Coal shortage drives spot power prices to record high of Rs 20 per unit

Price of power in the spot market touched an all-time high level of Rs 20/unit on Sunday as numerous coal-fired power plants across the country remained shut due to the short supply of fuel. On August 28, there was a massive power supply shortage of 77.7 million units (MU), compared to the shortage of 2.3 MU on the same day in 2020, and paucity of 18.9 MU shortage recorded on the corresponding day in 2019.

While the Rs 20/unit was discovered for one 15-minute time block on August 29, the average rate of power for the day at the Indian Energy Exchange was Rs 8.33/unit. The daily average spot power prices ranged between Rs 1.9/unit to Rs 3.8/unit in the first week of August, while in the second half of the month, it remained mostly above Rs 5/unit as coal supply issues became more prominent. Even supply from hydro power stations were less than expected, increasing demand from the spot market.