IGX unveils specialised power contracts to address soaring energy demand

Power-friendly contracts offer seamless trading, fixed prices, and flexible delivery options, catering to evolving energy needs.

The Indian Gas Exchange (IGX) has introduced gas contracts tailored for the power sector to effectively address flexible demand and streamline the delivery process. Emphasising seamless trading and a fixed price throughout the contract duration, IGX has devised power-sector-friendly contracts that provide weekly, fortnightly, and monthly delivery options. This allows power companies the flexibility to utilise the entire quantity on any day within the contractual period. Delivery points currently encompass Dahej and Hazira, with provisions to include additional terminals based on demand.

Speaking on the launch, Rajesh K Mediratta, MD & CEO, IGX said, “In this summer, gas prices can touch single digit and spot gas markets can help meet burgeoning power demand, which touched 241 GW last year and expected to touch 255GW this summer. We see huge possibilities, since already power prices are touching ₹ 10/kwh for most time and in summer it may be for almost 24hr in a day. Gas prices less than $10/MMBtu will enhance gas usage for the power sector. Currently, Gas to Power demand is 14 percent, which can jump significantly in 2024. And in view of the upcoming peak season and challenges, IGX is introducing a special contract to provide flexibility in delivery timelines while maintaining a fixed price, addressing the specific needs of these power plants. 

Ghanshyam Prasad, Chairperson, Central Electricity Authority (CEA) in his keynote address said, “The newly introduced contract by IGX would be beneficial to power companies as it is designed based on the peculiar working of a gas-based power plant. With some changes in gas transportation capacity booking timelines, this contract should be able to help run gas-based power plants by sourcing gas from IGX at competitive prices.”

Giving the special address, PK Mishra, Executive Director – Fuels, NTPC said, “I commend IGX for launching a gas contract that addresses the dynamic needs of the power sector. NTPC has swiftly adapted to market changes, and IGX’s new contract comes as a timely solution for gas power plants facing challenges. With an eye on the future, anticipating increased gas demand in the next five to six years, IGX’s product aligns with the evolving energy landscape.” 

The introduction of this specialised contract not only caters to the unique needs of the power sector but also opens up new opportunities for suppliers. They can now explore selling cumulative volumes at market-discovered prices, fostering a more dynamic and efficient marketplace.