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August 8, 2013

Power Prices in Punjab touches to Rs. 10 per unit due to network congestion...


high power prices in punjab

Due to congestion in the power grid, power prices in Punjab are touching to Rs. 10 per unit at the exchanges.

This is the highest price in the country which has surpassed prices for South India which historically remained as highest.

South India prices used to be highest among all regions. But this trend has reversed with Punjab emerging as the state which is buying power at the highest cost nationally.

South India faces high power cost due to grid constraint. Grid connectivity between South India and rest of the country is limited. This has been the major reason for the region buying power at very high costs.

The cause of this issues seems to be the drastic reduction of Punjab's import capability in the recent past.

Punjab's import capability had, in fact, dipped to zero and the state had stopped buying power from the exchanges in the last several days. Now it resumed buying but it had to buy Rs 8 per unit which zoomed to Rs 10 per unit the next day. It has been hovering between Rs 8 and Rs 10 per unit since then.

However, due to rise in demand for power in Punjab, the state has been witnessing a spike in prices. Demand for power rose mainly on account of higher consumption by agriculture during sowing season. The state has already tied up for additional power from other states to meet demand for power. However, that is not enough and the state is now forced to buy power from the exchanges at Rs 10 per unit.

Whilst South India had witnessed a fall in price over the last one month between Rs. 5 per unit and Rs. 3 per unit.

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