India’s NSE to open electricity futures trading from July 14

India’s National Stock Exchange (NSE) will open trading of monthly electricity futures from July 14, the bourse operator said on Tuesday, weeks after securing regulatory approval for launching the contracts.

A futures contract will allow the purchaser to secure power at a fixed price at a later time. Experts have said the move to launch such contracts could help struggling power utilities improve their finances.

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Currently, Indian utilities rely heavily on long-term power purchase agreements (PPAs) spanning up to 25 years for baseload requirements, supplemented with short-term purchases through power exchanges for peak demand.

The Multi Commodity Exchange of India (MCX) has also received a similar approval from the Securities and Exchange Board of India (SEBI).