The Hindu Business Line : First power trading exchange launched

New trading
Members to pay admission fee: Rs 25 lakh, deposit: Rs 25 lakh, annual subscription: Rs 5 lakh.
Transaction fee at one paise per unit on the electronic platform.
Membership drive launched across cities in Mumbai Delhi, Hyderabad, Guwahati, Kolkata.

Our Bureau

Mumbai, Nov. 2Public sector Power Trading Corporation and Financial Technologies, promoter of the Multi Commodity Exchange, have launched the country’s first power trading platform, “Indian Energy Exchange” (IEX), with an initial investment of Rs 25 crore.

Membership drive has been launched across key cities of Mumbai, Delhi, Hyderabad, Guwahati, and Kolkata. A member has to pay an admission fee of Rs 25 lakh, as also a deposit of Rs 25 lakh, besides an annual subscription of Rs 5 lakh.

IEX will trade day-ahead contracts where the buyers will put in the quantity and price quote, while the quantity of power available for trade will be fixed by Power Trading Corporation, which at present handles supplies through the national grid.

Transaction fee

The Exchange will charge a transaction fee of one paise per unit on the electronic platform, while it is now four paise a unit for orders placed over the phone.

“The short term power trading, which is now done over the phone, accounts for just 3 per cent of the total market size of about Rs 1.20 lakh crore. We wish to bring in the much needed transparency in price discovery for this market,” said Mr Joseph Massey, Deputy Managing Director, MCX.

Tie up

Financial Technologies has tied up with international firm OMX which provides software for similar power exchanges in the US and Europe.

Other investors

Apart from Financial Technologies and Power Trading Corporation, other investors in the exchange include Adani Enterprises, IDFC, Lanco Infratech, REC, Reliance Energy and Tata Power.

“Power is a perishable commodity. Many generators are not producing to their capacity as they find the price not remunerative. With the transparency in price discovery we bring in, I’m sure more new investment will flow in and will not lead to any price escalation,” said Mr Venkat R. Chary, Chairman, IEX.

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