MCX to Launch Power Futures from July 10

Mumbai

India’s leading commodity exchange, MCX, will launch its electricity futures contract starting July 10. This move aims to provide better tools for managing price risks in the fast-changing power sector.

MCX MD and CEO Praveena Rai stated that the new contract will help deepen and structure India’s energy markets while supporting a more sustainable, market-based electricity pricing system. The product received SEBI’s approval in June.

The contract will have a daily price movement limit of 6%, which can extend to 9% on volatile days. Traders must maintain an initial margin of at least 10% or more, depending on market volatility. Client positions will be restricted to 3 lakh MWh or 5% of open interest, whichever is higher.

Initially, four contracts for the current month and three for upcoming months will be offered. Trading begins on the first business day of the month and ends a day before the contract’s expiry.

Currently, the Indian Energy Exchange (IEX) dominates over 90% of the electricity futures market. MCX aims to offer a competitive edge by linking its contracts with spot prices to bring more flexibility.

With the power sector growing rapidly and experiencing price fluctuations due to fuel costs and demand changes, this futures contract is expected to bring stability. Experts believe it will help producers and investors manage risks better and plan ahead. Overall, this launch marks a step toward building a robust, future-ready energy market in India.