Domestic coal-based generation strong; supply likely to improve in few months
IEX, the country’s largest electricity exchange surged to its highest level in 13 years, reflecting a steep rise in the demand for power. To discuss the latest developments in the space, CNBC-TV18 spoke to Sumit Kishore, Executive Director-Capital Goods, Power & Infrastructure, Axis Capital, and R Lakshmanan, Executive Director, REC.
Power companies have been in focus. IEX, the country’s largest electricity exchange surged to its highest level in 13 years, reflecting a steep rise in the demand for power.
To discuss the latest developments in the space, CNBC-TV18 spoke to Sumit Kishore, Executive Director-Capital Goods, Power & Infrastructure, Axis Capital, and R Lakshmanan, Executive Director, REC.
First up, Kishore pointed out that we are in the middle of a storm right now. He stressed that coal availability was at its lowest in a decade at March-end. Owing to demand, there’s been a spike in imported coal and gas prices as well. He highlighted that domestic coal-based generation has been strong and that coal is here to stay. He believes coal-based capacities are unlikely to shut down.
He said, “We are seeing a situation where domestic coal-based generation is witnessing strong growth. For the first time in a decade perhaps, we had a situation on IEX where actually supply of electricity was less than demand and that also triggered a surge in merchant power prices.”
Lakshmanan of REC, pointed out that there’s been a lot of pent-up demand in the system. He believes coal supply and generation are likely to improve over the next few months.
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“There has been a lot of pent-up demand which has come on to the system that has created a spike in recent times, but as we progress it is likely that over the next 2-3 weeks' time, the coal supply and the generation are likely to improve; that should help soothe the heated up power market,” he said.
Watch the video for the full interview.
(Edited by : Dipikka Ghosh)
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