Latest news with #electricityfutures
Reuters
08-07-2025
- Business
- Reuters
India's MCX to launch electricity futures as hedge against weather-driven demand shifts
MUMBAI, July 8 (Reuters) - India's Multi Commodity Exchange ( opens new tab will launch the country's first electricity futures contracts on Thursday, providing power generators, distribution companies, and large industrial consumers with a tool to hedge their risks. The exchange will initially launch cash-settled contracts for the current and next three-month periods, but they will subsequently be available for all 12 calendar months, MCX said in a statement on Tuesday. The exchange's managing director Praveena Rai said the goal is to address the sector's needs, deepen energy markets, and support sustainable, market-driven power pricing. Weather has always heavily affected India's power demand, with needs peaking during summer heat and easing with the moderate temperatures accompanying the seasonal monsoon rains. However, increasingly erratic weather patterns, with more heatwaves and untimely rainfall, have made demand harder to predict. Currently, Indian utilities rely mainly on long-term power purchase agreements spanning up to 25 years for base load requirements, supplemented with short-term purchases through power exchanges for peak demand. Expensive long-term power purchases, subsidised supply, and electricity losses due to poor infrastructure, however, have left India's distribution companies with debts of around $9.5 billion, according to the government. India's National Stock Exchange will open trading of similar monthly electricity futures from July 14, the bourse operator said last week.
Bloomberg
17-06-2025
- Business
- Bloomberg
India's MCX Bourse Said to Launch Electricity Futures This Year
Follow Bloomberg India on WhatsApp for exclusive content and analysis on what billionaires, businesses and markets are doing. Sign up here. Multi Commodity Exchange of India Ltd., the nation's largest commodities bourse, will introduce electricity futures later this year, according to people familiar with the matter who asked not to be identified as the information is still private.
Reuters
11-06-2025
- Business
- Reuters
India set for electricity futures trading as NSE becomes 2nd exchange to get nod
June 11 (Reuters) - India's National Stock Exchange ( opens new tab on Wednesday became the second exchange in a week to secure regulatory approval to launch electricity futures contracts, a move experts say could help struggling power utilities improve their finances. The Multi Commodity Exchange of India (MCX) ( opens new tab received a similar approval last week from the Securities and Exchange Board of India (SEBI). A futures contract will allow the purchaser to secure power at a fixed price at a later time. Currently, Indian utilities rely heavily on long-term power purchase agreements (PPAs) spanning up to 25 years for baseload requirements, supplemented with short-term purchases through power exchanges for peak demand. Distribution companies (discoms) in India owed about $9.5 billion in unpaid dues, according to the government, driven by expensive long-term power purchases, subsidised supply, and electricity losses due to poor infrastructure. "There is clearly an incentive from now on to not lock yourself into a 25-year contract and rather look at shorter terms," said Ashutosh Padelkar, Senior Associate at Aurora Energy Research. Globally, power derivatives are traded on CME Group (CME.O), opens new tab, Euronext, the Intercontinental Exchange and European Energy Exchange ( opens new tab, among others. "Discoms will gain the ability to use forward curves to plan procurement more dynamically... This can help optimize costs, avoid overcontracting, and improve demand forecasting," said Sanjeev Aggarwal, chairman of Hexa Climate Solutions. A forward price curve helps in predicting the expected electricity price in the future. Discoms currently sell solar surplus at low daytime prices, but can now use derivatives to sell at pre-agreed higher rates during that period. They can also buy electricity at lower prices during non-solar hours using the contracts, when spot prices typically surge. Even power producers can hedge by taking opposite positions in the derivative markets using the forward price curve, said Aditya Malpani, a senior director at power producer AMPIN Energy Transition.
