Power Market Analysis: June13

DAM SEES SIGNIFICANT FALL IN PRICES

The day-ahead power market at IEX in the month of June 2013 continued to remain attractive in terms of price for the buyers. On an overall basis in terms of volume of power traded, the market saw northern and southern regions as the net buyers of power while the eastern, western and the northeastern region were the net sellers of power. The load generation balance report (LGBR) for the FY 2013-14 released by CEA a few weeks back anticipated the gap between availability of energy and requirement in the month of June13 to be to the tune of 7009 MUs at all India level, with only western and eastern region meeting their energy demands. The larger trend in the Day-ahead Market at the exchange was however on the contrary where the sell bids far exceeded the buy bids. Total purchase bids received in the DAM for the month of June13 was close to 2578.3 MUs and the total sale bids were over 4191.5 MUs, indicating a surplus in the market. Area wise total cleared sell and buy volume in the DAM is represented in the table below with respective anticipated energy gap as per CEAs LGBR.
Region Anticipated Energy Deficit/Surplus* (MUs) -3316 -4450 709 97 -49 -7009 Deficit/Surplus (%)* -10.50% -17.80% 7% 0.40% -4.80% -7.8% Total Buy in DAM (MUs) 858.57 596.28 8.84 619.36 31.52 2114.57 Total Sell in DAM (MUs) 852.04 353.58 197.98 637.08 73.88 2114.57 Net

Northern Southern Eastern Western North Eastern Total

*As per CEA LGBR 2013-14

Net Buy Net Buy Net Sell Net Sell Net Sell

The average daily cleared volume for the month was 70.4 MUs. Whereas, the total cleared volume for the month was 2114 MUs, lower than 2499 MUs traded in the previous month. Around 304 MUs were lost owing to congestion in the transmission network.
June13 Avg. daily cleared volume (MUs) 70.4 June 12 (Same month last year) 51.2 May 13 80.62

As a result of excessive supply and suppressed demand the prices in June13 continued to show a downward trend. The average area price in N3 (Punjab) remained same as compared to last month, due to non-availability of transmission corridor as the state had tied up short term power arrangements to meet its anticipated rise in demand practically leaving no grid availability for other transactions. Despite

arranging for additional power, the state continues to face demand outstripping supply. The area prices in other regions were also lower vis--vis last month. The average prices in the southern region showed maximum downfall of 33% in a months time, reaching Rs 4.36 per unit.

Bid Area June13 North-East (A1,A2) East (E1,E2) North (N1,N2) North (N3) South (S1) South (S2) West (W1,W2) West (W3) UN_MCP*
corridor

Prices (Rs./kWh) May 13 2.32 2.31 2.36 2.36 6.47 6.47 2.36 2.36 2.73

Percentage change 16% 16% 17% 0% 33% 32% 17% 18% 19%

1.94 1.93 1.96 2.36 4.36 4.42 1.95 1.94 2.22

*UN_MCP: Unconstrained market clearing price refers to the price discovered before accounting for any congestion in the transmission

However in the month of June the average participation at IEX in the day-ahead electricity market was 1354, higher from 1297 in the month of May13, whereas the maximum participation of 1410 was observed on June 22. On an overall basis, IEX has a total of 2184 participants in the electricity market of which 1900+ clients are industrial open access clients.