The exchange will be set up in New Delhi and have an initial outlay of Rs 25 crore. | |
| Financial Technologies (FTIL) and Power Trading Corporation (PTC) on Wednesday jointly launched the Indian Energy Exchange (IEX), the first of its kind in the emerging markets, for power generators, traders and consumers. |
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| FTIL will hold 48 per cent stake in IEX while PTC will hold 26 per cent. Among other partners, Tata Power will hold 5 per cent, REC 5 per cent, Reliance 5 per cent, Lanco 5 per cent, IDFC 5 per cent and Adani Enterprises, the remaining stake. |
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| "India's leading commodity exchange, the Multi Commodity Exchange (MCX), promoted by FTIL, holds over 92 per cent of futures trading in the entire energy sector in the country. Hence, the new exchange will have the added advantage of our expertise," said Venkat R Chary, the chairman of MCX. |
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| The first energy exchange will be set up in New Delhi and have an initial outlay of Rs 25 crore. The exchange, which will start trading shortly, has entered into a technological alliance with Omax Technology, Europe. It has also tied-up for best market practices with Nord Pool of Northern Europe. |
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| IEX will trade in power from all four regional load dispatch centres. |
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| "Traders can conduct business between 10 am and 12 noon. The trading stations has been provided by FTIL. Bidders can modify their bids till the end of the call period," said Joseph Massey, the deputy managing director of MCX. |
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| The regional load dispatch centres (RLDCs) will allocate transmission capacities for the trades settled through the exchange depending on the capacities requisitioned. |
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| Transmission bottlenecks on the inter-regional links will be managed by congestion management techniques such as market splitting. |
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| The final schedules issued by RLDCs will be considered as the delivered volume. The bidders will pay/receive for their trades to/from the exchange. The exchange will bear the counter-party risk. |
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| Transmission charges and losses are proposed to be apportioned on all trades to make them equitable under the present CERC regulations. All payments will be routed electronically through clearing banks authorised by the power exchange. |
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| "The transparent price and futures trading mechanism will prompt new entrants to set up power projects in India and existing traders to expand power generation capacities. Closed units may also start operations to meet the power deficit in India," Massey added. |
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| On Wednesday, India's total generation capacity is estimated at 1,49,000 mw and an additional 78575 mw is required, according to the 11th Five Year Plan. |
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| The short-term trading market constitutes 3 per cent of the total generation amounting to Rs 120,000 crore which is likely to go up to 25-40 per cent in the next few years. |
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| The IEX will run daily, weekly and monthly futures. |
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