The National Stock Exchange (NSE) is set to roll out electricity futures contracts within the next two to three weeks, offering a new risk management tool for power producers, buyers, traders, and industrial consumers.

“All necessary approvals are in place. We’re in active discussions with stakeholders and will announce the launch date shortly,” said Harish K Ahuja, NSE’s head of sustainability, power, carbon markets, and listing. He added that the contracts would go live on the exchange a few days after the launch announcement.

The upcoming product will feature monthly futures contracts available year-round. Each contract will start on the first business day of a month and expire a day before the month ends. The lot size for each futures contract will be 50 megawatt hours (MWh), equivalent to 50,000 units of electricity.

To encourage participation, NSE Chief Business Development Officer Sriram Krishnan said the exchange will waive transaction charges for the first six months following the launch.

The contract price will be based on the 30-day weighted average spot prices from three energy exchanges: Indian Energy Exchange (IEX), Hindustan Power Exchange (HPX), and HPL Electric and Power Ltd. The tick size is set at Re 1 per MWh, with a maximum order size of 2,500 MWh.

NSE is also evaluating the introduction of contracts for difference (CfDs) to help renewable energy projects ensure more stable revenues.

The electricity futures contract received final approval from the Securities and Exchange Board of India (SEBI) last month.

With India targeting net-zero emissions by 2070, the push for a vibrant electricity derivatives market is seen as a critical step. According to NITI Aayog, India will need over USD 250 billion in annual climate investment to meet its sustainability goals. Renewable energy is projected to account for over 50 per cent of installed power capacity by 2030.

NSE was the first Indian exchange to establish an electricity trading platform, having launched Power Exchange India Limited (PXIL) in 2008. The bourse now aims to build a deep and integrated electricity derivatives ecosystem to support the energy transition.