Power Market Coupling Delayed as APTEL Flags Need for Detailed Regulations
APTEL has delayed power market coupling implementation, stating it cannot proceed until CERC frames detailed regulations. The tribunal observed no clarity exists on regulation timeframes during Friday's hearing. The next hearing is scheduled for January 19, extending uncertainty over the rollout of the mechanism designed to create a single market clearing price across power exchanges.
*this image is generated using AI for illustrative purposes only.
Market coupling in the power sector faces further delays as the Appellate Tribunal for Electricity (APTEL) indicated that the proposed mechanism cannot be implemented until detailed regulations are framed by the Central Electricity Regulatory Commission (CERC). The tribunal's observations during Friday's hearing have extended uncertainty around the rollout timeline.
APTEL's Key Observations
During the hearing, the tribunal emphasized that while market coupling remains a policy objective, its implementation is contingent on proper regulatory framework development. The tribunal noted the absence of clarity regarding the timeframe for regulation notification.
| Key Points: | Details |
|---|---|
| Implementation Status: | Cannot proceed without CERC regulations |
| Next Hearing Date: | January 19 |
| Current Uncertainty: | No clear timeframe for regulation formulation |
| Tribunal's Position: | Exchanges can challenge regulations once framed |
"All we know is that CERC will not implement this system till regulations are made. We don't even know if and over what time regulations would be made. Once regulations are made, exchanges can always challenge if they have concerns," the tribunal observed.
Market Coupling Mechanism and Challenges
Market coupling seeks to introduce a common clearing mechanism across power exchanges to arrive at a single market clearing price. However, the proposal faces significant opposition from Indian Energy Exchange (IEX), the leading power exchange in the country.
IEX has raised several concerns regarding the proposed mechanism:
- Competition-related issues
- Governance of the coupling operator
- Algorithm transparency concerns
- System readiness questions
CERC's Clarification
A day before the hearing, CERC issued a corrigendum providing important clarification on its earlier communication regarding market coupling. The regulator specified that its previous communication should be "read as a direction and not an order."
| Clarification Details: | Impact |
|---|---|
| Communication Type: | Direction, not order |
| Market Reaction: | Earlier communication triggered market response |
| Legal Significance: | Addresses concerns about mandating without regulations |
| Tribunal Response: | Took note during hearing |
This clarification holds significance as the earlier communication had triggered market reaction and legal scrutiny over whether CERC had effectively mandated implementation without first notifying proper regulations.
Implementation Timeline and Next Steps
The tribunal reinforced its view that no immediate rollout can take place in the absence of a comprehensive regulatory framework. Any future rollout is expected only after CERC undertakes a complete regulation-making exercise, which could itself face additional challenges.
Until the regulatory framework is established, power exchanges will continue operating under the existing market structure. The focus has now shifted from near-term execution to regulatory design and ensuring proper due process is followed throughout the implementation journey.
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