India to start market coupling for power exchanges from January
Market coupling is an economic model used in energy markets to create a single, uniform price for electricity across different trading platforms or exchanges.
The regulator's move is aimed at improving price discovery and system efficiency.
The Central Electricity Regulatory Commission (CERC) said in an order that the day-ahead market segment of all power exchanges will be coupled using a common system.
Under the new system, power exchanges will take turns acting as the market coupling operator. Grid-India will serve as a backup and audit operator.
The CERC said it would consider coupling the real-time market and other segments like the term-ahead market at a later stage, after more pilot runs and consultations.
All power exchanges have been directed to share data with Grid-India and the CERC to support the rollout, the regulator said.
The CERC said it would issue further orders based on the progress of implementation.
Currently, the Indian Energy Exchange (IIAN.NS), opens new tab is the country's most prominent platform for electricity spot price discovery.
However, with the introduction of market coupling, other power exchanges will also act as market couplers.
Analysts say this could reduce the IEX's dominance in price discovery and affect its market share.
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