Captive power producers face Covid-19 brunt as prices turn unviable
The Covid-19 pandemic, followed by lockdowns that hit industrial and commercial activities, has drastically curtailed operations of captive power producers. Companies are finding that sale price on the energy exchanges is not viable even as their own captive demand is minimal.
Some large industries, including steel and cement, rely on their own captive power capacities to ensure steady supply for critical processes. Some of these companies also sell part of the power generated to the energy exchanges.
Executives from Indian Energy Exchange (IEX), in July, pointed out that volumes from captive power plants went down drastically post March, in tandem with the traded prices. For the day ahead market, average market clearing price for August 15 was Rs 1.64 per unit (kilowatt/hour). Captive power (that trades between Rs 2 and Rs 2.35 per unit) sale on the exchanges is economically unviable.
