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Increasing Congestion in the Transmission Netwok & Mounting Power Supply Pressure: Likely to Pull Down the Spot Power Price

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Spot power prices on the Indian Energy Exchange dipped in May as supply outpaced demand even as most parts of the country reeled under high temperatures and consumption shot up. 

Source: ET

SNP Insight

Bad financial condition is restraining the distribution companies to buy power from the spot market. And same time increase in generation capacity from newly commissioned power plants, increase in hydro power generation push power supply to exceed the demand. This supply and demand gap pull down the price of spot market by 15.48% with respect to same period in last year. Also inter-state transmission network congestion also restricts the southern states to procure power. Spot power market price may stay at lower side as long as the financial restructuring of distribution companies and transmission network strengthening is not put into practice.

Source: SNP Infra Research