Interesting article
https://www.orfonline.org/expert-speak/-market-coupling-in-the-power-sector-is-india-doing-enough
Sharing a gist of it :
- Market coupling would fulfil its objectives only if India were to take the Market-Based Economic Despatch (MBED) route, where the country’s entire generation becomes market-driven. However, when the share of trade through market exchanges is a mere 7 percent of the total generation, market coupling could fall short of discovering a uniform market price.
- Globally, market coupling has been introduced to integrate two or more electricity markets or geographies. The proposed market coupling in India is unlikely to yield any benefit as it would only be a coupling of power exchanges without adding new geographies. Further, the dominance of IEX over almost the entire market share in collective transactions wouldn’t change the price discovery or liquidity and have a negligible social welfare impact.
So we would end up having uniform power pricing for less than 10% of the Electricity traded over the Exchanges while more than 90% of the Electricity generated would be negotiated via their own Long Term PPAs. We would still end up with non-uniform prices.
NOTE: These PPAs are sometimes 25 year long contracts and are still being negotiated/awarded making uniform pricing a pipe dream even in the future.
Seems more like the Government / Power Ministry is merely using the buzzword “Market Coupling” to shine in some International reports without any actual benefits on the ground.
