NEW DELHI: Electricity spot prices in India surged to a more than eight-year high because of lower quantum of traded power, higher demand amid a retreating monsoon, which has also forced power sellers such as Telangana to turn buyers.

Prices touched ?14.08 per unit for Tuesday on the India Energy Exchange (IEX). It was the highest since April 2010 when spot prices rose to ?13.90 per unit. The alltime high for electricity in the spot market was ?17 per unit in April 2009, according to IEX.

Lower generation from hydro and wind power projects, and rise in humidity and temperatures contributed to the rise in electricity spot prices for Tuesday delivery.

According to IEX, the average price for Tuesday is ?6.53 per unit with only 200 million units (MUs) of electricity being offered to be supplied on the exchange as compared to a demand for 266 MUs.

The Economic Times newspaper on Monday reported about electricity price in spot market soaring to a record of ?12.95 per unit on Sunday, while the peak hour price touched ?8.78 a unit.

According to IEX, some of the large sellers such as Madhya Pradesh, Uttar Pradesh, Karnataka, Haryana and Meghalaya brought lower amounts of electricity for sale. Also, state power distribution companies in Telangana, Tamil Nadu, Maharashtra, Bihar and West Bengal are buying power at higher rates to meet rising demand.

Power distributors have been the weakest link in the electricity value chain given their poor payment history.