Power ministry asks CERC to begin the process for market coupling

The power ministry has asked the Central Electricity Regulatory Commission (CERC) to initiate market coupling process of multiple power exchanges, which could make prices uniform across exchanges. A number of stakeholders had reached out to the ministry and it has decided to go ahead with the process, a letter from the ministry to the regulator said. In this form of discovering prices, bids are accepted in all power exchanges, brought together to a market coupling operator that merges them and runs a single combined solution.

India has three power transfers - India Energy Exchange (IEX), Hindustan Power Exchange (HPX) and Power Exchange India (PXI). IEX commands 99.9% of the volume traded on the exchanges. In the current state of market share, coupling does not make much difference, an industry source and a government official said. However, the market coupling could bring a possibility for different exchanges to gain market share in the day-ahead and real-time trades.

"This will provide a fillip to the level of service in the power market, and ensure better transparency and uniform cost discovery across exchanges. The move is also expected to bring down the power tariff in the country significantly," Naveen Singh, head, of business growth at Hindustan Power Exchange said. In India we have a voluntary market framework where all exchanges have equal opportunities, Rohit Bajaj, head of business development, regulatory affairs & strategy, IEX, said. Market coupling is done to a couple of different markets operating in different geographies which is not applicable in our case, he added.

"All the regions have been coupled, and we have one market and one price. The government has requested CERC to initiate the process of consultation and finalization of construct. I am sure all aspects like the objective of coupling and need in the current market structure will be examined," he said. The move would make more impact when mixed with the proposed market-based economic dispatch, which is a centralized model for scheduling and dispatching electricity, sources said. The market-based economic dispatch ensures that the cheapest power-generating resources in the country will be supplied to meet the overall demand and result in saving for the consumers and distributors.