Hindustan Power Exchange Ltd. (HPX), promoted by PTC India Ltd, Bombay Stock Exchange, and ICICI Bank, commenced operations on July 7, 2022, after receiving all necessary approvals from Central Electricity Regulatory Commission.
Backed by the latest technology and a series of innovative features, the exchange promises to offer speed, transparency, and better price discovery in the execution of trades, a release by HPX said.
The exchange will initially offer trading in Contingency contracts, Green Contingency contracts, and Renewable Energy Certificates. It will steadily increase its product portfolio and provide a wide range of contracts to address the demand of different segments of the electricity market, the release noted.
New avenue for spot trading
Speaking on the launch, Akhilesh Awasthy, COO, HPX said, “The need for a third power exchange has been felt for quite some time now by the buyers and sellers for optimized price discovery and better efficiency in power purchase. HPX will be a seamless platform that has been built on the same technology, which makes Bombay Stock Exchange the fastest exchange in the world. The matching engine of the exchange is procured from one of the best technology providers in the world, which is also the technology provider for power exchanges in Europe. We will also gain from the significant experience of our promoters, who are leaders in their respective areas of operations.”
“Almost 90% of India’s electricity is traded via bilateral contracts lasting for 20 years or more between power generation companies and state utilities. These contracts do not provide the flexibility to sector participants to take advantage of market conditions at different times. Power exchanges provide the market participants a platform with multiple avenues for buying-selling of power and hence manage their power portfolios efficiently. The introduction of HPX will give a definite push to the development and progress of spot trading in electricity,” he added.
Advanced technology
Samir Patil, CBO, BSE said, “Hindustan Power Exchange(HPX) has been envisaged to promote market efficiency through advanced technology and to maximize value for the power market. The cutting-edge technology solutions, efficient price mechanism and the quality of service offered at HPX, would act as the differentiator in the Indian Power Market. With the technology set to be one of the key point-of-difference in the Indian Power Market, BSE looks forward in carving its footprint in the sector, thereby paving the way for a technology-led efficient power market through HPX.”
HPX becomes the third power exchange in India after Power Exchange India (PXIL) and Indian Energy Exchange (IEX).
Competitive market place
A spokesperson for PTC India Ltd. said, “Hindustan Power Exchange is indeed going to be an institution that will offer a conducive and competitive marketplace for electricity trade in India. HPX is entirely focused to cater a range of market products to the participants in pursuant to their specific requirements. HPX recognizes the competition and the need to bring other innovative products for industrial as well as distribution sector consumers. It also aims to assure a robust trading mechanism for buyers and sellers where they obtain an efficient and transparent electricity price.”
Bridging the gap
The Indian power sector is at the cusp of a massive energy transition where the share of renewable energy is steadily rising in India’s power generation mix. Further, more variable power output from wind and solar plants is set to push short-term trading of energy, thereby giving more options to both buyers and sellers. HPX will play a pivotal role in bridging the gap between demand and supply and providing trading at an optimized cost.
