Electricity prices on exchanges fall to near zero as rains reduce demand | Today’s news
New Delhi: Heavy rains and a fall in power demand from the end of the month pushed power prices to near zero across several trading blocks in the last week of September, according to data from the India Energy Exchange.
On September 26 and 27, real-time prices on the platform were at 10 paise per unit for 26 and 18 trading blocks respectively. Each trading block on the platform has a range of 15 minutes. On 24 September, prices fell below 10 paise in 34 trading blocks.
The sudden softening in prices comes as demand eased with cooler weather and the completion of much of the kharif sowing season. The average real-time market price fell by 13.3%. ₹2.75 per unit in September from ₹3.17 per unit in the same month last year, IEX data showed.
Lower prices also worry power producers and distribution companies that sell surplus renewable electricity on exchanges, as market prices can fall well below their acquisition costs. Renewable energy usually costs more than ₹2 unit, while fixed and dispatchable renewable energy (FDRE) and hybrid projects can cost more than ₹3 unit.
Demand is falling
On 28 September, peak power consumption fell below the 220 GW mark, with electricity shortages below 1 million units per day, compared to around 20 million units in late August and early September.
“There has been very high liquidity due to rains, a drop in demand due to weather changes RTM has reached near zero prices for several time blocks since September 24,” said an executive at the renewable energy developer, requesting anonymity.
The release at the end of the month came after a month of strong electricity demand and supply tensions. September’s peak power consumption reached 269.06 GW, just below the record 270.8 GW recorded in May. The daily power shortage touched 22 million units and hovered around 20 million units during several days of the month.
The increase in demand last month and lack of supply may be related to weather disruptions. Coal production and transportation were affected by rains, which limited thermal power generation, while normal rains burdened hydropower generation. Hydropower production was roughly 10% lower than in 2025.
Availability up
As coal mining and transportation improved, the availability of fuel also increased. State-run Coal India Ltd said on Thursday it raised coal supplies by 12.5% to 61.20 million tonnes in September 2026 from 54.40 million tonnes in the same month last year.
Deliveries to the power sector rose 10.63% to 48.90 million tonnes from 44.20 million tonnes a year earlier, the company said.
“With sustained operational momentum demonstrated during September and Q2 FY2026-27, CIL remains well positioned to meet its coal production and supply targets and continue to contribute to the energy security of the country on a sustained basis. Further increase in coal production along with supply is expected after the end of the monsoon season,” the company said in a statement.
