Spark learnt from the market sources that the Indian Government proposes to increase penalties on distribution utilities for overdrawing electricity from the grid, a move that is expected to raise demand and prices in the short-term open market and help merchant power plants run by private firms such as Adani Power, Lanco and Monnet Power.
This move may also be useful in preventing the grid collapse due to over drawl and force the utilities to shed load.
Power prices in the short-term market are closely linked to penalties imposed by the regulator. Distribution utilities prefer purchasing from the open market if charges for overdrawing from grid are high.
Power sector regulator
The penalties, called unscheduled interchange (UI) rates, are levied on state distribution utilities when they do not draw power as per agreed schedules. The power generators are also charged when they inject less or more power than their declared schedules.
"The commission is of the view that the utilities should plan for procurement of power on long-term, medium-term and short-term basis instead of resorting to overdrawal through unscheduled interchange," CERC said in its draft regulations.
A Maharashtra energy department official said the proposal was untimely as most distribution utilities are facing a severe cash crunch. An official in Andhra Pradesh Transmission Corporation said the utility was not in favour of the proposal that would force it to resort to load shedding as power would become costly.
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