The concept of an electricity trading platform in a power-starved country like India has been under attack since the very beginning. Jayant Deo, managing director and chief executive officer of Indian Energy Exchange (IEX), the country's first ever online power trading platform that was launched on Wednesday, speaks to Chaganti Sarita on what the initiative means to the economy. Excerpts:

n The idea of an exchange has always been associated with a surplus situation. Do you think operating a power exchange is a feasible idea in India given that the country faces huge supply crunch?

Shortages have been there throughout. The very purpose of this power exchange is to attract generation capacities. Any surplus in any region can now be transferred to a region where there is scarcity at a short notice. It is essential for a market-driven economy.

n What would the exchange mean for a common man?

For a consumer, a power exchange would mean availability of electricity at competitive rates. The exchange will give a common platform to the buyers and sellers by to trade electricity in an auction-based system, leading to a national level transparent price discovery. Besides, creating a uniform a uniform market clearing price, IEX would help in improving environment that will in turn encourage new investment in generation as well as transmission.

n Do you feel that infrastructure bottlenecks such as congestions in the transmission system can upset your plans?

Infrastructure is already in place for wheeling power from one place to another. We have a national grid. Moreover, the quantity of electricity that is being traded in open market is only three per cent of the over all installed capacity of the country. The bottlenecks would be overcome as the generation capacity expands.

n What are the future offerings you plan to introduce?

We have just started with day-ahead market, where members place their orders for each hour of the next day. Other products like week-ahead, month-ahead, season-ahead, quarter-ahead, year-ahead and three-year ahead contracts would be launched in due time depending on the demand.

n What capacities are being traded on the exchange and with how many members?

The first day response for power on the exchange stood at 13,000 mega watt hours, which has now crossed 30,000 mega watt hours mark in 20 days. IEX has 50 members at present and adding 50 more should be the goal in front of us. The price has been in the range of Rs 6.5 to Rs 8 a unit. IEX is promoted by the likes of Financial Technologies, PTC India, Tata Power, Rural Electrification Corporation, Reliance Energy, and IDFC among others.

n Are there plans for any stake divestment to accommodate more investors?

The exchange has just begun operations. There are no plans for any stake divestment in the near future.