The power exchange of The National Commodity & Derivatives Exchange (NCDEX) will shortly take the real form.

The regulator, Central Electricity Regulatory Commission (CERC) has cleared its plan to establish a power exchange.

The stock market functionaries anticipate bourse to go functional by the next four to five months, before technical issues are sorted out and rules are framed.

NCDEX submitted its proposal in 2007 to CERC for allowing setting up of the exchange, which is a joint venture (JV) between National Stock Exchange (NSE) and NCDEX.

Elaborating further on the recent development, Unupom Kausik, chief business officer of NCDEX, stated that they were talking to various power companies for possible tie-ups.

He, however, said ‘No’ to share the names of possible stakeholders.

Kaushik stated, “NCDEX has been successfully running the commodity exchange business. We are confident that it will run the power exchange as a smooth, impartial and transparent business,” he said.

After approval from CERC, the exchange will make guidelines for it.

"Once the guidelines are set, we will submit them to regulator for approval. We expect the power exchange to become functional in next five months.”

A power exchange functions on the lines of commodity exchanges and offers up a platform for buyers, sellers and traders of electricity to take part in spot and forward contracts. It would also offer a payment security mechanism to buyers and sellers