Power procurement from state power generators means industries will now have to shell out more money from their pockets. The increase of Rs. 2.75 per unit is expected, taking the net power cost per unit touching Rs. 7.

As per an article in Economic Times, industries in Gujarat route around 1000 MW from other states via power exchanges while 2500 MW of state power generation companies are sitting idle.

GETCO; state transmission company has written letters to 125 industries, quoting the following:

“Due to rise in the system load demand, leading to grid constraint in the upstream network, it shall not be feasible to permit short-term open?access to consumers as per enclosed list with effect from March 20,”

The decision has also taken into consideration the intent to reduce solar power tariff in the state. The state is said to have tied up for 950 MW at a higher solar tariff as against the requirement of 350 MW under solar obligation.

Aggrieved by the move, which is seriously questioning the viability, the industries association of the state are going to give a presentation to the govt. in the coming days.

An article in Economic Times can be accessed here.

1. Unavailability of domestic coal.

2. Low spot market prices discovered at exchanges owing to fall in demand.

Energy intensive industries – Cement, fertilizer etc. dependent on captive power production, have been using these low prices to their advantage.

The article has quoted a case of RSWM company of LNJ Bhilwara Group. The company generates power at an average cost of 4.2 Rs per unit (including coal cost and transmission losses). Due to present fall in spot market electricity prices, the company has been buying power at a cheaper rate of around Rs. 3 per unit. The company has also increased monthly power procurement from exchanges this fiscal.

As per IEX, the greater participation from captive consumers at exchanges has triggered higher volumes, greater competition and robust price discovery in short-term power market.