Spot Power Prices in India Ease as Coal Stocks Fall

Spot power prices in India eased in October as cooler weather reduced demand. Over the same period, coal stocks at power plants slipped to 17.5 million tonnes from 18.6 million tonnes at the end of September. Greater reliance on thermal power is behind the decline.

Indian Energy Exchange data show that between October 1 and 21, the average market clearing price in the day-ahead market fell about 3% to Rs 7.6 per unit from Rs 7.8 a month earlier. In the real-time market, the average price dropped about 14% to Rs 6.7 per unit from Rs 7.8. Sell bids in the day-ahead market rose 23%, while buy bids slipped 1%. The market clearing price is the point where demand bids meet supply offers.

More supply and slightly less demand pulled prices down. The sharper fall in the real-time market suggests short-term conditions eased the most. The relief may not last. Falling coal stocks show thermal plants leaning harder on their reserves, so weather is doing the work for now. Spot power prices in India still depend on demand, and a cooler spell can reverse quickly.

Watch whether coal stocks keep sliding in November and whether demand picks up again. If it does, spot power prices in India could turn higher, especially in the day-ahead market. Plant inventory levels will show how much cushion thermal generators have.