Objectives & Benefits

A Power Exchange shall function with the following objectives:

  1. Ensure fair, neutral, efficient and robust price discovery.
  2. Provide extensive and quick price dissemination.
  3. Design standardised contracts and work towards increasing liquidity in such contracts.                                                                                                     Explanation: Liquidity is a measure of ease of entering or exiting into a transaction (generally large transaction) with minimal impact in the market price of the transacted contract.

Benefits of Power Exchange

  • Transparency: A Power Exchange offers a transparent, national-level platform for trading electricity in India leading to a vibrant power market.
  • Access a diversified portfolio: A Power Exchange offers a broader choice to generators and distribution licensees at the national-level so that they can trade in smaller quantities and smaller number of hours without additional overheads.
  • Payment security: A Power Exchange stands in as the counter-party for all trades; so participants need not be concerned about the risk-profile of the other party.
  • Minimal transaction overheads/charges: All charges are displayed on the power trading company’s terminals; so there is no room for negotiation.
  • Hedging UI risks: A Power Exchange provides a tool to hedge against adverse movements in electricity prices. Thus, price risks are minimised.
  • Market development: A Power Exchange may launch a range of products to facilitate development of power markets in India in such a way that investment in capacity enhancement is encouraged. 

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