Exchange

2.1 POWER TRADING ARRANGEMENTS
Power trading contracts exist in different types of formats such as
a) Bilateral trading   b) Power trading through intermediaries   c) Power exchanges

c) Power Exchange:
A Power exchange facilitates equitable, transparent and efficient trading of power. It bridges the demand supply mismatch by bringing larger players together for buying and selling in an auction- based system. While maintaining complete anonymity, this mechanism resolves the constraints in the earlier formats, viz., search costs, asymmetric information, transaction costs, and counter-party. All over the world, there are established international exchanges such as Nord Pool, and PJM, which are providing standardized contracts in the form of spot, forwards, futures and options.





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