NSE Gets SEBI Nod to Launch Monthly Electricity Futures Contracts
12 Jun 2025 9:38 AM IST12 Jun 2025 9:38 AM IST
NSE was the first stock exchange in India to establish an electricity exchange, launching Power Exchange India Limited (PXIL) in 2008
National Stock Exchange of India (NSE)
Mumbai: The National Stock Exchange of India (NSE) has received approval from the Securities and Exchange Board of India (SEBI) to launch monthly electricity futures contracts.
The launch of these contracts aims to provide market participants with 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—generation, transmission, distribution, and retail.
"This marks a significant milestone in deepening India’s power markets and supporting long-term structural reforms initiated under the Electricity Act, 2003," NSE said.
“This approval is only the beginning of NSE’s vision for a broader electricity derivatives ecosystem. Plans are underway to gradually introduce contracts for difference (CFDs) and other long-duration electricity derivatives such as quarterly and annual contracts, subject to regulatory approvals,” said Ashishkumar Chauhan, MD & CEO, NSE.
"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," NSE added.
NSE was the first stock exchange in India to establish an electricity exchange, launching Power Exchange India Limited (PXIL) in 2008.
"India’s journey toward achieving its net-zero emissions target demands substantial investment—estimated at over $250 billion per year until 2047, as per a NITI Aayog report. By 2030, renewable energy sources such as solar and wind are expected to contribute over 50 percent 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," NSE added.
The launch of these contracts aims to provide market participants with 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—generation, transmission, distribution, and retail.
"This marks a significant milestone in deepening India’s power markets and supporting long-term structural reforms initiated under the Electricity Act, 2003," NSE said.
“This approval is only the beginning of NSE’s vision for a broader electricity derivatives ecosystem. Plans are underway to gradually introduce contracts for difference (CFDs) and other long-duration electricity derivatives such as quarterly and annual contracts, subject to regulatory approvals,” said Ashishkumar Chauhan, MD & CEO, NSE.
"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," NSE added.
NSE was the first stock exchange in India to establish an electricity exchange, launching Power Exchange India Limited (PXIL) in 2008.
"India’s journey toward achieving its net-zero emissions target demands substantial investment—estimated at over $250 billion per year until 2047, as per a NITI Aayog report. By 2030, renewable energy sources such as solar and wind are expected to contribute over 50 percent 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," NSE added.
( Source : Deccan Chronicle )
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