Why are IEX Shares Crashed ? and Shares of IEX ( Indian Energy Exchange) 27% hit today.
Indian Energy Exchange (IEX) has recorded the first largest crashes in the market and this crash is 25 %. And this is not safe for the Energy market and The Central Electricity Regulatory Commission (CERC) has officially sanctioned “market coupling,” a significant alteration to India’s power exchange electricity price discovery mechanism. This approval directly caused the recent price drop.
Do we know about market coupling?
Market coupling is a regulatory arrangement that aims to centralise the pricing process across all power exchanges. Currently, each exchange sets its own market clearing price (MCP) based on its internal demand and supply. But once market coupling is implemented, all exchanges will submit their anonymous bids to a centralized algorithm operated by Grid India (formerly POSOCO).
POSOCO, Stands for Grid Controller of India Limited (Grid-India), is the national-level body responsible for overseeing the safe, secure, and reliable operation of India’s electricity grid. It operates five Regional Load Despatch Centres (RLDCs) and one National Load Despatch Centre (NLDC). Its main role is to balance electricity demand and supply in real time and ensure smooth grid operations across the country.
This centralised system will fix a single and uniform clearing price for the Day Ahead Market, thereby pricing electricity at a uniform rate across all exchanges. The move aims to increase transparency in the market, level the playing field and ensure a more efficient pricing mechanism for consumers.
How does IEX Shares operate today?
Indian Energy Exchange (IEX) is the dominant power exchange in India,maintaining over 85% market share in both the Day-Ahead Market (DAM) and Real-Time Market (RTM). and IEX shares are Down today approx 27.89% and price of IEX share Rs 135.49.
In a draft on Market Coupling in 2023, the Central Electricity Regulatory Commission (CERC) said that India’s power sector is currently undergoing a major transformation. This shift is moving away from the traditional fossil-fuel based system to a rapidly renewable energy-based system. To successfully adopt this transition, extensive reforms are required in the design of power systems, energy markets and regulatory framework.
CERC Report of IEX Shares
The Central Electricity Regulatory Commission (CERC) has highlighted that India’s power sector is undergoing a significant shift aimed at improving transparency, operational efficiency, and healthy market competition. A major reform under this initiative is the rollout of market coupling, which is designed to bring uniformity to the price discovery process across all electricity exchanges.
CERC believes that this change will help in the effective use of transmission networks, remove inconsistencies in pricing, and foster broader market participation by offering equal opportunities to all trading platforms. With Grid-India designated as the Market Coupling Operator (MCO), the process will involve collecting anonymous buy and sell bids from all exchanges and using a centralized system to determine a single market clearing price. CERC also noted that this approach mirrors successful international models and is expected to strengthen the integration of renewable energy, leading to a more transparent and efficient power trading ecosystem in the country.
About Us
IEX, India’s leading power exchange, offers a nationwide automated trading platform for the physical delivery of electricity, renewable energy, and certificates. Expanding its reach, IEX has also initiated cross-border electricity trade. The exchange platform is crucial for competitive price discovery, enhancing efficiency, transparency, and flexibility in procurement, and ensuring payment security across the power sector value chain. The IEX ecosystem currently includes over 8,100 stakeholders across 28 states and 8 union territories. It is supported by a strong base of more than 4,900 commercial and industrial users from diverse sectors like metal, textile, cement, chemicals, automobiles, information technology, and real estate. By facilitating the most efficient price discovery, IEX helps maximize social welfare for all participants.
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