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Business Standard
a day ago
- Business
- Business Standard
NSE gets SEBI nod to launch monthly electricity futures
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. This development marks a key step toward strengthening India's power markets and advancing the structural reforms outlined in the Electricity Act, 2003. According to a NITI Aayog report, Indias transition to net-zero emissions by 2070 will require annual investments exceeding $250 billion through 2047. By 2030, renewable energy sources like solar and wind are expected to account for over 50% of the countrys installed power capacity. A well-developed electricity derivatives market is crucial to attracting both domestic and global capital to support this transition. The new monthly electricity futures contracts aim to provide market participants with tools to hedge against price volatility, enabling more transparent and efficient price signals in the power sector. They are expected to spur investments across the electricity value chain, from generation to retail. Ashishkumar Chauhan, MD & CEO, NSE said, This approval is only the beginning of NSEs 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 The introduction of these contracts will follow a calibrated, phased approach to ensure market integrity and build investor confidence. Aligning the growth of both spot and futures electricity markets is essential to creating a stable, liquid ecosystem. Financially settled futures will allow effective risk hedging, while a robust day-ahead spot market will support reliable price discovery. NSE is committed to working closely with all market participants, regulators, and stakeholders to align efforts around enabling policies such as Market-Based Economic Dispatch (MBED) and market coupling initiatives by CERC, as well as SEBIs framework on CFDs. Clearing and settlement of the new contracts will be handled by NSE Clearing, a Qualified Central Counterparty (QCCP) recognized by SEBI. The entity is supported by a strong net worth and a well-established settlement guarantee mechanism.
Business Upturn
2 days ago
- Business
- Business Upturn
NSE gets SEBI nod to launch monthly electricity futures, aims to deepen power market reforms
By News Desk Published on June 11, 2025, 19:21 IST The National Stock Exchange of India (NSE) has received regulatory approval from the Securities and Exchange Board of India (SEBI) to launch monthly electricity futures contracts, marking a significant milestone in India's efforts to deepen its power markets and drive long-term structural reforms under the Electricity Act, 2003. The new futures contracts will provide market participants with tools to hedge against electricity price volatility, offer more accurate price signals, and encourage capital investment across the electricity value chain, including generation, transmission, distribution, and retail. According to Niti Aayog, India's transition to net-zero emissions by 2070 will require over $250 billion in annual investment until 2047, with more than 50% of installed power capacity expected to come from solar and wind by 2030. A liquid electricity derivatives market is seen as critical for attracting large-scale domestic and international climate finance. NSE MD & CEO Ashishkumar Chauhan stated that the approval is 'only the beginning' of the exchange's broader electricity derivatives strategy. Future offerings could include contracts for difference (CFDs) and longer-duration contracts like quarterly and annual futures, subject to regulatory clearances. The contracts will be financially settled and cleared by NSE Clearing Limited, a SEBI-recognized Qualified Central Counterparty (QCCP) with a robust settlement mechanism and strong capital base. NSE was the first Indian exchange to enter the electricity space, having established Power Exchange India Limited (PXIL) in 2008. With its combined expertise in spot and derivatives markets, NSE aims to build a comprehensive and liquid electricity derivatives ecosystem, aligned with key policy initiatives like Market-Based Economic Dispatch (MBED) and market coupling by CERC. This development strengthens NSE's position as a global leader in derivatives, having been ranked the world's largest derivatives exchange by trading volume in 2024 by the Futures Industry Association (FIA). News desk at
