DAM and TAM Terms IEX [UPSC Notes]

Power prices on the energy exchanges have seen an increase as temperatures rise after easing in the second half of March 2023. In this context, know what the terms DAM and TAM mean with respect to power exchanges. This topic assumes relevance for the IAS exam economy segment of the GS paper 3.

DAM and TAM Terms Indian Energy Exchange (IEX)

• Day Ahead Market (DAM): The power trading market for delivery the day after is called the Day-Ahead-Market (DAM).
• Term Ahead Market (TAM): Products that enable participants to trade for the delivery of power for up to one week are known as term-ahead market (TAM) products.

Know more about Indian Energy Exchange in the linked article.

Power Prices Present Issue

• With the mercury expected to rise further with the onset of summer, consumer electricity prices too are expected to soar in tandem with demand.
• The power demand in the country is expected to go up further in the coming days. 
• The prices have already started touching the ceiling of ₹10 per kWh set by the Central Electricity Regulatory Commission (CERC).
• As per IMD, the temperatures to soar higher and will have an impact on the short-term market prices including exchanges.
• The overall demand requirements have seen an increase among both the Day Ahead Market (DAM) and Time Ahead Market (TAM) segments.
• The likely increase in tariffs comes in the backdrop of higher fuel expenses, and the cost of the power purchase agreement (PPA).

DAM and TAM Terms IEX:- Download PDF Here