'Market coupling' mechanism to foster competiton in power trading, says Power Exchange India

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The Power Exchange India Limited (PXIL), promoted by NSE and NCDEX, has welcomed the proposed 'market coupling' mechanism in electricity trading on exchanges.

The draft Power Market Regulations 2020 issued by the Central Electricity Regulatory Commission (CERC) has mooted a concept called 'market coupling', which means a uniform market clearing price for buyers and sellers in all exchanges operating in an area.

India has two operational power exchanges -- the Indian Energy Exchange (IEX), which commands around 95 percent market share, and PXIL.

PTC India has received approval for the third power exchange in the country.

As per the draft regulation, price discovery of day-ahead and real-time contracts shall be done by a market coupling operator.

"A competitive marketplace can thrive on a strong foundation of an enabling market structure like market coupling, fair rules that allow competition to thrive and ensuring ease of participation on various marketplaces," PXIL MD and CEO Prabhajit Kumar Sarkar said.

IEX declined to comment on the proposed move.

PTC India ED and Group Chief Risk Officer Rajiv Malhotra said, "The power market is still nascent and there is potential for new product-market segments to serve the participants. The regulation is intended to enable deeper markets. We believe that some of the enablers need to be elaborated further in terms of ability to lead to intended outcomes."

"Competition will foster exchanges to enhance the service levels, innovate for the market which in turn will reduce the overall costs for procurement," a PXIL statement quoting a leading power trading company said.