The National Stock Exchange (NSE), India’s largest stock exchange, has launched electricity futures contracts to bring efficiency and risk management to India's evolving power market. To kickstart adoption, NSE is offering a 6-month transaction fee waiver on these contracts.
| Aspect | Details |
|---|---|
| Duration | First 6 months post-launch (until Dec 31, 2025) |
| Scope | Transaction charges waived at exchange level |
| Broker Flexibility | Brokers may choose whether to pass the savings to clients |
| Market Comparison | Competing exchanges charge ₹170-200 for ₹1 crore; NSE: 0% |
Type: Monthly cash-settled (no physical delivery)
Underlying Index: Likely based on Day-Ahead Market (DAM) prices or approved power exchange indices
Settlement: Financial, based on benchmark electricity prices
| Participant | Potential Benefit |
| Discoms | Hedge against volatile electricity prices |
| Power Generators | Lock in predictable revenue streams |
| Industries | Manage electricity procurement costs |
| Traders/Investors | Speculative opportunities without physical delivery |
| Brokers | Attract new clients if savings are passed on |
Build Market Liquidity: Fee waivers reduce cost barriers for early adopters
Diversification: Helps NSE expand beyond equities and commodities
Policy Synergy: Aligns with India’s goal of creating a unified national electricity market
Broker Behavior: Not all brokers may pass on the benefit to clients
Low Initial Participation: Could limit price discovery and volume
Evolving Regulations: Oversight by CERC may change post-launch
Stronger Risk Management: Discoms and industries gain financial tools to hedge exposure
New Product Expansion: Potential for options and long-duration power contracts
Global Benchmarking: Similar to power futures markets in the US and EU
| Key Highlight | Details |
| Product | Monthly electricity futures (cash-settled) |
| Fee Waiver | 6-month waiver for exchange transaction charges |
| Target Users | Discoms, Generators, Industries, Traders, Brokers |
| Strategic Goal | Boost participation, support power sector reform |
| Next Milestone | Monitor broker fee behavior and volume post-launch |
Disclaimer: This article is intended for informational purposes only and should not be construed as investment advice. Please consult a licensed advisor before making financial decisions.
