NCDEX, NSE form JV for trading electricity futures

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Kolkata, Sep 13 (UNI) The National Commodity&Derivatives Exchange Ltd (NCDEX), the country's demutualised online commodity exchange, has entered a joint venture(JV) with the National Stock Exchange (NSE) to begin trade on electricity futures in the first week of October.

Informing this to newspersons here today, NCDEX Managing Director and Chief Executive Officer(CEO) R Ramaseshan said the 50:50 JV between NCDEX and NSE had been christened as Power Exchange of India Ltd, adding the trade on electricity futures would be based on the unused surplus power available on the grid.

'' There is a very small but significant portion of the power available outside the Power Purchase Agreement(PPA) between a power generating company and a power utility, called Unintended Interchange (UI), which is currently available for trading. We have obtained an in-principle approval from the Central Electricity Regulatory Commission(CERC) for the power bourse. The electricity exchange is expected to come alive in the first week of October,'' Mr Ramaseshan elaborated.

India's total installed capacity of power is 1,43,000 MW in India and considering various divisions, including the lean months for generating hydel power, the country on an average operated between 1,00,000 MW and 1,01,200 MW per year, NCDEX Chief Business Officer (CBO) U Kaushik informed.

Furthermore, in line with the country capping individual foreign holding in commodity bourses at five per cent in January, the Goldman Sachs and Intercontinental Exchange (ICE) had been advised to bring down their holding in the NCDEX before June 30, 2009, Mr Ramaseshan informed.

The MD&CEO said currently Goldman Sachs and ICE held seven per cent and eight per cent stakes in the NCDEX respectively, adding other shareholders of the commodity exchange were Canara Bank, CRISIL Ltd, Indian Farmers Fertilisers Cooperative Ltd (IFFCO), Life Insurance Corporation of India(LIC), NABARD, NSE and Punjab National Bank.

At present, NCDEX offers an array of 54 different commodities for trading which included agriculture, bullion, energy, metals (ferrous and non-ferrous metals) and plastics, with around 80-85 per cent of the volumes coming from farm commodities.

The exchange currently receives around three lakh orders which converted to almost one lakh trades a day through 900 Trading and Clearing members located in over 650 centres in India.

'' The daily turnover of NCDEX stands at Rs 2,500 crore in terms of volume,'' Mr Ramaseshan further informed.


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