Q. Why is the power demand of late hitting new highs?

A. Power demand in the country has remained elevated due to rising temperature. Data from the India Meteorological Department (IMD) showed that rainfall activity declined in August, and of the 717 districts in the country, 263 districts received inadequate rainfall, leading to hotter and humid weather conditions.

Q. What has been the impact of rise in demand on power prices on the exchanges?

A. Prices have increased on the exchanges. This week, the weighted market clearing price (MCP) on the Indian Energy Exchange (IEX) touched ₹7.14 per kilowatt hour (kWh or unit) up from ₹6.04 per unit from last week. Prices, intermittently, have been hitting the ₹10 per unit price cap.

Q. What is the outlook for the power demand in days ahead?

A. Power demand is expected to remain high for the next couple of month, as rainfall is seen weak due to the El Nino effect. The IMD earlier this month had said that monsoon rains during the second half of the June-September season is expected below normal at 94-99% of the long period average. In August, rains are seen at 90-94% of the long period average. August and September typically account for 46% of the overall monsoon rains.

Q. How prepared are the key power sector stakeholders for the summer power demand?

A. The Centre has taken a number of steps this year in anticipation of record power demand. In February, the union power ministry had directed power generation companies to blend 6% imported coal till September to avoid any kind of crisis due to lack of domestic coal. The power ministry, along with ministries of coal and railways, monitors and coordinates on a regular basis, for increasing in the production and dispatch of coal. The ministry has also directed all captive coal blocks to maximize their production. Imported coal based plants have been mandated to operate at full capacity during high demand period.