Shares of Indian Energy Exchange Ltd (IEX) sank to its lower circuit on Thursday, July 24, after reports suggested that the Central Regulatory Electricity Commission approved the implementation of power coupling with the Day Ahead Market (DAM).

As part of the first phase of the new regulations, the Day-Ahead Market (DAM) will be coupled by January 2026. In this system, various power exchanges will take turns serving as Market Coupling Operators (MCOs) through a round-robin arrangement.

Market coupling is a model where buy bids and sell bids from all power exchanges in India will be aggregated and matched, to discover a uniform market clearing price (MCP). It will also mean there will be only one price for the electricity that is to be traded at any point of time through these exchanges.

If implemented, all the power exchanges will be rendered as a platform where only buy and sell bids will be received and power dispatched to the buyer. This mechanism will not have any immediate impact on the end user, but in the long run, it could reduce overall power tariffs for consumers.

Apart from the point of uniform price discovery across exchanges, the Centre also wants market coupling to be implemented, as it is keen to increase the share of power exchanges in the trading of electricity. The government wants to reduce the prevalence of current format of long-term power purchase agreements (PPAs), which run for as long as 25 years.