A Power Exchange is an electronic platform where bulk electricity is traded transparently, primarily between generators, Discoms, traders, and large consumers. In contrast, a DISCOM (Distribution Company) is responsible for delivering electricity from the transmission network to end consumers households, businesses, and industries.
DISCOM are regulated entities that buy electricity in bulk mostly via long-term Power Purchase Agreements (PPAs) and distribute it to the final users in a given area or state.
They handle billing, maintenance of distribution lines, metering, and customer relations.
DISCOM can also participate in power trading for example, buying short-term electricity on power exchanges to fill demand-supply gaps or selling surplus power.
A power exchange like IEX, PXIL, or HPX is a neutral marketplace that matches buyers and sellers of electricity on a real-time or day-ahead basis.
Generators can offer their surplus electricity and buyers (mainly DISCOM, traders, and open access consumers) can bid for it via a transparent, competitive process.
Power exchanges offer flexibility: buyers can purchase electricity for a 15-minute time slot to a few days ahead, adapting quickly to changes in demand.