Chennai: Spot power tariffs continued to rise in June despite coal prices declining 36 per cent and power demand growth moderating.
The average spot power tariffs in the day-ahead market (DAM) of the Indian Energy Exchange (IEX) rose to Rs 5.5 per unit in June, up from Rs 5.3 per unit in May.
However, in June, coal prices declined by 36 per cent YoY to $123/MT. Diesel prices als declined by 2 per cent YoY to Rs 88 /litre. In Q1 FY2025, the prices of coal and diesel were down 46 per cent and 2 per cent.
Meanwhile, power demand also moderated in June as monsoon started spreading across regions compared to a hotter May. Electricity demand grew by 7.8 per cent in June against 13.9 per cent in May. In April, the demand had grown by 10.7 per cent, finds ICRA.
According to ICRA, it was the decline in supply-side bids in the energy exchange that led to a rise in spot power tariffs. This could be attributed to the capacity outage in the thermal segment due to maintenance activity and instances of tripping.
Despite the lower prices, coal stock levels at power plants declined in June compared to May. However, they remained higher than June 2023. The coal stock levels at power plants declined to 16.2 days as on June 23, 2024, from 16.7 days as on May 31, 2024. This was due to the continued elevated demand from thermal generation in the summer season. While the stock level remained below the normative level, they are still better than a year ago. Earlier, the government had also extended the order to blend imported coal and operate imported coal-based plants until June 2024.
As per the data of global intelligence platform, Kpler, India’s June coal imports at 14.63 million metric tonnes, were down from 17.59 million metric tonnes a month earlier as the country has been boosting its domestic coal production in response to strong demand growth amid summer heat and growing industrial activity. Still, the June import total is higher than it was a year ago, when it stood at 13.43 million metric tonnes.
