IIT Kanpur’s Centre for Energy Regulation Spearheads Dialogue on Power Market Derivatives
New Delhi – In a pivotal step towards addressing the evolving dynamics of the Indian Power Sector, the Centre for Energy Regulation (CER) at the Indian Institute of Technology Kanpur organized a Stakeholder Consultation Workshop on “Developing Power Market Derivatives for the Indian Power Sector.” The event, held at the India Habitat Centre in New Delhi, brought together key stakeholders to explore innovative solutions and develop risk mitigation strategies amidst the growing share of renewables and market volatility.
Professor Anoop Singh, Department of Management Sciences, IIT Kanpur, a leading authority in the field, presented the key outcomes of an ongoing study conducted by CER (for more details of CER activities and studies please visit https://cer.iitk.ac.in) with support from the Shakti Sustainable Energy Foundation. Through his presentation, Professor Singh shared insights into derivative product design, regulatory frameworks, and policy implications vital for successful implementation of power market derivatives in the country. He proposed an innovative approach to facilitate sector-wide participation in financially settled and physically delivered derivatives, aimed at mitigating risks encountered by DISCOMs, Open Access Consumers, and Thermal/RE generators.
Dr. Srikant Nagulapalli, Additional Secretary of the Ministry of Power, delivered the Keynote Address, acknowledging CER’s accomplishments in the study and highlighting the government’s initiatives for Renewable Energy (RE) integration and market development. He highlighted the workshop’s importance in shaping the sector’s future.
The event featured two insightful panel discussions and deliberations among esteemed industry professionals. The first panel, comprising representatives from the Central Electricity Authority, PTC India Ltd, Indian Energy Exchange, and EY Parthenon, explored the theme “Identifying Risks and Hedging Avenues in the Indian Power Market: Role of Derivatives.”
The second panel delved into the “Regulatory Framework for Power Market Derivatives,” with Professor Singh setting the stage through a presentation. Eminent panellists from the Punjab State Electricity Regulatory Commission, Central Electricity Regulatory Commission, Grid India, Securities and Exchange Board of India, and The Lantau Group offered valuable insights and perspectives on this critical aspect.
The discussions highlighted the pivotal role of derivatives in power market development and the need to enhance understanding among key stakeholders, particularly distribution companies. These entities could leverage such instruments to effectively hedge their exposure to short-term power market volatility, ensuring greater stability and risk mitigation.
The workshop concluded with a consensus on the potential of power derivatives to enhance market efficiency and manage risks in the Indian power sector. CER’s pioneering initiative garnered appreciation from attendees for its timely and comprehensive approach to addressing the sector’s evolving challenges, encouraging dialogue, and exploring innovative solutions for a sustainable and resilient power ecosystem.