NSE to launch monthly electricity futures soon: CBDO Sriram Krishnan

The National Stock Exchange (NSE) is set to launch cash-settled monthly electricity futures contracts in India within a few weeks, following approval from Securities and Exchange Board of India (Sebi). This move aims to provide a crucial hedging tool for participants in the power market by allowing buyers, sellers, traders, industrial and retailers to manage price risks.

“The exchange is in talks with stakeholders to launch electricity futures contracts soon. The launch date is expected to be announced within two-three weeks,” said Sriram Krishnan, Chief Business Development Officer, NSE, while speaking at an event in Delhi today. 

The launch of monthly electricity futures will provide market participants with effective hedging tools against electricity price volatility, enabling more accurate price signals in the power sector, he said.

Electricity futures contracts would also encourage capital investments across the electricity value chain—generation, transmission, distribution, and retail, said Harish K Ahuja, Head (Sustainability, Power/Carbon Markets, Listing, SSE) NSE.

NSE received formal approval from the Sebi for the launch of monthly electricity futures on its platform on June 11, 2025. This is being termed as a significant milestone to deepen India’s power markets and support long-term structural reforms initiated under the Electricity Act, 2003.

The monthly electricity contracts will have 50MWh as trading unit, ₹1 per MWh as tick size and the maximum order size of 2,500 MWh. The contracts will be available for all 12 calendar months in a year, and will be launched on the first business day of the launch month.  

Notably, the NSE was the first stock exchange in India to establish an electricity exchange, launching Power Exchange India Limited (PXIL) in 2008. The exchange’s strong understanding of both spot and derivatives markets uniquely positions it to build an integrated and liquid electricity derivatives market. 

NSE Clearing Limited, India’s largest, highly capitalised and most trusted clearing corporation, will manage the clearing and settlement of these contracts. Recognised as a qualified central counterparty (QCCP) by the Sebi, it is backed by a robust settlement guarantee mechanism and a very strong net worth.

India’s journey toward achieving its net-zero emissions target demands substantial investment—estimated at over $250 billion year on year till 2047 as per Niti Aayog report. By 2030, renewable energy sources such as solar and wind are expected to contribute over 50% of the nation’s installed power capacity.

Ashishkumar Chauhan, MD & CEO, NSE recently said this approval is only the beginning of NSE’s vision for a broader electricity derivatives ecosystem. He said that plans are underway to gradually introduce contracts for difference (CFDs) and other long-duration electricity derivatives such as quarterly and annual contracts subject to regulatory approvals.