Excerpts From TATA Power annual report:
Power Trading
Around 190 billion units (BUs) of electricity were traded in the short term power market during FY23, as compared to a total of 184 BUs traded during FY22. Out of this, around 42% of trading had taken place through power exchange(s). Due to high competition amongst power traders, trading margins are under immense pressure. The market is concentrated with 8 larger players with the remaining traders operating in regional pockets, largely for trading their own power. At ~ ₹ 5.94 per unit, the average clearing price for Day Ahead Market (DAM) in FY23 increased by nearly 35% as compared to the previous fiscal. The increase in DAM prices is largely attributable to the combined effect of a surge in overall demand, an increase in international coal and gas, and a shortage in the supply of domestic coal, especially during monsoons. The prices being discovered in the tenders floated by Discoms for the upcoming months of 2023 remain high, being in the range of ₹ 8-11/kWh.
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