MCX, the country’s largest commodity exchange, and Indian Energy Exchange, one of the largest energy spot exchanges, have entered into a licensing agreement to launch electricity derivatives linked to IEX spot electricity prices on MCX trading platform, subject to necessary approvals from the government and the concerned regulators.
This shall lay the groundwork for a vibrant electricity derivatives market in the country, said MCX in a statement on Thursday.
The launch of electricity derivatives shall provide an effective risk management avenue for value chain participants to hedge price risks and protect their revenue margins.
With this, India will join a group of developed countries that offer electricity derivatives on an exchange platform.