Power stocks surge as Ministry to float tender to purchase gas-based power

Shares of power generation companies rose 1-4 percent on September 8 after reports said that the Ministry of Power intends to issue a tender to purchase 4,000 MW of gas-based electricity for approximately 20 days between September and November.

This step is aimed at addressing the increasing demand for power and reducing the strain on coal-based power plants, as per a report by Economic Times.

At 12:21 pm, shares of JSW Energy, NTPC, Torrent Power, Tata Power and SJVN were trading 1-4 percent higher on the BSE.

Catch up on all LIVE stock market updates here

The ministry has chosen NTPC Vidyut Vyapar Nigam to handle the buying of electricity from power generators and selling it in the high-price day-ahead and term markets, the report said.

In April, the ministry took a similar step to prepare for increased summer demand and reduce stress on domestic coal and its transportation. Gas-based power is typically more costly and is only used when demand is elevated.

This development comes at a time when electricity demand is increasing since mid-August, when peak demand reached all-time highs, and coal supplies at power plants began diminishing rapidly.