CERC proposes Grid India as market coupling operator

Power regulator CERC has proposed that Grid Controller of India Ltd (Grid India) function as market coupling operator (MCO), in a bid to establish uniform price discovery across all power exchanges.

As a Market Coupling Operator, Grid India will be responsible for aggregating bids for each market segment received across all Power Exchanges and ensuring an efficient price discovery.

CERC brought out the draft Central Electricity Regulatory Commission (Power Market) (Second Amendment) Regulations, 2026, earlier this month.

For the implementation of Market Coupling, Grid India will form a separate cell for discharging the functions of MCO.

Market Coupling shall apply to the Day-Ahead Market (DAM), Real-Time Market (RTM) and other market segments, as proposed in the draft.

It proposed that all power Exchanges shall collect bids in a uniform bid format from market participants in accordance with the procedure and format stipulated in the Power Market Coupling Procedure (PMCP).

It provides that all anonymous and validated bids (both buy and sell bids) shall then be transmitted from Power Exchanges to the MCO through a secured channel as per the timelines stipulated in the Power Market Coupling Procedure (PMCP).

According to the draft regulations, the price discovery mechanism shall adopt the principle of maximisation of economic surplus (sum of buyer surplus and seller surplus), taking into account all bid types.

The price discovered for the unconstrained market shall be a uniform market-clearing price for all buyers and sellers who are cleared, provided that, in case of congestion in the transmission corridor, market splitting shall be adopted, it is suggested.

CERC approved market coupling in July 2025. Once implemented, buy and sell bids from all power exchanges will be pooled together to determine a single market-clearing price, replacing the existing system under which prices differ across exchanges.

Indian Energy Exchange currently accounts for nearly 90 per cent of exchange-based power trading volumes, while Power Exchange India Ltd (PXIL) and Hindustan Power Exchange Ltd (HPX) make up the rest.