Overview

• SEBI granted approval on June 11 for NSE to introduce electricity derivatives and the exchange expects to set a launch date within two to three weeks.
• The one-month futures contract will trade in 50 MWh lots with a Rs 1 per MWh tick size and settle in cash based on the 30-day weighted average spot price from three Indian energy exchanges.
• Eligible participants include power generators, distributors, traders, corporates and financial institutions such as banks, insurers and project financiers.
• NSE plans to follow the monthly contract with quarterly and annual electricity futures and is also exploring contracts for difference to support renewable energy revenue stability.
• MCX has secured SEBI clearance for a similar product but intends to introduce its electricity futures later this year.