In a welcome move to expedite the power sector reforms,
the Central Electricity Regulatory Commission
(CERC) has recently given the green signal to the
first power bourse in the country. Indian Energy
Exchange (IEX), the country's first power bourse was launched at
the Multi Commodity Exchange (MCX) after receiving
the regulatory approval from CERC. With the launch of
IEX, India has entered into the exclusive club of
developed nations that possess a power exchange. The
underlying notion to kick start the IEX has been to catalyze
the modernization of electricity trade in the country
by ushering in a transparent and neutral market through
a technology-enabled national-level trading platform. It
is believed that a purported power bourse under the aegis
of CERC will bring rationality in the prices of the
electricity that is traded. Undeniably, price rationality on the
IEX will provide a transparent, credible and secure
reference price for other physical market trades of the entire
power sector. The strategy to set up a power exchange
will encourage power companies to come up with more
surplus merchant power capacities and also attract
new investments to meet India's growing power requirement.
The IEX is the country's first demutualized
power exchange, which is promoted by Financial
Technologies India Limited (FTIL), which controls the MCX along
with power trading firm PTC India Limited. Other
stakeholders include Tata Power, Reliance Energy
Limited, Infrastructure Development Finance Co. Limited,
Lanco Infratech, state-run Rural Electrification Corp., and
Adani Enterprises Limited. It is a platform for the purchase
and sale of electricity based on actual demand and supply
of energy. The price of electricity is determined based on
the bids and offers made during the transaction day.
It encourages establishing a national equilibrium price
for power. Being a spot market, IEX works as a
delivery-based exchange while the Power Grid Corporation manages
the transmission and scheduling of power. IEX follows a
24-hour period based auction procedure that is more reliable and transparent,
thereby enabling the buyers and sellers to play a fair game to achieve a uniform price. |
