Risks and hedging avenues for power market participants: A novel framework and application to India

IF 2.2 Q1 Social Sciences

Electricity Journal Pub Date : 2025-12-01 Epub Date: 2025-11-06 DOI:10.1016/j.tej.2025.107517

Anoop Singh , Gaurav Gupta , Mrudul Shivhare , Shreeyash Nitin Malode , Vikas Sangwan , Madhav Sharma , Rohit Khare

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引用次数: 0

Abstract

The evolution of India’s power market, driven by rising share of renewable energy and changes in the regulatory and policy environment, has exposed the sector stakeholders to new financial and operational risks. However, a comprehensive framework to systematically identify these risks and map them to effective hedging strategies is lacking. This study addresses this gap by developing and applying the novel Power Market Three-Dimensional Stakeholder Risk Identification and Hedging Avenues (PM-3D-SRIHA) framework. Utilizing a multi-stage methodology involving literature review, stakeholder consultation, and focused expert survey, this research identifies and ranks key risks for seven stakeholder groups. Key findings highlight persistent challenges such as payment risk for distribution companies (Discoms) and fuel supply risk for thermal generators. The study also ranks the most effective hedging avenues, identifying role for prepaid meters, diversified fuel supply, and electricity derivatives to address some of the major risks. The resulting framework provides actionable insights for market participants and offers regulatory and policy recommendations to enhance market stability and financial resilience in India's dynamic power sector.

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电力市场参与者的风险和对冲途径：一个新的框架及其在印度的应用

在可再生能源份额不断上升以及监管和政策环境变化的推动下，印度电力市场的演变使行业利益相关者面临新的财务和运营风险。然而，缺乏一个全面的框架来系统地识别这些风险并将其映射到有效的对冲策略中。本研究通过开发和应用新的电力市场三维利益相关者风险识别和对冲途径（PM-3D-SRIHA）框架来解决这一差距。本研究采用包括文献综述、利益相关者咨询和重点专家调查在内的多阶段方法，确定了七个利益相关者群体的主要风险并对其进行了排名。主要调查结果强调了持续存在的挑战，如分销公司（Discoms）的支付风险和火力发电机的燃料供应风险。该研究还对最有效的对冲途径进行了排名，确定了预付费电表、多样化燃料供应和电力衍生品在应对一些主要风险方面的作用。由此产生的框架为市场参与者提供了可行的见解，并提供了监管和政策建议，以增强印度动态电力部门的市场稳定性和金融弹性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Electricity Journal Business, Management and Accounting-Business and International Management

CiteScore

5.80

自引率

0.00%

发文量

审稿时长

31 days

期刊介绍： The Electricity Journal is the leading journal in electric power policy. The journal deals primarily with fuel diversity and the energy mix needed for optimal energy market performance, and therefore covers the full spectrum of energy, from coal, nuclear, natural gas and oil, to renewable energy sources including hydro, solar, geothermal and wind power. Recently, the journal has been publishing in emerging areas including energy storage, microgrid strategies, dynamic pricing, cyber security, climate change, cap and trade, distributed generation, net metering, transmission and generation market dynamics. The Electricity Journal aims to bring together the most thoughtful and influential thinkers globally from across industry, practitioners, government, policymakers and academia. The Editorial Advisory Board is comprised of electric industry thought leaders who have served as regulators, consultants, litigators, and market advocates. Their collective experience helps ensure that the most relevant and thought-provoking issues are presented to our readers, and helps navigate the emerging shape and design of the electricity/energy industry.