power experts also rule out any possibility of grid snags. Incremental power and peak demand balance during day time through gas and renewable energy would keep the grid is safe balance, said a sector expert. 

The current installed capacity in the country is 2.9 lakh MW running at a plant load factor of 60 per cent. With lot of room for meeting power demand, if its surges, the spot power prices are also likely to remain subdued. Power market expects the average power price to be around Rs 3 per unit. 

In March the average price was Rs 2.67 per unit and in April, till yet the price discovered was Rs 3.4 per unit. In April last year, the average price was Rs 3.8 per unit. It came down to Rs 3.4 per unit in May 2015 and Rs 3.8 per unit in June 2015. 

“Power supply position has improved in past year with no coal shortage, ramping up of renewable energy. So there is no shortage of power,” said a power sector executive. He though added discoms would have to make most of the situation to supply affordable power to its consumers. 

“It is a discoms friendly situation and we would have to see how much could be passed on to the consumer,” said a senior power sector analyst. 

With transmission woes also being eased, South could be looking at one of the better summers. By next month, Rajasthan, Gujarat and Tamil Nadu will have considerable wind power thereby improving power availability. Solar power is at an all time high of 5000 MW and gas based power has kick-started with cheap gas supply being made available. 

On the other hand, power availability being a function of discoms’ health, states such as UP, north-east states, Tamil Nadu, Haryana and Rajasthan would need to source cheaper power. Close to nine states are undergoing the discoms reform plan – UDAY to revive their financially ailing discoms. UDAY also entails procuring affordable power and taking up operational reforms to bring down losses and making available 24X7 power for all.