Talk about the demand for electricity within both the commercial and the industrial sector…
The electricity demand for commercial and industrial consumers has gone down considerably due to the lockdown and closure of all non-essential services with overall demand at national level falling by more than 30 per cent. The demand reduction has a huge impact on DISCOMs financials as commercial and industrial consumers are the backbone of their revenue sources. Further, it has a cascading effect on the supply side also. As is being witnessed today, most of the generation in the country is operating at sub-optimal levels and payment default risks have elevated. Renewables are exposed to the curtailment risks and off-take from thermal generators has reduced significantly. As a result, the short-term market prices have also plummeted in March and April. The under-construction projects are also facing liquidity crunch and delay in the sourcing of materials and construction activities etc. All policy and regulatory decisions are focusing on easing the current situation. Given that the current situation is impacting the entire power sector value chain, the road to recovery might be a long one.
Will DISCOMs gear-up concerning purchases? Do we witness an increasing amount of purchases from the short-term power market? Kindly elaborate…
Typically, the onset of summers signals an increase in electricity demand up throughout the country as temperatures rise substantially in most parts of the country. During this period, the DISCOMs also gear up their purchases from the short-term power market to ensure smooth power supply in the wake of increased demand. However, this year, with the drop in commercial and industrial activities, the electricity demand is muted which has impacted the short-term trading volumes. Therefore, currently, the purchases witnessed in the short-term market are mainly transient, where DISCOMs are buying power to reduce their overall power purchase costs.
From our side, at PXIL, we ensure the availability of our transaction platform on a 24×7 basis and ensuring that customers can make most of the situation by transacting in all products seamlessly from any location.
What are the measures taken to make a comeback? How is the exchange committed to continuing its support to customers during the lockdown – what are the strategies in place?
PXIL has been providing uninterrupted services to all its customers during the lockdowns. The exchange is committed to continuing supporting its customers and has been assisting in alleviating the difficulties imposed due to the lockdown. We have implemented measures and processes to ensure business continuity and adequate service to our customers. We would focus on further strengthening of our core business operations and critical functions to ensure business sustainability so that all the needs of our customers are satisfied.
What are your strategies to make a comeback?
Over the last couple of years, PXIL has completely revamped its technology offering, which has allowed seamless operations to take place on a 24×7 basis even during this period of lockdown. On the business side, PXIL’s primary focus has been on the term-ahead and REC markets. Now, we have enough liquidity to also scale up our operations in the day-ahead spot market. We expect a huge surge in the liquidity on the Power Exchanges on the back of new opportunities which are on the cards in the power sector. In short to medium term, we expect the introduction of many new products under categories such as Real-Time Markets, Ancillary Services and Longer Tenure Contracts which would help in deepening of power markets. As an exchange, we are continuously pushing the boundaries and prepared to take advantage of the opportunities that the power markets present to us.
