Monsoon rains help ease Indian power prices

Power prices on Indian exchanges declined in August, with both the day-ahead market (DAM) and the real-time market (RTM) trading lower compared with last year, as heavy monsoon rains boosted supply while milder weather curbed demand, Mint reported on August 24.

Data from the Indian Energy Exchange showed the market clearing price in DAM was 11% lower at INR4.17 ($0.048) per unit on August 22, against INR4.68 a year earlier. Prices in RTM also slipped 6% to INR3.57 per unit. The drop is largely attributed to higher sell bids, which surged 51% on DAM to 10,378.37 GWh this month, compared with 6,865.90 GWh in the same period last year, according to Mint.

Experts noted that easing prices provide distribution companies and commercial and industrial consumers with an opportunity to replace costlier sources by procuring power through exchanges. The increase in supply has been aided by robust hydropower generation following heavy monsoon rains and a rise in solar capacity. On August 20, Mint reported that hydropower output may climb about 10% in FY26 due to favourable rainfall.

So far this month, purchase bids on exchanges have totalled 6,041.02 GWh, significantly lower than the more than 10,000 GWh of sell bids, keeping prices under pressure.

Peak power demand this summer was 241 GW, below the projected 270 GW for the year. India’s record peak remains 250 GW, reached in May 2024. Between April and June, overall demand fell 1.5% year-on-year to 445.8bn kilowatt-hours, as the early onset of monsoon reduced the use of cooling appliances, data from the Central Electricity Authority showed.