It's a grid manager's worst nightmare. An ongoing coal workers' strike has affected nearly 4,000 MW of thermal power capacity for a better part of September. Added to this is a loss of around 100 million units of hydro power due to the receding monsoon.
But southern States led by Andhra Pradesh have managed to avert a crisis thanks to two reasons. One, they are buying big on the power exchanges. Second, they are being helped by emergency supplies from private merchant stations, including Jaypee's Karcham Wangtoo, Sterlite's Jharsuguda and Lanco's Amarkantak.
So much so that despite the serious coal crisis and hydro shortage, Andhra Pradesh has now turned down the option of drawing expensive liquid fuel-based power from NTPC Ltd's Dadri project, sources involved in the exercise said.
Increased buying on the IEX — the country's largest exchange — has seen Andhra Pradesh's contracted power on the week-ahead market surge to above 400 MW in September, with roughly around 170 MW on an average being bought by the State in the day-ahead market.
As a result, spot electricity prices have moved up sharply as a result, with peak price in the day-ahead market on the IEX clocking in at well over Rs 7 a unit during the last few days against a peak rate of around Rs 4.5 in the preceding months.
The average price has not moved up much (from around Rs 2.7 a unit to Rs 3.5 since mid-September), suggesting that utilities are selectively buying at peak hours.
The upsurge comes after a period of continuous softening in merchant power prices even during the summer months, except for a brief period of three months from January to March, where southern region prices shot up due to pre-election buying frenzy among utilities.
Due to the ongoing strike in the Singareni Collieries, generation of power from coal-fired power stations of APGenco and NTPC Ltd has been severely affected. Apart from the two utilities, the coal firm also supplies to Maharashtra and Karnataka. The coal workers are participating in the general strike called by those demanding statehood to Telangana. The strike has been on since September 13.