Coronavirus impact: Decline in merchant power prices to hit IPPs

The fall in prices of merchant power going following the rapid spread of coronavirus disease (Covid-19) is likely to impact Independent Power Producers (IPPs).

Spot prices of merchant power declined to as low as Rs 2 per unit during the Covid-19 lockdown, which was below the variable cost of power generation for most thermal power plants. As on April 13, average market clearing price (MCP) was at Rs 2.35 per unit.

“In view of muted demand, power plants continue to have higher inventory and will be in a position to declare higher plant availability which would allow them to recover fixed costs