Speaking at the Indian Coal Markets Conference, Executive Director V S Maharaj said reforms must be calibrated to avoid electricity tariff volatility and uncertainty for thermal power producers.

CIL hopes that the National Coal Exchange may be implemented in phases, with necessary provisions to safeguard energy security, as the company on Tuesday outlined its vision for the proposed platform, asserting that market reforms in the sector must be carefully balanced with the country’s energy security needs.

Speaking at the mjunction-organised Indian Coal Markets Conference here, V S Maharaj, Executive Director (ICT) of Coal India, said the industry is moving from traditional e-auctions towards a more sophisticated, market-driven electronic trading platform.

“The shift toward a formalised coal exchange is no longer a distant concept. We are reform-aligned, not reform-resistant. We support modernisation, but reform must be calibrated, phased and aligned with national energy security,” Maharaj said.

He cautioned that exposing long-term power assets to full market volatility could lead to electricity tariff fluctuations and uncertainty in energy security. Long-Term Fuel Supply Agreements (FSAs), he said, would continue to play a major role in ensuring stability for thermal power producers.

Describing Coal India’s approach as “refined, not resistant”, Maharaj said the company supports digital exchange-based trading but favours a phased introduction of coal sales through the proposed platform.

The proposed exchange aims to create a regulated electronic market, shifting the sector from a “one-to-many” auction system to a “many-to-many” price discovery model. Under the framework, coal producers, including CIL, would list availability, quantity and price, while buyers would transact at real-time market rates through automated digital systems.

A key feature of the exchange would be the determination of Market Clearing Price (MCP) and Market Clearing Volume (MCV).

Officials said both buyers and sellers would submit price expectations confidentially in a double-sided closed mechanism, with the process overseen by the Coal Controller to ensure transparency and objectivity.

Niladri Bhattacharjee, Partner at Grant Thornton Bharat, said a coal exchange would be more successful in a supply-comfortable or surplus scenario.

“A surplus coal situation would be good for the coal exchange. It will help keep prices in check despite market transaction charges and encourage a shift from the current direct-to-consumer character of the market,” he said.

Both Bhattacharjee and Maharaj indicated that prices could settle at lower levels during trades on the exchange under competitive conditions.

Maharaj also stressed the need for independent regulatory oversight to prevent speculative distortion and highlighted the importance of strengthening logistics infrastructure, including railway connectivity and quantity reconciliation mechanisms, before full-scale implementation.

Published on February 25, 2026