Cheaper electricity: As power generation turns surplus, trading gets cheaper on exchanges

Zee Media Group     

New Delhi: While the demand for electricity has remained constant, government's aggressive power capacity addition plan and Coal India's adequate coal supply to thermal plants has resulted in surplus power generation.  

This has resulted in trading of power cheaper, resulting in discoms buying power from the spot market than from generators like NTPC and Damodar Valley Corporation, with which they have long-term contracts. Undoubtedly, the befit is set to pass on to the power consumers.

As per The Economic Times report, this was exactly why the entire power offered at the India Energy Exchange on December 29 got sold, as claimed by power minister Piyush Goyal. 
The report, quoting a power sector official said that power prices at exchanges have declined about 25% over past three quarters and have been falling further primarily due to lack of demand. During December last year, around 5 billion units were offered for sale. However, only about 3 billion units of power were sold - a gross oversupply of some 2 billion units.