Business Standard

The case for coupling of power exchanges

A single market-clearing price will not kill competition

power, electricity, IIP, demand, discoms, distribution, companies, firms, transmission, transformer, workers

'ARCs will bleed companies dry,' says a promoter of one company.

Kirit S Parikh
Electricity is provided to consumers by distribution companies (discoms). The discoms usually buy electricity from power generating companies under long-term power purchase agreements. However, the demand for electricity varies from moment to moment, and there is significant variability in this demand. Also, the supply of electricity has a certain variability and uncertainty. It is, therefore, necessary for discoms to buy electricity from generating companies who may have at that moment certain surplus generating capacity.

Considering the inadequacies of such information asymmetry where discoms and generating units do not know who needs power and who has surplus, power exchanges were set
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Oct 29 2020 | 1:11 AM IST

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