A webinar on “Powering India's Future: Navigating Market Coupling Essentials” was co-organised by the Institute for Energy Economics and Financial Analysis (IEEFA) and CarbonCopy to bring together power sector experts from different geographies to share insights on the Central Electricity Regulatory Commission (CERC) Staff Paper on market coupling. The points discussed in the webinar were compiled, refined and submitted to CERC on 16 October 2023, in the form of recommendations.
The Indian power sector is undergoing a transformation from a predominantly fossil-based system to an increasingly renewable-centric one, calling for a change in the design of electrical systems, markets and regulations. To attain this goal, and specifically to achieve the target of 500GW of renewable capacity by 2030, the CERC has introduced a series of regulations. One focus area is the emphasis on a market-based mechanism to facilitate the entry of renewables that includes inter alia ‘Power Market Coupling’ to enhance liquidity in the wholesale spot market since the Ministry of Power directed CERC to initiate the market coupling process across multiple electricity exchanges. Coupling presents a unique opportunity to form a bigger connected liquid and efficient marketplace to overcome the limitations of a fragmented market that currently has only 7% liquidity, multiple segments, low-price cap, and aggressive bidding by the supply side in the face of unfulfilled demand.