As the mercury rises with the onset of summer, the power prices on energy exchanges are escalating after a dip in the latter half of March 2023. In light of this, it's crucial to familiarize oneself with terms like DAM and TAM in the context of power exchanges. This topic is especially significant for the IAS exam under the economy segment of the GS paper 3.
DAM and TAM Terms IEX - Explained | UPSC Notes
Significance of DAM and TAM in Indian Energy Exchange (IEX)
- Day Ahead Market (DAM): The Day-Ahead-Market (DAM) is a power trading market where delivery is scheduled for the next day.
- Term Ahead Market (TAM): The term-ahead market (TAM) refers to products that allow participants to trade for power delivery up to a week in advance.
Learn more about the Indian Energy Exchange in the linked article.
Current Scenario of Power Prices
- As summer approaches, electricity prices for consumers are anticipated to rise in line with demand.
- Power demand in the country is predicted to surge further in the days ahead.
- The prices are already nearing the ₹10 per kWh cap set by the Central Electricity Regulatory Commission (CERC).
- According to the IMD, rising temperatures will affect short-term market prices, including those on exchanges.
- There has been an increase in overall demand in both the Day Ahead Market (DAM) and Time Ahead Market (TAM) segments.
- The probable hike in tariffs is due to the rise in fuel costs and the cost of power purchase agreements (PPA).
Central Electricity Regulatory Commission (CERC)
- The Central Electricity Regulatory Commission (CERC) was formed on July 24, 1998, under the Electricity Regulatory Commissions Act, 1998, by the Ministry of Power.
- The commission promotes environmentally friendly policies, ensures policy transparency, and regulates electricity prices.
- Discover more about the Central Electricity Regulatory Commission (CERC) in the linked article.
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