Context: The Central Electricity Regulatory Commission (CERC) has proposed draft regulations to implement market coupling in electricity trading, designating Grid India as the Market Coupling Operator to enable uniform price discovery across power exchanges.
- Electricity markets in India operate through power exchanges like IEX, PXIL, and HPX where prices are discovered based on demand and supply.
- Currently, each exchange determines its own price, leading to price differences for the same electricity across platforms. Example: If the same electricity is sold at ₹5/unit in IEX and ₹6/unit in PXIL at the same time, it creates inefficiency.
- Market coupling refers to a mechanism where bids from all exchanges are aggregated to determine a single uniform market-clearing price.
- The concept is governed under the Electricity Act, 2003 and regulated by CERC through Power Market Regulations.
- Grid Controller of India (Grid India) manages real-time grid operations and is proposed to act as the central Market Coupling Operator (MCO).
- The market-clearing price is determined at the equilibrium of aggregated demand and supply curves, improving efficiency and transparency.
- Power Purchase Agreements (PPAs) are long-term contracts (often 25 years), while exchanges handle short-term electricity trade.
- Market coupling aims to maximise economic surplus (sum of consumer and producer surplus) and optimise resource allocation.
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2026 preparation.
FOLLOW US ON:
â—‰ YouTube : https://www.youtube.com/@CivilsPrepTeam
â—‰ Facebook: https://www.facebook.com/LaExcellenceIAS
â—‰ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040
CERC Market Coupling: One Grid One Price Reform