Multi Commodity Exchange of India, the largest Commodity Derivatives Exchange, has received SEBI approval to launch Electricity Derivatives.
This development underscores the strong commitment and support of the Regulators – SEBI and Central Electricity Regulatory Commission – in enabling a dynamic and sustainable power market, said the company exchange.
The Electricity Derivatives Contracts to be introduced by MCX will enable generators, distribution companies, and large consumers to hedge against price volatility and manage price risks more effectively, by enhancing efficiency in the power market, it added.
MCX targets to become a sustainable energy player and work towards deepening India’s energy markets.
Praveena Rai, MD & CEO, MCX said the electricity contracts will offer participants a reliable, transparent and regulated platform to manage power price risks, which are becoming more dynamic due to renewables and market-based reforms.
With India’s growing focus on renewable energy and open access power markets, electricity derivatives can serve as a vital bridge between the physical and financial sectors, she said.