Indian short-term power contracts to surge

Onset of summer and new restrictions by electricity regulator to blame.

The Central Electricity Regulatory Commission said short term contract volume in February rose by 67% to 3,149.27 million units (MUs) from 1,883.75 MUs in January.

The National Power Exchange said demand for power is expected to further surge during summer and the upward trend in short term contracts will continue until the high hydro period commences in June and July when demand and electricity prices will fall.

Restrictions imposed by CERC on overdrawing power from the grid means utilities will have to meet their requirement through short term contracts including power exchanges that result in higher electricity bills.