In an interview with Power Line, Harish Saran, Managing Director, Hindustan Power Exchange Limited (HPX), shared his perspective on the evolution of India’s power trading market from a bilateral and spot-centric structure to a deeper, more competitive and technology-intensive marketplace, driven by renewable energy integration, rising demand supply volatility, and proposed regulatory reforms such as market coupling. He also discussed HPX’s immediate priorities across product design and trading technology. Edited excerpts…
What is your perspective on the evolution of the power trading market and the role HPX will play over the next three to five years?
India’s power trading market is poised for a fundamental transformation from being predominantly bilateral and spot centric to deep, competitive, and technology-intensive. This evolution will be driven by the rapid expansion of short-term and long-duration market products, large-scale integration of renewable energy, end-to-end digitalisation of market processes, rising demand-supply volatility, and far-reaching policy and regulatory reforms such as market coupling. These developments will collectively reshape how electricity is priced, procured, and optimised across the national grid.
Over the next three to five years, power exchanges will emerge as the backbone of efficient price discovery, advanced risk management, and real-time grid optimisation. During this transformative phase, HPX aspires to be a decisive force by accelerating market innovation, elevating operational efficiency, and reinforcing trust and transparency among participants. HPX’s strategic focus will be on deepening liquidity, expanding participation across generators, discoms, open access consumers, and new-age market players, as well as designing market products that cater to the growing need for flexibility, responsiveness, and reliability in power procurement.
Beyond conventional power trading, HPX aims to be at the forefront of next-generation markets, including the rapidly expanding green power segments, battery energy storage system (BESS)-based trading, and the emerging carbon and environmental attribute markets. As India advances towards its ambitious target of 500 GW of renewable capacity by 2030, HPX’s role will increasingly be defined by its ability to seamlessly integrate intermittent renewable energy generation, flexible storage assets and carbon-linked instruments into a high frequency, five-minute market architecture.
What are HPX’s immediate priorities in terms of products, participation and market share?
HPX’s immediate priorities are anchored around building a resilient, scalable and future-ready market ecosystem, with a clear focus on quality-led growth rather than volume-driven expansion.
First, in terms of product strategy, HPX will prioritise deepening liquidity and price efficiency in core segments such as the day-ahead and term-ahead markets, while accelerating the development and adoption of new products aligned with evolving system requirements such as flexibility-oriented contracts, renewable-linked products and storage-enabling mechanisms. The objective is to ensure that HPX products are not only tradable but system relevant, supporting real-world grid and procurement challenges. Second, regarding participation, the company will intensify efforts to broaden and diversify its participant base by deepening engagement with discoms, generators, captive power producers, renewable energy players and large open access consumers. Special emphasis will be placed on onboarding and enabling first-time exchange participants through simplified processes, awareness initiatives, and market design that lowers entry barriers and enhances confidence in exchange-based procurement. Third, on market share creation, HPX’s strategy is firmly centred on value-led growth. Rather than pursuing volumes in isolation, the focus will be on building sustainable liquidity through competitive price discovery, robust market outcomes and consistent operational excellence. By delivering reliable execution, transparency and participant-centric solutions, the company aims to organically expand market share and establish itself as a trusted platform for both short-term optimisation and long-term market evolution.
How has HPX performed so far in terms of traded volumes, liquidity and participant mix, and which market segments are seeing the strongest traction?
Since its launch, HPX has demonstrated steady growth across traded volumes, liquidity and participant onboarding. The exchange has crossed the milestone of 1,000 registered participants, reflecting increasing market confidence and a well-diversified participant base comprising discoms, generators, traders, open access consumers and renewable energy participants.
In terms of market activity, the total volume of electricity traded on the platform has crossed 29 BUs, while REC trading volumes have reached above 6.5 million certificates, alongside about 300,000 energy saving certificates (ESCerts) transacted to date. Liquidity has strengthened consistently on a month-on-month basis, supported by repeat participation and improving bid depth.
Strong traction has been observed in short-duration power contracts, particularly in segments where participants value transparent price discovery and operational flexibility. At the same time, HPX has been steadily expanding its footprint in environmental markets, with growing participation from obligated entities and renewable energy generators contributing to sustained liquidity in the REC and ESCert segments.
How does HPX differentiate itself in terms of product design and technology?
HPX differentiates itself through a strongly participant-centric approach to both product design and technology, ensuring that market innovation translates into practical value for users.
It focuses on simplicity, transparency, and ease of use, while ensuring close alignment with the operational and commercial realities of buyers and sellers. Products are designed to address real system needs, such as flexibility, reliability and efficient procurement. HPX operates a robust, scalable and secure trading infrastructure built to support high transaction volumes and evolving market requirements. The platform delivers low-latency performance, high availability and seamless system integration, enabling participants to transact with confidence even in time-sensitive market conditions. Ease of access, operational reliability and end-to-end transparency remain central to the company’s value proposition, positioning it as a dependable and future-ready exchange in an increasingly dynamic power market.
What are the key challenges for the growth of short-term and exchange-based trading?
Some of the key challenges impacting the growth of short-term and exchange-based power trading are persistent financial stress and payment security concerns in the distribution sector, which affect risk appetite and participation. Legacy contracting and rigid procurement practices continue to limit flexibility and slow the transition towards market-based optimisation. Awareness and capability gaps among smaller utilities and market participants constrain wider adoption of exchange mechanisms. Transmission constraints, along with evolving regulatory frameworks and procedural complexity, also pose operational challenges to seamless market participation from renewable-rich states.
How will market coupling impact competition amongst exchanges and the overall HPX strategy?
Market coupling is expected to significantly enhance market efficiency by enabling uniform price discovery and optimal utilisation of transmission resources across the power exchanges. While it will intensify competition on execution and service quality, it will also expand the overall size, depth and credibility of the exchange-based power market.
HPX views market coupling as a constructive and forward-looking structural reform proposed by the CERC. In a coupled market environment, price differentiation will reduce, making operational reliability, the speed of execution and participant experience the primary drivers of competitiveness.
Accordingly, HPX’s strategy will focus on delivering operational excellence, superior participant service and continued product innovation, particularly in segments beyond the coupled markets, such as the term-ahead, green products, storage-linked contracts and emerging environmental markets.
As market coupling matures, differentiation among exchanges will increasingly be defined by value-added services, market responsiveness, and the ability to anticipate and address participant needs, rather than by price outcomes alone.
What is your medium- to long-term outlook for the role of power exchanges in India’s power sector and where do you see HPX in that landscape by 2030?
By 2030, the power exchanges are expected to emerge as a core market infrastructure in India’s power sector, underpinning transparent price discovery, efficient system operation, and large-scale integration of renewable energy.
With increasing renewable energy penetration, shorter scheduling and settlement cycles, and proposed reforms such as market coupling, exchanges will play a central role in flexibility procurement, real-time balancing, and merit-order optimisation at a national level. The power exchanges will increasingly act as the primary interface between policy objectives and operational execution, translating regulatory reforms into efficient market outcomes.
In this evolving landscape, HPX aspires to position itself as a trusted, technology-led, and innovation-driven exchange, offering deep and resilient liquidity across key market segments. It will focus on broadening and diversifying participation across generators, discoms, renewable energy players, storage providers, open access consumers and emerging market participants. The long-term strategy is anchored in sustainable growth, operational credibility, strong governance and measurable value creation for all stakeholders across the power ecosystem. N
