NSE prepares to launch monthly electricity futures contract
The National Stock Exchange (NSE) is rolling out monthly electricity futures contracts after getting SEBI's approval.
These new contracts let players in the power sector lock in prices and manage risks as India's energy market keeps evolving.
Each contract covers 50 MWh of electricity per month, making it easier for big buyers and sellers to plan ahead.
Cash-settled contracts based on average spot price
Instead of actual power changing hands, everything settles in cash based on the average spot price across India's three main power exchanges over 30 days.
Contracts kick off on the first business day each month and wrap up just before month-end.
This setup helps generators, distributors, traders, and large consumers protect themselves from wild price swings.
Expect quarterly and yearly options in future
NSE says these futures are all about risk management—not wild speculation—similar to how global markets operate where trading volumes often outpace spot deals.
Down the line, expect quarterly and yearly options too.
The goal? Better price discovery, less volatility, and more investment flowing into India's growing energy sector.