Weak monsoon causes rise in power rates; tariff crosses Rs.7/unit on most power exchanges
GOOD FOR RELIANCE POWER, CESC, ETC. KOLKATA | MUMBAI: Power rates in energy exchanges have surged above 7 per unit in most parts of the country and shot up to 12 per unit in the southern states as a weak monsoon has raised demand while electricity supply remains shaky because of fuel scarcity and uncertain hydropower generation.
The government maintains that the monsoon situation is not alarming and rainfall will revive in a week, but the prospects of El Nino, which leads to dry weather in India, have increased, according to a forecast on Tuesday by the Australian weather office, whose predictions about the adverse weather phenomenon are keenly tracked internationally.
If El Nino sets in, it would upset hydropower generation, which peaks seasonally in the main monsoon months of July and August, allowing coal-fired plants to undertake maintenance work.
The monsoon is already 31% in deficit, leading to a sharp fall in water level in reservoirs, delay in crop planting and power shortage.
The India Meteorological Department says the monsoon would be normal, although the threat of El Nino looms. "The chances of El Nino have increased. But it is more likely to happen after the four-month monsoon season ends.
However, there are still 30-35% chances that El Nino may strike in the latter half of the monsoon," DS Pai, head of IMD's long-range forecasting division, told ET.
Power rates have gone up in recent days, which have been exceptionally dry. The monsoon deficit widened from 23% on June 27 to 31% on July 1.
Rain deficit at 71% in North:
The seasonal shortfall is 71% in north and northwestern India, and 36% in central India. The prolonged dry spell is hurting the power situation. Jayant Deo, Managing Director and CEO of Indian Energy Exchange said the demandsupply situation had worsened due to the continued heat wave, helping peak hour prices rise to Rs 7 per unit.
In contrast, the normal cost of power generation from thermal coal varies just between Rs 2 and Rs 3 per unit. Deo said captive plants and independent power producers are benefiting from the rise in prices.
The government maintains that the monsoon situation is not alarming and rainfall will revive in a week, but the prospects of El Nino, which leads to dry weather in India, have increased, according to a forecast on Tuesday by the Australian weather office, whose predictions about the adverse weather phenomenon are keenly tracked internationally.
If El Nino sets in, it would upset hydropower generation, which peaks seasonally in the main monsoon months of July and August, allowing coal-fired plants to undertake maintenance work.
The monsoon is already 31% in deficit, leading to a sharp fall in water level in reservoirs, delay in crop planting and power shortage.
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| Reliance Power Ltd is trading way below its IPO price |
However, there are still 30-35% chances that El Nino may strike in the latter half of the monsoon," DS Pai, head of IMD's long-range forecasting division, told ET.
Power rates have gone up in recent days, which have been exceptionally dry. The monsoon deficit widened from 23% on June 27 to 31% on July 1.
Rain deficit at 71% in North:
The seasonal shortfall is 71% in north and northwestern India, and 36% in central India. The prolonged dry spell is hurting the power situation. Jayant Deo, Managing Director and CEO of Indian Energy Exchange said the demandsupply situation had worsened due to the continued heat wave, helping peak hour prices rise to Rs 7 per unit.
In contrast, the normal cost of power generation from thermal coal varies just between Rs 2 and Rs 3 per unit. Deo said captive plants and independent power producers are benefiting from the rise in prices.
Courtesy: Economic Times
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