Key Numbers:

 Of the total volume of electricity transacted through power exchanges (6657 MU),
55.44% of the volume was transacted in DAM (including G-DAM), followed by 25.21% in
Term Ahead Market (TAM) (including G-TAM) and 19.35% in RTM.
 The weighted average sale price of electricity transacted through trading licensees was
₹6.22/kWh. As per the CERC Regulations 2020, the trading licensees are allowed to
charge trading margin of not less than 0 paise/kWh and upto 7 paise/kWh. The
weighted average trading margin charged by the trading licensees for bilateral
transactions during the month was ₹0.035/kWh.

Types of Memberships:

1. Facilitator Member: An entity who is neither a grid connected entity nor holding a valid
and subsisting Interstate Trading License. The Facilitator Member shall not be entitled to
trade for itself but shall have the right to act for and/on behalf of its clients and cannot
clear contracts on the Exchange for such clients.

Facilitator Member can have clients which can be categorized as:

 Grid-connected Client

 Trader Client
A Facilitator Member shall also be entitled to undertake transactions on the Renewable Energy
Certificates (REC) and Energy Saving Certificates (ESCerts).

 The minimum net worth requirement for the purpose of membership is 150 Lakhs
(~USD 200K).

2. Trader Member: An entity who has been granted license for trading in electricity under
Trading License Regulations, 2020 and admitted as a member of the Power Exchange
shall be called a Trader Member. Trader Member shall trade and clear on its own
account or trade and clear on behalf of its client. Provided that a Trader Member or any
of its Associates shall not be a Facilitator Member.

A Trader Member shall also be entitled to undertake transactions on the Renewable Energy
Certificates (REC) and Energy Saving Certificates (ESCerts).
 The minimum net worth requirement for the purpose of membership is 150 Lakhs
(~USD 200K).
Cost Statement

Expenses Amount (in INR) Amount (in USD)

Security Deposit (Refundable) 25,00,000 30,500
Admission Fees (One Time NR) 35,00,000 42,700
Registration Fees (One Time NR) 10,000 122
Annual Subscription Fees 5,00,000 6,098
Office Expenses 19,00,000 19,500
Rent 15,00,000
Maintenance(Electricity, Internet, 4,00,000
Housekeeping, Refreshments)
Salaries
Prime Trader
Support Staff
Total 1,10,00,000 1,35,500

Breakeven Statement (approx.):

Particulars Scenario 1 Scenario 2

Transaction Cost/unit 0.02 INR 0.02 INR
Commission/unit 0.035 (Average) 0.07 (Maximum)
Client subscription cost 5,00,000 INR (assuming 5 clients) 5,00,000 INR (5 clients)
Number of Transactions 765 MU 230 MU
Years to Breakeven ~10 years ** ~3 years **

** Assumption: Trade 50,000 units per client per day (300 days/year) for 5 clients
Indian Energy Exchange (IEX)

Hindustan Power Exchange (HPX)

MCX Member costs as Trading-cum-Clearing Member: ~USD 150K

MCX Member cost as Trading Member: ~95K

Additional Information:

 There were 48 trading licensees as of February 2023. Of which, 30 trading licensees

were engaged in short-term trading.
 The top 5 trading licensees, namely PTC India Ltd., NTPC Vidyut Vyapar Nigam Ltd.,
Adani Enterprises Ltd., Tata Power Trading Company (P) Ltd. and Manikaran Power Ltd.
had a share of 81.27% in the total volume of electricity traded by all the licensees.
 The Herfindahl Hirschman Index computed for the volume of electricity traded by
trading licensees was 0.2035, indicating moderate concentration (relatively less
competition) of market power.
 The National Stock Exchange is exploring opportunities in electricity derivatives and the
voluntary carbon credit (VCC) market to deepen its product portfolio as part of its
transformation into a multi-asset stock exchange. It is estimated to be worth USD 150
million.

 One REC is equivalent to 1 MWh (Priced ~₹1000/MWh) electricity injected into the grid
from renewable energy sources. The REC is exchanged only in the power exchanges
approved by CERC within the band of a floor price and forbearance (ceiling) price as
notified by CERC from time to time.