Market Coupling in Indian Power Exchanges: Challenges and Outlook

The Central Electricity Regulatory Commission (CERC) has approved market coupling for India’s power exchanges, starting January 2026, aiming to unify the Day-Ahead Market by creating a single, uniform clearing price across all platforms. However, industry leaders caution that execution faces major roadblocks—lack of a common technology platform, unready IT infrastructure, and unclear settlement mechanisms. India Energy Exchange (IEX), the country’s largest power exchange, is at the forefront of this initiative. But with all three exchanges operating in the same market, coupling essentially redistributes existing liquidity rather than integrating new geographies—a first-of-its-kind move with no global precedent. Past simulations showed negligible or even negative welfare gains, raising doubts about its real-world benefits. While the Day-Ahead Market is being prioritized due to lower complexity, challenges remain in scaling to Real-Time and other segments. Regulatory uncertainty looms large: altering core functions mid-license term risks deterring long-term investment, especially critical for achieving India’s 500 GW renewable target.