For renewable energy answers, ask the right questions, Pg10

Key Highlights:

• India's solar capacity expanded to 162 GW by June 2026, driven by falling module prices and government policy.
• Over two billion units of solar electricity were curtailed between May and December last year due to grid absorption issues.
• The Central Electricity Regulatory Commission (CERC) proposed making Grid-India the sole Market Coupling Operator (MCO) for power exchanges.
• Grid-India, a government utility, is primarily designed for managing transmission systems, not commercial market decisions.
• The proposal aims to create a uniform national price by pooling bids from exchanges like IEX, PXIL, and HPX.

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Detailed Insights:

• The rapid growth in renewable energy necessitates flexible market products, transmission investments, battery storage, and flexible power plants.
• A robust electricity market is crucial to manage surplus generation in one region and shortages in another, using price signals.
• CERC's proposal, made in July 2025 and January 2026, suggests a centralized clearing algorithm under Grid-India.
• The stated rationale for the MCO is market fragmentation, but IEX already handles 80-85% of trading volumes.
• CERC's own shadow pilot indicated a minimal welfare improvement of only 0.3% over four months from market coupling.
• There are no documented allegations of excessive fees or predatory pricing against IEX, questioning the problem CERC is addressing.
• CERC previously ordered the discontinuation of user-defined hourly contracts in the Term-Ahead Market (TAM), hindering market innovation.
• Grid-India itself, in a June 8 submission, urged CERC to reconsider and suggested a round-robin system for the MCO role.
• Centralizing the clearing algorithm under a public utility could slow down market innovation and product development.
• The renewable sector requires a market architecture that rewards flexible capacity and enables competitive markets for services like frequency regulation.

Key Concepts Involved:

• Central Electricity Regulatory Commission (CERC): The statutory body that regulates the power sector in India, including tariffs and market operations.
• Grid-India: Formerly POSOCO, it is the national grid operator responsible for the integrated operation of the Indian power system.
• Market Coupling Operator (MCO): An entity that pools bids and offers from multiple power exchanges to determine a single, uniform market clearing price.
• Day-Ahead Market (DAM): A spot market where electricity is traded for delivery on the following day.
• Real-Time Market (RTM): A spot market where electricity is traded for delivery within a short timeframe, typically 15-minute blocks.
• Term-Ahead Market (TAM): A market segment for electricity contracts for delivery beyond the day-ahead, often for specific periods or blocks.