Hindustan Power Exchange begins operation

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Promoted by BSE, PTC India and ICICI Bank, the Hindustan Power Exchange (HPX) on Wednesday began operations after receiving all necessary approvals from the Central Electricity Regulatory Commission (CERC).

HPX is the third power exchange in the country as Indian Energy Exchange and Power Exchange of India Ltd are already operational.

”Hindustan Power Exchange (HPX), promoted by BSE, PTC India and ICICI Bank, on Wednesday commenced operations,” a statement said. 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, it stated.

According to the statement the exchange will initially offer trading in Term Ahead Market, Green Term Ahead Market, 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.

Akhilesh Awasthy, COO, Hindustan Power Exchange 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,” Awasthy said.

Almost 90 per cent 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. Sameer Patil, CBO, BSE said, ”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.”

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.

The HPX will play a pivotal role in bridging the gap between demand and supply and providing trading at an optimized cost, it added.