The power market is expected to grow by 25percent by 2024

With the various initiatives in the pipeline, the breadth and depth of markets are expected to increase manifold over the next few years.
How do you assess the effects of the current energy transition on power trading?
From the initial decline in demand in March/April 2020, two years ago, to rising power needs in the following times, whether in terms of meeting peak demand or energy traded, electrical transactions have shown encouraging signs of recovery and are on the path to ongoing expansion.
The coal supplies were hampered, which resulted in high pricing for a brief while, as the war in Ukraine and other geopolitical events had impacted the coal market. However, that was quickly resolved thanks to the coordinated efforts of the Ministries of Power, Coal, and Railway and the quick response of the nation’s many distribution companies and power generators. We got good support from government authorities regarding several problems with payment security procedures, payment delays, coal availability, power transactions, and market development, which were resolved quickly.
Please give us an update on the current state of the power markets.
The goal of our policymakers and regulators to increase the importance of the power markets in our nation is apparent. This is also clear from the draft of the National Electricity Policy, which talks for a 25percent expansion of the electricity market by 2023–2024.
The resolution of jurisdictional boundaries between SEBI and CERC  related to electricity transactions has enabled the introduction of longer-duration delivery-based contracts on  SEBI to regulate power exchanges, along with introducing derivatives in electricity to be regulated by SEBI  jointly with CERC.
The “Daily, Weekly, Monthly and Any Day Single-Sided Reverse Auction” Contracts that PXIL introduced into the “PRATYAY” system allow participants to transact in both conventional power and various forms of renewable energy such as solar, wind, hydro, and other renewable sources, allowing buyers to fulfil their renewable purchase obligations. Longer-term contracts have increased the importance of exchanges in signalling future capacity expansions in the renewable energy sector.
How is the ever-increasing energy demand changing the power market and trading prices?
In the year 2022, the early start of the summer season increased the demand for electricity throughout the state. It limited the generation from generators using imported coal and gas, which resulted in high prices in the day-ahead market for the import of coal and gas.
Due to several timely actions taken by the Ministry of Power to resolve supply-side restrictions, increasing despatch from renewable sources and hydro starting in April, the market prices stabilised. Power exchanges are marketplaces where buyers and sellers may more effectively and transparently manage their portfolios. PXIL is working to make that a reality experience better for all our participants daily.
What are your thoughts on competitive bidding in the power market to stay in business?
Competitive bidding is tried, tested, and frequently used for goods like engineering and consulting services based on clearly established rules. Contractual, competitive bidding for the acquisition of infrastructure services is more complicated since it entails carefully defining service criteria and contracting for the long-term delivery of these services.

Power exchanges have played a crucial role in the evolution of competitive bidding in the power procurement arena to enable price discovery in various types of contracts in a just and transparent manner. Every contract used in the  Power Exchange Platform is standardised, and all the users are informed about the responsibilities for any transactions under any given agreement. Trading licensees, state electricity distribution companies (DISCOMs) and power procurement corporations, Independent Power Producers (IPPs), and Open Access (OA) consumers from all over the nation are among the market participants transacting at PXIL. All of these participants regularly transact on various products on the PXIL platform.
Electricity can be bought and sold around the clock on PXIL’s proprietary trading platform, “PRATYAY,” by buyers like DISCOMs, major industrial and commercial users, etc., and sellers like Independent Power Producers (IPPs) and Captive Power Plants (CPPs). For this purchase and sale for the delivery of electricity and the daily settlement of all payments for such transactions, PXIL offers a digital platform. With the advent of the Green Day Ahead Market, Green Term Ahead Market, and Hydro Contracts, several entities from the renewable area have started trading on the PXIL platform in addition to contracts for transactions of conventional energy, such as solar, wind, large and small hydropower, etc.
What are the latest developments in the green contract market? What opportunities do you see for them?
Green Term Ahead Market (GTAM) Contracts have enabled participants to meet renewable energy trading requirements. The GTAM Contracts were introduced on the ‘PRATYAY’ system on March 24 2021. During FY 21-22, nearly 1,435 MUs of renewable energy were transacted in different GTAM Contracts.
PXIL introduced the Hydro bid type in TAM, and Hydro Green Term Ahead Market (Hydro GTAM) contracts on August 8, 2022, on the ‘PRATYAY’ software system after the grant of approvals from CERC.
PXIL introduced Intra-Day and Day Ahead Contingency Contracts in these segments wherein Hydro energy can be transacted to meet current and next day’s requirements. The salient features of Hydro Contracts are Hydro GTAM: Purchase of Hydropower enables obligated entities to fulfil their Hydro Power Obligation (HPO) for the year. PXIL issues Hydropower purchase certificates to all Buyers purchasing Hydropower under Hydro GTAM Contracts. Sellers in Hydro GTAM Contracts are Large Hydro Plants (‘LHP’) commissioned after March 8 2019.
Hydro bid-type in TAM: The purchase of hydropower will enable obligated entities to fulfil their ‘Other RPO’ requirement for the year as prescribed in the MoP Order dated July 22, 2022. Exchange issues Hydropower purchase certificates to all Buyers purchasing hydropower under the Hydro bid type in TAM Contracts. The Sellers in these Hydro Contracts are Small Hydro, LHP and DISCOMs with surplus hydro energy.
Most of the sale in the Hydro Contracts is from specific sellers, especially Hydro IPPs and State utilities and remains seasonal, with most transactions from April to September. PXIL is continuously engaging with Hydro plants and State utilities across the country to enhance the use of these contracts for meeting their Hydro purchase requirement.
Further, in September 2022, PXIL introduced Contracts for up to 90 days ahead with different price discovery mechanisms, e.g. Uniform Price similar to existing DAM / RTM / REC and Reverse auction similar to existing auction transactions opted by DISCOMs.
As the short-term power market expands and PXIL introduces the above contracts, the business volume of the exchange will increase quickly. As DISCOMs strengthened their internal system/process to undertake accurate demand-supply analysis, they would concentrate their purchases through the Exchange platform instead of solely depending on the costlier power contracted under long-term PPAs. The outlook for PXIL remains encouraging.
Furthermore, there are enabling regulatory provisions, which, once implemented, would enhance the competitive efficiencies of the power market. Ultimately, the Exchanges are marketplaces where buyers and sellers can efficiently and transparently manage their portfolios better. We from PXIL continue to strive to improve that experience for all our participants daily.