In response to the escalating power demand in India, the Indian Gas Exchange (IGX) has introduced groundbreaking gas contracts tailored specifically for the power sector. The move is aimed at addressing the increasing need for flexibility in demand while streamlining the delivery process. IGX’s innovative contracts offer fixed prices and various delivery options, including weekly, fortnightly, and monthly, empowering power companies with the flexibility to trade and consume gas based on their operational requirements.
Rajesh K Mediratta, MD & CEO of IGX, highlighted the significance of these power-sector-friendly contracts in light of the anticipated surge in energy demand during the upcoming summer season. He expressed optimism about the potential of spot gas markets to help meet the burgeoning power demand, which is expected to reach 255 GW this summer, up from 241 GW last year. Mediratta emphasised the strategic advantage of offering gas prices below $10/MMBtu, foreseeing increased gas usage in the power sector.
The special contracts, designed to provide flexibility in delivery timelines while maintaining a fixed price, have garnered praise from industry experts. Ghanshyam Prasad, Chairperson of the Central Electricity Authority (CEA), commended IGX for introducing a contract tailored to the unique needs of gas-based power plants. He noted that the contract’s design aligns with the specific operational requirements of gas-powered facilities.
PK Mishra, Executive Director – Fuels at NTPC, lauded IGX for its timely solution to the challenges faced by gas power plants. Acknowledging the dynamic nature of the energy sector, Mishra expressed confidence that IGX’s new contract would facilitate the efficient operation of gas-based power plants, especially with an eye on the anticipated increase in gas demand over the next five to six years.
The newly introduced contract not only addresses the specific needs of the power sector but also opens up new opportunities for suppliers. With the option to sell cumulative volumes at market-discovered prices, suppliers can actively participate in a more dynamic and efficient marketplace. This development marks a significant step towards creating a resilient and adaptive energy ecosystem in India.
