Power market coupling faces delay, unlikely before December 2027: Report

A J M Financial report says regulatory and procedural hurdles could delay India's proposed power market coupling until late 2027, affecting IEX's market share projections

The proposed power market coupling in the country is unlikely to take effect before December 2027, given the regulatory and procedural challenges involved in the process, according to a report by equity research firm J M Financial.

 

Under market coupling, buy and sell bids from the existing three power exchanges will be aggregated into a single national pool, and a centralised algorithm will determine a uniform market clearing price (MCP) for electricity traded in the spot market. The idea aims to improve market efficiency and ensure optimal price discovery.

 

Why has market coupling been delayed?

 

The Appellate Tribunal for Electricity (Aptel) was scheduled to hear on October 30 the plea from Indian Energy Exchange (IEX) concerning the market coupling regulations issued by the Central Electricity Regulatory Commission (CERC) on July 23, 2025. However, Ajay Talegaonkar, technical member (electricity) of Aptel, expressed his inclination to recuse himself from hearing the case.

 

 

“It was decided to request guidance from the honourable chairperson of Aptel regarding the appropriate bench for listing the appeal. The hearing has been tentatively postponed to November 28. Beyond this, the company has not come across any development for implementation of market coupling in future,” the report said.

 

How will market coupling impact IEX’s share?

 

The report added that the market share of IEX, the largest electronic power trading platform in the country, is expected to gradually taper from 75 per cent in 2027-28 to 60 per cent in 2029-30. The exchange, which currently accounts for 90 per cent of the market share, reported a 10 per cent jump in revenue at Rs 150 crore for the quarter ended September 2025, driven by an increase in trading volume.

 

What trends are shaping India’s power market?

 

Despite subdued power demand in the second quarter of the current financial year — with energy requirement at 449 billion units, a mere 3 per cent growth year-on-year — IEX achieved electricity volumes of 35,218 million units, a 16 per cent increase over the same period last year.

 

The report also said that new initiatives being taken by the government and the regulator to boost the power market could increase the share of short-term power from 7 per cent currently to 10 per cent in 2029-30.