NSE may promote proposed power exchange

MUMBAI: The National Stock Exchange (NSE) is likely to join one of the two power exchanges being set up in the country as its initial promoter, a senior official told ET.

NSE, the country’s largest stock exchange, is in talks with National Commodity and Derivatives Exchange (NCDEX) and National Thermal Power Corporation (NTPC) for buying a stake in the power exchanges being set up by them. Others who have expressed interest include Power Grid Corporation (PGCIL), Power Finance Corporation (PFC) and National Hydroelectric Power Corporation (NHPC).

“NSE is also joining as one of the initial promoters. The stakeholding will be more or less equal,” a top NCDEX official said, but declined to reveal details. NSE has a 15% stake in NCDEX.

On the date when the NCDEX plans to launch its power exchange, the official said that their hearing before the Central Electricity Regulatory Commission (CERC) would be completed in a fortnight. “Thereafter the regulator may take another six-eight weeks considering to extend an in-principle approval. Only after that the process of power exchange launch can begin,” said the official.

Meanwhile, private power majors like Tata Power (TPC), Reliance Energy (REL), Adani Power and Lanco have lined up to buy stakes in Indian Energy Exchange (IEX), jointly promoted by Multi Commodity Exchange of India (MCX) and Financial Technologies.

“MCX and FTI will jointly hold a 50% stake in IEX. Power Trading Corporation will be the second largest power shareholder in the consortium with a 26% stake. TPC, REL and Rural Electrification Corporation may hold 5% stake each. While Adani, Lanco and IDFC may have 3% stake each in the consortium, a senior official of the exchange said.

“Three to four more stakeholders will join the power exchange that will further dilute the stake held jointly by FTIL and MCX,” MCX deputy managing director Joseph Massey said. On the exact date being planned for the launch of the exchange, Mr Massey said it would be too early to indicate.

A Tata Power spokesperson confirmed that the company is picking up a stake in IEX. An REL official declined comment.

The initial investment for the power exchange is expected to be Rs 50 crore. The exchange will enable participants to trade electricity the subsequent day through standard hourly contracts and block contracts that permits them to draw power from the grid at a given hour. The price will be fixed through trading. All settled trades shall be compulsorily advised to the concerned regional load despatch centre for being scheduled, subject to transmission capacity availability.