Central Electricity Regulatory Commission: In the present case, the four-member Bench of Jishnu Barua (Chairperson), Ramesh Babu V. (Member), Harish Dudani (Member) and Ravinder Singh Dhillon (Member), took suo motu cognizance and decided to initiate the process for implementing market coupling in a phased manner. The Commission directed Grid Controller of India (‘Grid-India’) to develop the necessary software for running the shadow pilot for coupling term-ahead market (‘TAM’) of the power exchanges, and after the software’s development, it should be implemented for three months. Further, Grid-India was directed to share the operational experience of running the shadow pilot, in the form of a feedback report to the Commission.
Background
The Commission decided to implement a Shadow Pilot on Power Systems and Cost Optimization through market coupling. Thus, by order dated 6-2-2024, directed Grid-India to implement the following on a shadow pilot basis:
- coupling of the real-time market (‘RTM’) of the three power exchanges;
- separately coupling of the RTM at the three power exchanges along with security-constrained economic dispatch (‘SCED’); and
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coupling of day-ahead market (‘DAM’) of the three power exchanges.
The Commission, upon Grid-India’s request, constituted a Committee under the chairmanship of Member, CERC, to oversee the implementation of the shadow pilot of market coupling.
The Commission directed Grid-India to share the operational experience of running a shadow pilot in the form of a monthly report during the period of four months and a feedback report at the end of the four-month period. Therefore, on 30-6-2025, Grid-India submitted the Feedback Report on D+1 run of shadow pilot on power system and cost optimization through Market Coupling for the four-month period from 1-12-2024 to 31-3-2025.
Analysis and Decision
Based on the submissions made by Grid-India and after referring to Regulations 37 to 39 of the Power Market Regulations, 2021 (‘PMR’), the Commission decided to initiate the process for implementing market coupling in a phased manner, given as under:
- Implementation of the coupling of DAM of power exchanges in a round-robin mode by January 2026 for which power exchanges might act as the market coupling operator (‘MCO’) on a rotational basis, with Grid-India being the fourth MCO for backup and audit purposes.
- The coupling of RTM of the power exchanges should be considered at a later stage after gaining operational experience from the coupling of DAM.
- Some of the complexities involved in RTM-SCED coupling, as highlighted by Grid-India, could be addressed through suitable regulatory interventions and after stakeholder consultation.
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The feasibility of coupling of the TAM (including contingency contracts) of the power exchanges also needs to be examined by running a shadow pilot.
The Commission directed its staff to initiate the consultative process with Grid-India and power exchanges on various operational and procedural aspects for implementing the coupling of DAM and propose the regulatory amendments with respect to the implementation of market coupling.
The Commission further directed Grid-India to develop the necessary software for running the shadow pilot for coupling TAM (including contingency contracts) of the power exchanges. Post development of necessary software, Grid-India should implement the shadow pilot for coupling TAM (including contingency contracts) of the power exchanges for three months and share the operational experience of running the shadow pilot thereafter in the form of a feedback report to the Commission. Furthermore, to facilitate it, the Commission directed all the power exchanges to share the necessary data and other information as required by the staff of the Commission and Grid-India to analye various operational and procedural aspects for implementing the coupling of DAM.
[Directions for Implementing Market Coupling as per Central Electricity Regulatory Commission (Power Market) Regulations, 2021, In Re., Petition No. 8/SM/2025, decided on 23-7-2025]
