HPX, PXIL say market coupling a vital step towards ‘One Nation, One Grid, One Price’ vision

PTC India Ltd-backed Hindustan Power Exchange (HPX) and National Stock Exchange-promoted Power Exchange India Ltd (PXIL) hope to increase their share in electricity trading once market coupling is introduced in January 2026, senior management of the two power exchanges told Moneycontrol.

Market coupling would be a “crucial reform” towards the government’s larger goal of having a centralised electricity dispatch system through Market-Based Economic Dispatch (MBED), they said.

HPX managing director (MD) Harish Saran said the move will put an end to the “monopoly” of the Indian Energy Exchange (IEX), which has almost all the volume in the day-ahead-market (DAM).

“With market coupling, all three exchanges will have volumes. HPX will stand to gain. IEX will lose some market share in the DAM since currently all the volumes are concentrated there (IEX),” Saran told Moneycontrol.

By enabling uniform price discovery across exchanges through a centralised algorithm, market coupling will foster competition, optimise transmission usage, and ensure fair and transparent access for all participants,” Saran told Moneycontrol.

Also read: Central electricity regulator's nod to market coupling could lower power prices in spot market

According to an IEX official, DAM now accounts for nearly 35 percent of its total volumes, down from at least 80 percent earlier. Maximum volumes are now being seeing in the real-time market where coupling is not on the cards for now.

India has three power exchanges — IEX, HPX and PXIL.

Market coupling is a model in which the buying and selling of electricity from all power exchanges are aggregated and matched to discover a uniform market clearing price (MCP). In day-ahead-market (DAM) electricity is traded for delivery on the following day. Trading in this segment occurs in 15-minute time blocks for the next day's 24 hours.

A step toward MBED

Market coupling is a critical enabler for the future implementation of market-based economic dispatch (MBED), which will help realise the vision of a single national merit order, Saran said.

Merit order is a ranking system for electricity supply and sale wherein power plants with cheaper prices are prioritised to generate power and those with higher costs are brought online later to meet the remaining demand.

MBED envisages a centralised scheduling for electricity across the country, at the inter-state as well as intra-state level.

At present, electricity dispatch happens at multiple levels — state as well as central — for which modes of trade are also multiple (PPAs, exchanges and power banking).

“MBED will also improve the overall system efficiency. At HPX, we are committed to supporting a power market that is data-driven, cost-efficient, and future-ready,” Saran said.

Also read: India-UK trade deal to boost Indian cleantech exports amid renewable energy slump in US.

PXIL's senior management said market coupling is an essential next step in moving towards the ‘One Nation, One Grid, One Price’ framework, which would lead to optimisation of despatch of available capacity, better grid operation, higher liquidity and innovation.

The ‘One Nation, One Grid, One Price’ framework, also known as the ‘One Nation, One Grid, One Frequency, One Price’ initiative, is aimed at creating a unified and efficient electricity system.

Also read: IEX shares rebound to soar 12% on solid Q1 show; analysts flag growth concerns.

It envisions a single, integrated electricity grid across the country, facilitating seamless power transmission and a uniform pricing mechanism for electricity.

“Market Coupling will strengthen competition leading to fructification of multiple power exchanges that will ensure product innovation, efficiency in service delivery, no entry barriers for new power exchange and control on transaction fees,” said PXIL's senior management.

IEX did not respond to the queries sent by Moneycontrol.