Sebi Chief Tuhin Kanta Pandey Just Dropped A Bold Fix For India’s Power Sector. Here's What It Is

SEBI Chairman Tuhin Kanta Pandey connected Thursday endorsed energy derivatives arsenic a captious instrumentality to negociate value uncertainty, stabilize revenues, and pull semipermanent finance into India’s powerfulness sector. Speaking astatine nan motorboat of NSE Electricity Futures successful Mumbai, he called nan move a “major step” successful aligning India’s power markets pinch world standards.

“The energy derivatives, starting pinch monthly futures, will supply a transparent and regulated level to hedge against value volatility,” Pandey said. “This stableness is important for powerfulness generators to proceed expanding infrastructure to meet India’s increasing powerfulness demands.”

The monthly futures contracts—launched connected July 14 and modeled connected world power commodities for illustration ember and earthy gas—are designed to beryllium high-volume, low-speculation instruments. Unlike different commodities, energy cannot beryllium easy stored, requiring a real-time equilibrium of request and supply. Until now, India’s marketplace has lacked forward-pricing tools, relying mostly connected beingness contracts and spot transactions.

Pandey explained that nan absence of derivatives has agelong been a structural spread successful India’s powerfulness sector. Power producers, for example, person had constricted expertise to fastener successful prices aliases scheme rate flows. With derivatives, generators tin now unafraid early trading prices and protect against abrupt value swings.

The inaugural reflects a coordinated push by nan Ministry of Power, SEBI, and nan Central Electricity Regulatory Commission (CERC) to modernize India's power markets. Global benchmarks successful nan EU and U.S. already usage akin instruments to guarantee value stability.

NSE Managing Director and CEO Ashish Chauhan reported beardown early liking successful nan caller contracts. “As of today, 20,822 tons person been traded since July 14 crossed August, September, and October contracts. The full traded worth has already crossed ₹450 crore,” he said.

Pandey cited IEA information projecting that 85% of world energy request maturation done 2027 will travel from emerging economies—led by India. With procreation expected to deed 1,824 cardinal units successful FY25, volatility is inevitable. “Electricity derivatives will thief america negociate that risk,” he said.

Published on: Jul 18, 2025 9:39 PM IST