Spot power rates fall: Gencos’ plan to raise output likely to be hit

Spot power prices have dropped by half in the last one week on the India Energy Exchange from the highs of Rs 11 per unit, largely led by the likely onset of early monsoon in Kerala and other parts of India, and improvement of wind conditions in Tamil Nadu and Andhra Pradesh.

While this would be a relief to state discoms buying spot power, it could be a dampener for gencos, who have been asked by the power ministry to scale up coal imports and increase PLF. Profitable spot market sales were one of the incentives for imported coal-based power units apart from the promise of cost pass-through. After the power ministry asked gencos to import 10% of their coal requirement for blending purposes, the compliance has been low among power units.