AHMEDABAD: The prices on the power exchange crashed recently after Tata Power and Adani Power resumed their supply to Gujarat Urja Vikas Nigam Ltd (GUVNL), the state-owned electricity company. The prices on the exchange had skyrocketed over the past few weeks.
The companies are supplying power from their imported coal-fired thermal plants in Mundra, Kutch.
Both the companies recently agreed to supply power to GUVNL for a higher variable tariff of Rs 4.5 per unit on a short-term basis, said a senior state government official. In the power-purchase agreements with the companies, the tariff had been less than Rs 2.5 per unit.
While Tata Power last week agreed to supply 1,800MW to GUVNL, Adani Power Mundra Ltd (APMUL) began the supply of 1,200MW to the state-run electricity company from October 17, the official added.
This has led to the softening of prices on the Indian Energy Exchange (IEE), the country’s power trading platform.
“Tata Power is currently supplying about 1,000MW to the state and is in the process of ramping up this capacity to 1,800MW. APMUL has also started its supply,” said a GUVNL official. “This is a major factor that has contributed to the decline in prices on the power exchange.” The official said other factors that led to the fall in prices on the exchange are rains in Delhi and Haryana and a decline in the overall demand.
On October 14, GUVNL purchased about 4,000MW of power from the exchange for a weighted average cost of Rs 13.8 per unit.
“In comparison, on Monday, after Tata Power and Adani Power began supply of power of over 2,000MW, GUVNL’s purchase from the IEE went down to 1,800MW,” the official said. “Also, the weighted average price was only Rs 4.3 per unit.”
Tata Power, Adani Power, and Essar Power had been supplying about 4,000MW to GUVNL for which they have entered into power-purchase agreements. Essar Power shut down its 1,200MW Salaya power unit in March this year saying that the rising international coal prices have made the project unviable.
Over the past one-and-a-half months, Tata Power and Adani Power had discontinued their power supplies to GUVNL citing similar reasons.
But on Monday, an APMUL spokesperson said: “APMUL has agreed to supply 1200MW, which it was generating and supplying to grid to Gujarat, basis the agreement to specially help the state at this stage of their requirement.”
The spokesperson added: “Gujarat has sought supply on this special package till 5th Nov, which Mundra plant has offered in the national interest.”
The country is staring at a power crisis with a large number of thermal power plants across the country being shut down or working at lower capacities due to coal supply problems. So Gujarat, a power surplus state, has been forced to buy costly power from the exchange.
In October, the state’s power bill from the IEE shot up to Rs 1,650 crore for the first eighteen days. In comparison, GUVNL bought power worth Rs 1,035 crore from the exchange for all of September, according IEX data.
The arrangement with Tata Power and Adani Power is only till November 5 as the government is of the view that the power crisis will ease after Diwali due to demand dip, said government sources.
As for Essar Power, an official of the group refused to comment.
