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K.V. Kurmanath

Hyderabad, Jan. 11 The Indian Energy Exchange (IEX), the first exclusive bourse to trade energy that is expected to commence operations in a few months, has discounted fears that trading of the precious commodity on the bourse could make it costlier. It, in fact, would help in realising better price discovery, while marrying the short demands and short surpluses, according to Mr Joseph Massey, Director of IEX.

Financial Technologies (India) Ltd, which promotes the Multi Commodities Exchange, holds 46 per cent in IEX. While PTC India owns 26 per cent, Tata Power, Reliance Energy and Lanco hold five per cent each.

“Learning from our commodities experience, I would say that an electronic platform seemingly integrates the existing fragmented spot markets, making India as one energy market,” he told Business Line over phone from Mumbai. In this process, it would bring in the advantages of transparency, counterparty guarantee, and anonymity resulting in better price discovery, he explained.

“The exchange derived energy prices through the transparent process would soon become far superior to the existing mechanism in energy trading. Therefore, the apprehension of price hike due to trading on a power exchange is unjustified,” Mr Joseph Massey said. Apart from other benefits, the exchange would ensure the energy generators to focus on generation while not bothering about the trading part.

It would offer a level-playing field for sellers and buyers as it ensures anonymous trading. The Central Electric Regulatory Commission (CERC) would act as a regulator for the exchange.

“We are making efforts to make it functional in the next few months. We are also familiarising the exchange operations to various stakeholders,” he said.

When asked about the concerns with regard to distribution, he said the exchange expected that large percentage of trades would be intra-regional.

The fact that there was no congestion in the intra-regional transmission network would make the IEX trade seamlessly deliverable.

More Stories on : Power | Commodity Exchanges

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