Hindustan Power Exchange begins operation

Our Bureau | | Updated on: Jul 06, 2022

The power supply position has improved over the last couple of months but the increasing trend of demand might put pressure on market prices | Photo Credit: SIVAKUMAR PV

The power exchange is promoted by PTC India, Bombay Stock Exchange and ICICI Bank

Hindustan Power Exchange (HPX) commenced operations on Wednesday after receiving all necessary approvals from the Central Electricity Regulatory Commission (CERC)

The exchange — promoted by PTC India, Bombay Stock Exchange and ICICI Bank — will initially offer trading in Contingency contracts, Green Contingency contracts, and Renewable Energy Certificates.

“It will steadily increase its product portfolio and provide a wide range of contracts to address the demand of different segments of the electricity market. Backed by the latest technology and a series of innovative features, the exchange promises to offer speed, transparency, and better price discovery in the execution of trades,” HPX said in a statement.

The Indian power sector is at the cusp of a massive energy transition where the share of renewable energy is steadily rising in India’s power generation mix, it added.

Further, more variable power output from wind and solar plants is set to push short-term trading of energy, thereby giving more options to both buyers and sellers. HPX will play a pivotal role in bridging the gap between demand and supply and providing trading at an optimised cost.

Speaking on the launch, HPX COO Akhilesh Awasthy said, “The need for a third power exchange has been felt for quite some time now by the buyers and sellers for optimised price discovery and better efficiency in power purchase.”

Almost 90 per cent of India’s electricity is traded via bilateral contracts lasting for 20 years or more between power generation companies and State utilities. These contracts do not provide flexibility to sector participants to take advantage of market conditions at different times, he added.

“Power exchanges provide the market participants a platform with multiple avenues for trading and hence manage their power portfolios efficiently. The introduction of HPX will give a definite push to the development and progress of spot trading in electricity,” Awasthy noted.

Published on July 06, 2022
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