As peak power demand season begins, Uttarakhand to buy 200 MW power for ₹7-12/unit

Rishi Ranjan Kala | | Updated on: Apr 08, 2022
An engineer inspects a turbine under maintenance in the Vishnuprayag hydroelectric plant, operated by Jaiprakash Power Ventures Ltd., in Chamoli district, Uttarakhand. Photographer: Prashanth Vishwanathan/Bloomberg

An engineer inspects a turbine under maintenance in the Vishnuprayag hydroelectric plant, operated by Jaiprakash Power Ventures Ltd., in Chamoli district, Uttarakhand. Photographer: Prashanth Vishwanathan/Bloomberg

Due to strained coal supplies at power plants, lower coal imports, and gas-based plants running at 20 per cent capacity, power prices can even move up further

New Delhi, April 8 Uttarakhand will purchase 200 megawatt (MW) of round-the-clock (RTC) power from Gencos for a period of 12 months, beginning April, in the price range of ₹7-12 per unit, an indication that electricity prices are heading north on account of high demand amidst low supply.

On March 24 this year, the Uttarakhand Power Corporation (UPCL) floated an e-tender for purchasing 200 MW RTC power under a short term open access arrangement for a 12-month period from April 2022 to March 2023. The last date of submission of bids was April 1 and the bids were opened on April 4.

While the rates for peak summer months of April, May and June 2022 was ₹12 per unit, the discovered price for July 2022 is ₹9.4 a unit. Similarly, the discovered price for the months of August, September and October is in range of ₹10.44-10.6 a unit. From November 2022 to March 2023, the discovered price is in range of ₹8.27-9.03 per unit.

Generally, states procure power ahead of the peak demand season in summer and the monsoon months to meet their requirements. Sources said that this year with strained coal supplies at power plants, lower coal imports by plants, and gas-based plants running on 20 per cent capacity indicate higher demand that may force many States to buy power even at higher prices.

High price

Uttarakhand is purchasing the power at high prices, which can be analysed from the Central Electricity Regulatory Commission’s (CERC) Average Power Purchase Cost (APPC). The APPC rate for Uttarakhand for FY21 was ₹3.45 per unit, which was based on an estimated purchase of 13.67 billion units of electricity (non-RE) for ₹4,681.58 crore.

According to CERC, APPC is the ‘Pooled Cost of Purchase’, which means the weighted average pooled price at which the distribution licensee has purchased the electricity including cost of self generation, if any, in the previous year from all the energy suppliers long-term and short-term, but excluding those based on renewable energy sources.

Besides, as per the Merit Order Despatch of Electricity for Rejuvenation of Income and Transparency (MERIT) portal, the marginal cost of producing electricity in the hilly state is ₹3.38 per unit as of April 6, while the weighted average cost is ₹1.59 a unit.

This also comes at a time when the government has expressed concerns over the high price of purchasing power from exchanges. On March 26, the Power Ministry in a communication to the CERC talked about the high volatility in spot markets and the need to check it. Subsequently, CERC, on April 1, directed power trading exchanges to cap the price ceiling at ₹12 per kWh from the mandated ₹20 per kWh.

Power scenario

As on April 7, against a monitored capacity of 4,305.35 MW, Uttarakhand produced 35.93 million unts (MU) electricity on the same day. For the April 1-7 period, the State’s production stood at 243.37 MU.

Uttarakhand has a total installed power capacity of 5,212.03 MW. It has a thermal installed capacity of 450 MW (gas-based). The hilly state also has 3,855.35 MW of installed hydro power capacity with the State’s share at 1,252.15 MW, Centre (1,774.20 MW) and private sector (829 MW).

The total solar and wind installed capacity of Uttarakhand is 906.68 MW, which includes the State’s share of 67.87 MW and 838.81 MW capacity with the private sector.

Published on April 08, 2022
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