Power Exchange aims to launch carbon-credit trading platform by Q2FY25: MD

  • The company is looking at onboarding more companies and businesses as members in order to achieve higher penetration, as carbon trading starts in the country.

Rituraj Baruah
First Published14 Mar 2024, 08:29 PM IST
The company is looking at onboarding more companies and businesses as members in order to achieve higher penetration.
The company is looking at onboarding more companies and businesses as members in order to achieve higher penetration.

Power Exchange India Ltd (PXIL), promoted by NSE and NCDEX, aims to launch its carbon-credit trading platform by the second quarter of next fiscal (FY25) year as it is already working on the technology for the product, its managing director and chief executive Satyajit Ganguly said.

In an interview, Ganguly said that as the regulations for such platforms are likely to be rolled out by the second quarter, the exchange would be ready by then with its technology and also complete its educational workshops for industry participants across sectors to get them on board the platform and trade in carbon credits.

"We have already started working on the technology. Our primary tests are all okay. (Existing) ESCerts (energy saving certificates) have already got the similar technology. It is already running successfully. What we have to do now is testing with our clients, which we want to do as the regulations come in. So, we are ready. We expect (the regulations to come in) by Q2. We will be able to do it much before that," he said.

The company is looking at onboarding more companies and businesses as members in order to achieve higher penetration, as carbon trading starts in the country.

"I think technology-wise we are ready. Business-wise, connect-wise by quarter one (Q1) we will be completely ready. That is where we are right now. It’s a fully automated technology. Initially, it will take some time to educate the market, have workshops. We have got sufficient budget for that. We will have workshops in different states like Punjab, which has steel pockets, Tamil Nadu, which has textile industry etc. Maybe it (workshops) will start in Q1 because it has to be done before the regulations come. In Q2, it has to start, but then it also depends on the regulations," he said.

The Bureau of Energy Efficiency (BEE) last year came up with the Carbon Market Trading Scheme. However, the power ministry has directed the bureau to develop its own standards for carbon trading and also allow non-obligated entities to generate carbon credits.

The parliament had in 2022 paved the way for setting up of carbon markets in the country with the passage of the Energy Conservation (Amendment) Bill, 2022. Carbon markets are trading systems in which carbon credits are sold and bought. Companies or individuals can use carbon markets to compensate for their greenhouse gas emissions by purchasing carbon credits from entities that have reduced their greenhouse gas emissions and have higher credits. All the three power exchanges in the country - Indian Energy Exchange Ltd, Power Exchange India Ltd, and Hindustan Power Exchange Ltd - are expected to develop their own carbon-credit trading platforms.

Speaking of new products, Ganguly said that in line with the government's focus on resource adequacy for power distribution companies (discoms), PXIL is working on a product for capacity market which is expected to launch in the second quarter of the next fiscal year.

The exchange is working on a platform for intra-state power transactions, he added.

"In Maharashtra, there are four discoms and a few IPPs (independent power producers). They all go to the national market to purchase power. And they have got huge demand, around 30,000 MW is the demand in Maharashtra. We have seen that 5,000-8,000 MW is the internal IPP generation, but once you go to the national market directly, then the transmission charges go up because you have to pay CTU (central transmission utility) charge also, whereas inside the state you don't need to pay that."

"So, the power becomes cheaper. Loss will also come down because the transaction is done internally only, and transmission charges will come down," he said. Initially, the product would be launched for Maharashta, followed by Gujarat, he added.

The exchange also plans to come up with a new renewable energy trading platform which would have a contract for difference between the generator and discom, thereby helping generate more demand for renewable power.

Regarding the Central Electricity Regulatory Commission's (CERC) directive to the Grid Controller of India to implement market coupling of Indian power exchanges on a shadow pilot basis, he said that the move would help bring competitiveness among the exchanges, improving volumes and enhancing services.

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First Published:14 Mar 2024, 08:29 PM IST
HomeIndustryPower Exchange aims to launch carbon-credit trading platform by Q2FY25: MD

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