India’s power regulator has asked the country’s electricity exchanges to cap prices at Rs 12 per unit amid a surge in power demand and the rising cost of imported coal.

During the past few days, prices discovered at power exchanges have remained “significantly” higher, the Central Electricity Regulatory Commission said in a statement.

Abnormally high prices at power exchanges, even for a short period, hurt consumers’ interests and erode buyers’ confidence in the market, the commission said.

The commission also noted that India’s power demand has surged due to the onset of summer and an uptick in economic activities after the coronavirus pandemic.

Power demand could rise further after weather officials forecast maximum temperatures above normal in April in most parts of the northwest, northeast and central regions.

The Indian Energy Exchange and unlisted PXIL are the two major power exchanges in India.

Peak power demand met or the highest supply in a day rose 12 per cent to 198.47GW on April 1 compared with the year-ago same day.

According to the power ministry data, the peak power demand met was 177.20GW on April 1, 2021.

The data shows that during the entire month of April in 2021, the peak power demand was recorded at 182.37GW. It was 132.73GW in April 2020, a tad lower than 176.81 GW in April 2019.

Experts are of the view that the quantum jump in peak power demand met shows recovery of economic activities through rising commercial and industrial demand of electricity especially after easing of lockdown restrictions by states for curbing coronavirus infections.

The India Meteorological Department (IMD) had said on Thursday that there would not be any respite from heat in the coming months.