The need of Indian Energy Exchange (IEX), India’s first-ever power exchange is gauged from the fact that despite a new concept in power sector most of the important power sector companies have applied for membership of the Exchange. IEX has received expression of interest of over 100 companies for membership of the exchange and it is expected that over 50 of them would complete their compliances during the first phase of trading. Some of the companies who have taken lead in the membership and establishment of the new exchange are PTC, Tata Power Trading Co. Ltd; Tata Power Co. Reliance Energy Ltd., Lanco, Adani, REC, IDFC, BGR Energy, Konaseema Gas Power, JSW Power Trading, DCM Shriram Consolidated Ltd., Monnet Ispat & Energy Ltd., and leading state utilities like Andhra Pradesh, Karnataka PCL, MPPTCL etc.

Going into the first phase, IEX has planned out a training program for its members and it would be followed by training for various users, CERC, RLDCs, SLDCs, RPCs and executives of SERCs from 16th Jan’08 to 25th Jan’08 to provide hands on training on the operations of the exchange and trading software at the IEX office in Mumbai. The training will be imparted by the faculty from OMX Technology, Sweden who specializes in Nordpool based trading system, staff of Financial Technologies India Ltd, MCX and IEX. They will train more than 200 participants spread across the industry.

IEX received its formal approval from the Central Electricity Regulatory Commission (CERC) on 31st August, 2007. In order to create awareness of the first power exchange of the country and for membership registration IEX organized road shows in major cities like Mumbai, Delhi, Kolkata, Hyderabad and in Guwahati. They were well attended by cross-section of the market that included generators, distribution licensees, RLDCs, SLDCs, SERCs, transmission utilities, and traders among others. IEX has been successful in explaining the benefits of the exchange to the power sector which is visible from the overwhelming response received by it in the membership drive. IEX has also demonstrated the trading software which has been provided by OMX Technology of Sweden and Financial Technologies India Ltd (FTIL).

Mr. Venkat Chary (retd. IAS) Chairman, IEX and former Member MERC, stated that “It will be a historic step when power trading will happen in the country for the first time in an organized form of an Exchange. The millions of stakeholders in power sector will benefit from the price and distribution efficiency brought about by power trading through the Exchange. The price signals from day ahead trading on IEX will direct utilization efficiency in power consumption, better allocation of power and greater grid discipline at national level.”

“Indian Energy Exchange (IEX) will be the platform on which various power market segments will converge for true discovery of prices which will enable better capacity utilization, smoothen prices for consumers and attract capacity addition by providing a ready market place”, stated Mr. Joseph Massey, Director, IEX.

IEX has been promoted by Financial Technologies (India) Ltd and PTC India Ltd, and its other shareholders are Reliance Energy, Tata Power Company, Lanco Infratech, Adani Enterprises, REC, and Infrastructure Development Finance Company (IDFC). Multi Commodity Exchange of India (MCX), the no.1 commodity exchange, having rich experience in exchange operations in India as well as abroad is providing the domain expertise.

IEX will operate initially a day-ahead market with features like closed auction with double-side bidding and clearing at uniform price. It proposes to offer other products like week-ahead, month-ahead, seasonal and one-year contracts along with OTC clearing in the second phase of operations.

Sourced From: Financial Technologies (India) Ltd

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