Power Exchange DAM Coupling: Potential Benefits and Risks

• The Central Electricity Regulatory Commission’s (CERC) proposed market coupling in Day Ahead Market (DAM) power exchanges may have little benefit for the power sector.

• Industry officials and analysts argue that the marginal improvements do not provide a compelling rationale for implementing market coupling on a full scale.

• The January timeline for implementation would be challenging, and the reported increase in social welfare by ₹38 crore in DAM does not imply actual consumer savings.

• The introduction of central market coupling mechanism risks adding complexity, delaying market operations, and duplicating functions.

• The proposed design more closely resembles ‘exchange coupling’ with no global precedence.