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The Central Electricity Regulatory Commission (CERC) has approved the implementation of market coupling in the Day-Ahead Market (DAM).
IEX Shares Decline.
Shares of the IEX on Friday were trading lower by 1.22% to Rs 133.66 apiece on the NSE in the afternoon trade. The Indian Energy Exchange (IEX) saw a massive decline last week by nearly 30% in a day following reports that the Central Electricity Regulatory Commission (CERC) has approved the implementation of market coupling in the Day-Ahead Market (DAM). Though the shares surged over 10% the next day, they have again fallen to the same level. Here’s all you need to know about market coupling, its impact on the IEX, and concerns around it.
What Is Market Coupling?
Market coupling is a process that aggregates buy and sell bids from all power exchanges in the country to arrive at a single, uniform market clearing price (MCP). This means electricity traded across all exchanges will follow one uniform price point at any given time. While the change won’t have an immediate impact on end consumers, it could eventually lead to lower power tariffs.
Recent reports suggested that the Central Electricity Regulatory Commission (CERC) has approved the implementation of market coupling in the Day-Ahead Market (DAM). As part of the first phase of these new regulations, DAM will be coupled by January 2026. Under this model, various power exchanges will rotate as Market Coupling Operators (MCOs) through a round-robin mechanism.
IEX Shares Fall 30%
Shares of the IEX on Friday were trading lower by 1.22% to Rs 133.66 apiece on the NSE, at around 1:00 pm. This is over 30% down as compared with Rs 195 at the beginning of the last month, July 2. The IEX’s shares saw a massive 30% fall on July 24, after the reports of market coupling that made investors fearful that the move would hurt its market dominance.
Why Are Power Exchanges Concerned?
The CERC’s plan to implement market coupling for the DAM segment from January 2026 has sparked concerns across several players in the power sector, particularly the power exchanges.
According to a detailed report authored by JM Financial’s Sudhanshu Bansal and Krishnakant Phafat, the benefits of market coupling are negligible.
“A shadow pilot study by Grid-India revealed that DAM coupling resulted in an overall welfare gain of just 0.3% in price and 0.2% in volume. The volume of electricity that could not be cleared as % to unconstrained cleared volume was just 0.10% in FY24. Anticipated benefits (price, volume, transmission) of market coupling are not explicitly evident in the Indian context,” they said in a report dated July 27, 2025.
According to CERC order, In the Real-Time Market (RTM) segment as well, both overall welfare increase and increase in volume cleared saw a meagre gain of 0.01%.
A industry person, who did not want to be named, said the increase of social welfare by Rs 38 crore in case of DAM coupling doesn’t mean that there will be saving of Rs 38 crore. “Savings will be miniscule, if at all. The reported increase in social welfare of Rs 38 crore in DAM is theoretical, used for algorithmic modelling, and does not imply actual consumer savings,” the official added.
The implementation of the market coupling is also complex and might take longer, the industry player said citing a brokerage report.
Brokerage firm JM Financial in its note has said the January 2026 target seems unrealistic. “Power market coupling requires robust infrastructure upgrades, software integration, data-sharing protocols, and consensus on financial settlements. A rollout before December 2027 seems unlikely,” the brokerage stated.
Industry players also claimed CERC has “acknowledged that coupling doesn’t bring about significant price variation. If that’s the case, the objectives of uniform price discovery, transmission optimisation, and surplus maximisation are already being met under the current multi-exchange system”.
‘Move To Lower Power Prices To Benefit End-Consumers’: Power Ministry Official
Though the power exchange players are concerned, the proposal is aimed at reducing the cost of power for end consumers as market coupling is based on the aggregate of buy bids and sell bids across the three power bourses.
“Since market coupling is based on the aggregate of buy bids and sell bids across the three power bourses, we expect power prices to come down to some extent. Further, now, we also have electricity futures, which have just started in MCX, and is going to begin in the NSE as well. All of these combined is bound to lower the per unit cost of power, benefiting the end-consumer, who, in the long run, may enjoy lower electricity tariffs. It will provide a level-playing field to all three exchanges,” a senior official in the power ministry told Moneycontrol recently.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
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