Grid India has proposed a steering committee, including CERC and power exchanges, to oversee market coupling operations. This contrasts with the regulator's draft norms suggesting Grid India as a sole operator, citing European experience and potential single points of failure.
The proposed market coupling mechanism is crucial for enhancing efficiency and transparency in India's electricity market. Grid India's push for a steering committee over a single operator could significantly influence the structure and operational framework of power trading, potentially impacting price discovery and market stability.
Grid India has proposed the establishment of a steering committee to oversee power market coupling operations, a move that diverges from the Central Electricity Regulatory Commission's (CERC) draft norms suggesting a single operator. The grid operator argues that a committee, comprising stakeholders like CERC, Grid India, power exchanges, external auditors, and market monitors, would best serve the goals of efficiency and transparency in the electricity market.
Market coupling aims to integrate bids from all power exchanges to discover a uniform electricity price, thereby enhancing market efficiency. CERC had previously issued an order to initiate this process and subsequently released draft regulations in April proposing Grid India as the sole market coupling operator (MCO). Grid India, however, pointed to European experiences where a round-robin system, supported by a steering committee, has been adopted. It warned that a single MCO model, while simpler, could introduce a single point of failure, potentially disrupting the entire market clearing function in case of any disruption.
Grid India also suggested creating a separate cell within its own operations dedicated to market coupling functions. This is to address potential conflicts arising from the dual roles of market clearing and ensuring system reliability, especially as the Central Transmission Utility is being transferred to Grid India. The company indicated that a wholly owned subsidiary might be necessary for market coupling in the future. Additionally, Grid India requested clarification on whether the market coupling regulation for the day-ahead market would apply to all its variants, such as green DAM and high price-DAM.
Notably, the Indian Energy Exchange Ltd, along with other power exchanges, had challenged CERC's suo motu order on market coupling before the Appellate Tribunal for Electricity (APTEL). In February, APTEL permitted the regulator to move forward with framing the relevant regulations.
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