Power distribution firms are increasingly buying electricity from the open market to meet their shortfall, jacking up volumes at the power exchanges, after the Unscheduled Interchange (UI) rates went up sharply recently.
The central electricity regulatory commission (CERC) has increased the maximum UI rate by 50% with from September 17 after the Madras high court dismissed the Tamil Nadu discom?s petition against the regulator?s revised electricity grid code.
The revised code became effective on April 3 in the entire country except Tamil Nadu. But the regulator held back from notifying new UI rates because of the stay granted by the Madras high court to the Tamil Nadu against the revised code. The court cleared the matter on September 14.
?After the new UI rates have come into effect, discoms have become cautious about overdrawing from the grid and are instead buying power from the market,? CERC chairman Pramod Deo told FE.
The daily power trading volume at India Energy Exchange (IEX) has risen from 53127 MWh on September 16 to 76251 MWh on October 7, registering a 43% jump. IEX accounts for 95% power traded through exchanges in India. Power Exchange of India holds the balance share.
The maximum UI charge has gone up to R8 a unit from R12.22 a unit earlier, bringing down the UI volume to one-tenth, according to industry sources. The CERC narrowed the grid code from 49.5- 50.2 Hz to to 49.7-50.2 Hz with effect from April 3 this year. But subsequently the Tamil Nadu Generation and Distribution Company (Tangedco) secured a stay from the Madras high court against the new code. The utility had submitted before the court that complying with the revised code would add to the additional financial strain. The utility, has already run up accumulated losses of R40,000 crore.
Meanwhile, the recent nod for restructuring of state power sector loans is expected to further invigorate the power market. ?We feel that this ( debt recast scheme) will help revive the discoms,? said Rajesh K Mediratta, director, business development, IEX.
?It is going to increase volume of power traded through exchanges as well as bilateral arrangements,? said Anil Kumar Agrawal, CEO, NTPC Vidyut Vyapar Nigam.
