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Monthly electricity futures at NSE aims to provide market participants an effective hedging tools | Photo Credit: FRANCIS MASCARENHAS
The National Stock Exchange has received capital market regulator SEBI’s approval to launch monthly electricity futures contracts.
The launch of monthly electricity futures by NSE aims to provide market participants an effective hedging tools against electricity price volatility, enable more accurate price signals in the power sector and encourage capital investments across the electricity value chain including generation, transmission, distribution and retail.
Ashishkumar Chauhan, MD & CEO, NSE said the approval is only the beginning of NSE’s vision for a broader electricity derivatives ecosystem.
Plans are underway to gradually introduce contracts for difference and other long-duration electricity derivatives such as quarterly and annual contracts subject to regulatory approvals, he added.
NSE was the first stock exchange to establish an electricity exchange, launching Power Exchange India in 2008. NSE Investments holds 29 per cent stake in PXIL.
NSE said it is committed to working closely with all market participants, regulators and stakeholders to align efforts around enabling policies such as Market-Based Economic Dispatch and market coupling initiatives by CERC and SEBI’s framework on CFDs.
It is crucial for the spot and futures electricity markets to evolve in tandem to create a virtuous cycle of liquidity and stability. A financially settled futures market will allow participants to hedge their risks effectively, while a robust day-ahead spot market will ensure reliable price discovery, it said.
India’s journey towards achieving its net-zero emissions target demands substantial investment — estimated at over $250 billion year on year till 2047, as per NITI Aayog report.
By 2030, renewable energy sources such as solar and wind are expected to contribute over 50 per cent of the nation’s installed power capacity. A robust and dynamic electricity derivatives market is essential to attract this scale of climate finance from both domestic and global investors, said the exchange.
Early this week, SEBI allowed leading commodity derivatives exchange MCX to launch derivative on electricity.
Published on June 11, 2025
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