Power Market Analysis: November13

The trend of lucrative prices in IEX spot market in power continues

The day-ahead power market at IEX continued to remain buyer friendly in the month of November, following the same trend as observed in the last few months. The seasonal variations across the country did lead to a slight reduction in the quantum of electricity traded in the spot market however prices continued to remain attractive. The average market clearing price (MCP) in November increased to Rs 2.78 per unit, up from Rs 2.71 per unit last month, highlighting a marginal increase of 3%. The month of November saw a total of 2481 MUs (Million kWh) traded in the market, marking a decrease of around 6% from the 2645 MUs traded in October13. With winter season setting in northern India, the constituent states in the region traded almost 25% less power as compared to the previous month. In the eastern region too, the demand reduced owing to heavy rainfall caused by cyclonic activities. Congestion in the transmission network also restricts inter-regional flow of electricity. The month of November saw around 497 MUs of electricity in the day-ahead spot market being lost on account of congestion. The volumes traded at the exchange could have been higher had it not been for severe transmission congestion, especially in the Southern corridor - between rest of India and the Southern region as well as in the Southern bid areas of S1 (Andhra Pradesh and Karnataka) and S2 (Tamil Nadu and Kerala). On an average, 1524 participants traded in the day ahead spot market at IEX in the month of November. PRICES:

Bid Areas Nov13 North-East (A1,A2) East (E1,E2) North (N1,N2) Punjab South (S1) South (S2) West (W1,W2, ) West (W3) MCP* 2.41 2.41 2.56 2.56 3.50 6.95 2.56 2.30 2.78

Average Prices (Rs./kWh) Oct'13 2.44 2.44 2.48 2.48 4.15 5.74 2.47 2.41 2.71 Change (%) -1% -1% 3% 3% -16% 21% 4% -5% 3%

*MCP: Market Clearing Price refers to the price discovered by the Exchange before accounting for any constraint / congestion in the transmission corridor

On an overall basis, the eastern region, north eastern region, S1 bid area (Andhra Pradesh and Karnataka) and W3 bid areas (Chhattisgarh) witnessed a drop in area prices - the average prices fell to Rs. 2.41, Rs. 2.41, Rs. 3.50 and Rs. 2.30 per unit respectively. The area prices across the northern region, western region and the State of Punjab increased marginally and were all the same at Rs. 2.56 per unit. Non-availability of the transmission corridor in the southern states owing to persistent congestion throughout the month led to the increase in area prices in the states of Tamil Nadu and Kerala - the average clearing price rose from Rs. 5.74 per unit last month to Rs. 6.95 per unit in November, highlighting an increase of 21%. Volumes: The over-supply position at the exchange continued in the month of November with total sell bids worth 4239 MUs and total buy bids worth 3660 MUs. The state of Punjab, southern and northern regions were the net buyers whilst the western, northeastern and eastern regions were the net sellers in electricity. Out of a total of 2481 MUs traded across the month, the utilities bought almost 52-53% while the remaining quantum was bought by Industrial open access consumers. An average of 83 MUs was traded daily throughout the month, with the highest cleared volume at 97 MUs on 23 November. The table below provides a snapshot of electricity traded across regions: REGION BUY (MU) November October Change (%) November '13 '13 '13
North East East North Punjab West South

SELL (MU)

NET

October '13
36.96 386.78 775.26 0 1297.1 148.41

Change (%)
17.85% SELL 56.32% SELL -24.98% BUY

28.36 72.85 660.63 304.95 1074.85 339.23

27.87 99.06 898.65 349.32 935.92 333.69

1.77% -26.46% -26.49% -12.70% 14.84% 1.66%

43.56 604.62 581.63 0.64 1098.69 151.72

BUY
-15.30% SELL 2.23% BUY