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Central Electricity Regulatory Commission Cleared to Draft Power Market Coupling Norms After Tribunal Dismisses IEX Plea

The Appellate Tribunal for Electricity (APTEL) has permitted the Central Electricity Regulatory Commission (CERC) to move forward with framing regulations on power market coupling, rejecting a petition filed by the Indian Energy Exchange (IEX). The tribunal ruled that the appeal was premature, noting that the detailed regulations on market coupling are yet to be finalized.

Market coupling is designed to establish a uniform price discovery mechanism across power exchanges, replacing separate exchange-based price determination with a common clearing price. The objective is to improve efficiency, enhance transparency, and reduce price disparities across platforms.

In July, CERC had issued a suo motu order proposing a phased implementation of market coupling—beginning with the day-ahead market from January 2026 and extending to the real-time market after gaining operational experience. With the tribunal’s decision, the regulator is now expected to proceed with drafting the regulatory framework.

IEX, which commands a dominant share of the electricity trading market, had challenged the move, arguing that the proposed structure could disrupt the existing multi-exchange model that has evolved over nearly two decades. The exchange maintained that the order was introduced without adequate evidence of benefits and could primarily result in redistribution of market share rather than structural improvement.

Apart from IEX, the country’s power trading ecosystem includes Power Exchange India Limited and Hindustan Power Exchange. Industry observers suggest that a unified price discovery system may level the playing field across exchanges, though it could dilute the competitive advantage currently enjoyed by the leading platform.

While critics argue that the absence of complementary mechanisms such as market-based economic dispatch makes coupling unnecessary at this stage, proponents believe the reform could align India’s electricity market structure with global best practices by reducing price fragmentation and strengthening overall market efficiency.