Shankar, RibhuRibhuShankarBajaj, Parminder KaurParminder KaurBajajPindoriya, Naran M.Naran M.Pindoriya2026-02-112026-02-112025-12-0710.1109/ICPS67276.2025.11364842https://repository.iitgn.ac.in/handle/IITG2025/34619India's electricity market, centered around the volatile Day-Ahead Market, presents significant financial risk to participants. The recent introduction of electricity futures offers a potential hedging solution, but adoption is hindered by a nascent market structure and a critical lack of liquidity beyond the front-month contract. This study provides a quantitative, simulation-based evaluation of the efficacy of these new instruments. A synthetic historical futures price series is constructed for a forty-month period based on an analysis of observed market premiums in both contango and backwardation states. The performance of three distinct hedging archetypes, Conservative, Moderate, and Aggressive, is then back-tested against historical spot price data. A bootstrap statistical test is employed to validate the robustness of the findings. The results demonstrate that dynamic hedging strategies yield statistically significant mean monthly savings of approximately one to one-point-five percent. The Moderate, volatility-triggered strategy is identified as optimal from a risk-adjusted perspective, delivering both cost savings and the highest degree of cost stability. This paper provides the first empirical evidence to motivate broader participation from stakeholders, arguing that active, data-driven hedging is a viable strategy to mitigate risk and can help overcome the initial liquidity barriers in the Indian electricity derivatives market.en-USElectricity futuresHedgingRisk managementPrice volatilitySimulationIndian power marketDISCOMsConference Paper