The Indian Energy Exchange (IEX) currently accounts for nearly 90 per cent of exchange-based power trading volumes, while Power Exchange India Ltd (PXIL) and Hindustan Power Exchange Ltd (HPX) make up the remaining share.
The power sector regulator, the Central Electricity Regulatory Commission (CERC), is considering rationalising the transaction fees charged by power trading exchanges, a move that could help lower electricity costs for buyers as the sector moves closer to the implementation of market coupling.
This development comes as CERC progresses with market coupling, a major reform designed to enhance efficiency, deepen market liquidity, and encourage price convergence across power exchanges. Over time, these changes are expected to reduce the overall cost of power procurement for distribution companies and large consumers.
Market coupling, approved by the regulator in July after more than two years of deliberations, is proposed to be implemented in a phased manner, beginning with the day-ahead market (DAM) from January 2026. Under this mechanism, buy and sell bids across all power exchanges will be aggregated to arrive at a single market-clearing price, replacing the current system of multiple prices across different platforms.
An official said that the Central Electricity Regulatory Commission (CERC) finalised a staff paper titled “Review of Transaction Fee Charged by the Power Exchanges” in December 2025. Speaking on condition of anonymity, the official stated that the regulator is assessing whether the existing transaction fee framework, currently capped at 2 paise per unit, remains suitable in a market that has seen a sharp rise in trading volumes and is moving towards a unified price discovery system.
Among the proposals under consideration is the introduction of a fixed transaction fee of around 1.5 paise per unit for most trading segments. At present, power exchanges typically charge transaction fees close to the regulatory ceiling. Another proposal suggests lowering the transaction fee to 1.25 paise per unit for term-ahead market (TAM) contracts, considering their longer duration and relatively lower operational intensity compared to short-term trades.
India’s exchange-based power market has expanded significantly over the past decade. Electricity traded on power exchanges has increased more than sixteen times since 2009-10, with total traded volumes exceeding 120 billion units in 2023-24. While the day-ahead market earlier accounted for almost the entire traded volume, real-time, intra-day, and term-ahead segments now represent a growing share.
Industry experts believe that market coupling will help narrow price differences across exchanges, improve the utilisation of generation capacity, and enable buyers to procure power at more efficient rates. Indian Energy Exchange (IEX) currently accounts for nearly 90 per cent of exchange-based power trading volumes, while Power Exchange India Ltd (PXIL) and Hindustan Power Exchange Ltd (HPX) account for the remaining share. Under the approved framework, all three exchanges will operate as Market Coupling Operators on a rotational basis, with Grid-India acting as the backup and audit operator to ensure system integrity.
Officials noted that the design of transaction fees will gain greater importance once exchanges stop competing on price discovery. With transaction fees contributing more than 95 per cent of revenues for established exchanges, any recalibration is expected to have a significant impact on the sector.
Discussions on transaction fees are still at a preliminary stage, and any final decision is expected to follow stakeholder consultations and align with CERC’s broader objective of improving efficiency, transparency, and affordability in India’s power markets.
