Grid India seeks steering panel for market coupling

Grid Controller of India Ltd (Grid India) has proposed that market coupling operations be led by a steering committee instead of a single-operator model suggested by the power sector regulator in draft norms.

Market coupling combines bids from all power exchanges into a single market, discovering a uniform electricity price with the aim of improving efficiency. In July last year, the Central Electricity Regulatory Commission (CERC) issued a suo motu order to initiate market coupling in the sector.

India has three power exchanges - Indian Energy Exchange Ltd, Power Exchange India Ltd and Hindustan Power Exchange Ltd.

In its submission to the regulator, which issued the draft CERC (Power Market) (Second Amendment) Regulations, 2026 in April, Grid India said the objective of an efficient and transparent system can be best served through a steering committee of stakeholders, including CERC, Grid India, power exchanges, external auditors and market monitors.

In the draft norms, CERC had proposed Grid India as the sole market coupling operator (MCO).

The grid operator pointed to the European experience, where a round-robin implementation supported by a steering committee has been adopted. The round-robin method is a framework in which competing power exchanges take turns acting as the central MCO.

While having a single MCO would be simpler and easier to manage operations with faster rollout, the design could also introduce a single point of failure, the operator said.

"In case of any disruption, the entire market clearing function would be affected," it said.

Among other suggestions, the grid operator also made a case for a separate cell within Grid India to carry out the function, distinct from the rest of its operations.

"Due to the conflicting nature of market clearing and ensuring reliability, institutional ring-fencing within Grid India is necessary," it said.

The transfer of the Central Transmission Utility to Grid India is underway, after which transmission planning, system operations and market operations would be under one umbrella, which may create grounds for potential conflict, it said. However, a wholly owned subsidiary of Grid India may be needed at some point for the purpose of market coupling.

It also suggested that the market coupling regulation should specify whether applicability in the day-ahead market (DAM) refers to all variants such as green DAM and high price-DAM.

IEX, which accounts for the highest traded volume, had challenged the regulator's suo motu order in the Appellate Tribunal for Electricity (APTEL), arguing that the proposed framework could disrupt the existing power market structure.

In February, APTEL allowed the regulator to proceed with framing regulations on power market coupling.