Coal shortage leads to jump in power prices on energy exchanges

Tangedco buys about 2,500 MW electricity from the exchanges

Updated - September 06, 2021 02:08 am IST

Published - September 06, 2021 01:49 am IST - CHENNAI

CHENNAI, 28/02/2019: The power transmission and distribution lines in Chennai on February 28, 2019. Photo: B. Velankanni Raj / The Hindu

CHENNAI, 28/02/2019: The power transmission and distribution lines in Chennai on February 28, 2019. Photo: B. Velankanni Raj / The Hindu

The coal shortage among thermal power plants across the country has led to a surge in spot market prices in power exchanges. Tangedco buys about 2,500 MW power from the exchanges to meet its peak demand needs.

The trading in power exchanges happen in 15 minute blocks and prices keep changing based on the demand.

According to data available the on Indian Energy Exchange website, from September 1 to 5, the spot power prices in the region, comprising Tamil Nadu and Puducherry, were over ₹8-₹9 per unit during evening hours in some of blocks.

For this period, the daily average price for the evening hours was nearly ₹5 per unit. In the comparable period in September 2020, the daily average price for evening hours was only ₹3.98 per unit.

Tangedco’s own thermal power plant capacity is 4320 MW. According to official data from the Central Electricity Authority (CEA), as on September 3, the North Chennai thermal plant, which has a capacity of 1,830 MW, has coal stock for 23 days. The Mettur Power Stations I and II, which have a total capacity of 1,440 MW, have coal stock for two and 13 days respectively. The Tuticorin thermal plant, which has a capacity of 1,050 MW, has coal stock for seven days.

Coal stock

As per CEA norms, the coal stock is at critical levels if it is less than seven days and supercritical if it is less than four days.

The Indian Energy Exchange has said growth in economic and industrial activities had led to the increase in demand for power on the one hand; on the other, the supply side constraints, such as high cost of imported coal and LNG as well as lower wind power generation, led to the increase in the electricity prices discovered on the exchange.

Tamil Nadu has aggregate installed power generation capacity of 32,646 MW, including wind and solar capacity of 13,128 MW. The maximum availability of power during peak requirement is only 1,4351 MW as against the peak demand of 16,846 MW, according to data provided by the State government.

The Centre has told the States to look at import of coal to meet the requirements for thermal plants and explore the possibility of operating more gas-based plants during the peak hour to tide over the crisis.

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