Power exchanges have received a major boost following the cabinet decisions allowing FDI. Currently, Indian Energy Exchange (IEX) and Power Exchange India (PXI) are operational and they are trading about 2% of the total 800 billion units generated in the country. These exchanges are currently engaged in day ahead market and await necessary government and regulatory approvals for the introduction of future and derivative products. IEX's daily turn over is 65 million units while PXI handles 1 million units to 3 million units of transaction every day.
Another two power exchanges are planned and they include National Power Exchange and Marquis Energy Exchange.
Jayant Deo, who stepped down on August 31 as MD & CEO of Indian Energy Exchange said today's cabinet decision was the most welcome decision. "The collective knowledge of the world in power exchanges is very low and it is hardly four years in India. The FDI will give knowledge sharing a big boost." IEX's stake holders include Financial Technologies, PTC India, Rural Electrification Corporation, IDFC.
Rupa Devi Singh, MD & CEO of Power Exchange India also welcomed the decision terming it as huge positive. "Any new regulations bring clarity which always helps. FDI in power exchanges will not only help bring in more funds but technological knowledge also." PXI's equity holders include NSE, NCDEX, PFC, Governments of Gujarat and Madhya Pradesh and West Bengal, JSW, GMR and Tata Power Trading.
M G Raoot, MD & CEO, National Power Exchange "This is a welcome decision for the growth of power market on exchange platform. India has already adopted multi exchange model thereby giving a space for the foreign investors to step into this new area of high potential. The power exchanges, which are capital intensive ventures, will benefit heavily due to FDI move especially when they are in the midst of launch of future and derivative products." The equity holders of National Power Exchange, which is yet to begin its operations, comprise NTPC, NHPC and PFC (collectively hold 50%) and the balance 50% are held by TCS. BSE, Meenakshi Power, IFCI and DPSC, West Bengal.
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