His Own Data Shows Sharp Rise in Spot Power Price, but Union Minister Says No Increase
Moneylife Digital Team 29 July 2021
Union power minister RK Singh on Thursday contradicted his own data. While replying to a question, the minister stated that there was no sharp rise in the average spot power, but data submitted by him in the Lok Sabha shows the opposite. 
 
Replying to a question, Mr Singh says, "It is not correct that there has been a sharp rise in the average spot power price from March 2020 to March 2021. In fact, the average price of power sold through the power exchanges declined from Rs3 per kilowatt-hour (kWh) in 2019-20 to Rs2.82 per kWh in 2020-21."
 
However, data shared by the minister in the annexure shows that the average spot power price increased to Rs4.07 per unit in March 2021 from Rs2.45 per unit in March 2020 and Rs2.42 unit in April last year. 
 
 
The data shared by the power minister shows average spot power price increased by 39.80% in March 2021 from March last year and 40.5% during FY20-21.
 
Thirumaavalavan Thol, a member of Parliament (MP) had asked the question about the sharp rise in average spot power price between March 2020 and March 2021 and whether it can be attributed to the input cost or manipulated to increase profit by the producers or traders.
 
In his written reply, Mr Singh, the minister, says, "The electricity price in the spot market is a function of demand and supply forces in the market which are in turn dependent on the overall macro-economic situation of the country. Electricity price, in the day ahead market (DAM) on the power exchanges, is discovered through market mechanism, like aggregate demand (total buy bids) and aggregate supply (total sell bids) and the bidding mechanism follows the double-sided closed bid auction on a day-ahead market."
 
"Over the fiscal year 2020-21, new market developments have been brought in such as introduction of real time market (RTM) to manage electricity requirements closer to real time, green term ahead market (G-TAM) to provide additional avenues to renewable energy (RE) generators and notification of the Central Electricity Regulatory Commission (CERC) power market regulations 2021 to cater to the increasing depth of the Indian power market and growing need for information exchange among market participants as well as to strengthen the mechanism for market surveillance and monitoring," the Union minister added.
 
According to data from Indian Energy Exchange (IEX), average spot power price rose by 65% Rs4.06 per unit in March 2021 compared with same month a year-ago. In a statement IEX says, “The DAM traded 6,549 million units (MU) volume recording a significant 65% year-on-year (y-o-y) growth. The average monthly price at Rs4.06 per unit during the month saw a 20% increase on month-on-month (m-o-m) basis." 
 
The Exchange attributed the jump in price the increase in demand for electricity during March due to sharp rise in temperature, revival of economic and commercial activities.
 
 
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