Archive · 1 Aug 2025
CERC Introduces Market Coupling: A Solution in Search of a Problem?
Imagine a marketplace for electricity where different exchanges set different prices.
Market coupling is like combining all those marketplaces into one big one.
This means everyone buying and selling electricity will agree on one price.
The plan is to first do this for electricity traded the next day.
However, some think this change may not be helpful and could benefit specific exchanges.
CERC initiated 'market coupling' of electricity prices on power exchanges.
Market coupling aims to create a common price for electricity traded across exchanges.
The plan will initially apply to the Day-ahead market (DAM).
Implementation is expected by January 2026.
The author is skeptical of the benefits and suggests it favors certain exchanges.
- Who
- The Central Electricity Regulatory Commission (CERC).
- What
- CERC's initiation of 'market coupling' of electricity prices.
- When
- Targeted for January 2026 for the Day-ahead market (DAM).
- Where
- In the Indian power market.
- Why
- Unclear, according to the author; CERC cites increased competition and efficiency.
Author's Concerns
CERC's Stated Goals
Competition Impact
Author's Concerns
Market coupling will not increase competition because IEX already dominates the market.
CERC's Stated Goals
CERC says market coupling intends to increase competition and enhance transmission efficiency.
Market Impact
Author's Concerns
Market coupling will benefit PXIL and HEX.
CERC's Stated Goals
The author suggests that CERC should focus on longer-term contracts and derivatives.
- Market Coupling Definition
- Common price for electricity traded across exchanges.
- DAM Implementation Target
- January 2026
- Electricity Market Share (IEX)
- 99% in DAM and RTM, 50% in TAM
- Shadow Pilot Study (DAM)
- Price convergence improved 0.3%; volume increased 0.2%
