Indian Energy Exchange (IEX)

Indeed, lot of interesting and transparent debate. One specific point in this staff paper on market coupling that catches attention is as follows:

“5.2.4. Given the existing market share of power exchanges in the collective
transaction segment, it seems that while the implementation of market coupling
may not cause any major change in terms of price discovery, the bids could be
divided among the exchanges, which at present are concentrated in one
exchange. “

Doesn’t this mean that irrespective of market coupling, IEX would continue to enjoy the dominant position since, due to high liquidity, the optimum prices would mostly be discovered on IEX?

I have 2 basic doubts with respect to the market coupling mechanism in the context of above point:

1. Can the actual power transaction be executed on any exchange irrespective of which exchange the best price was discovered on? So, say the discovered price happened to be quoted on IEX, can the transaction still happen on HPX or PXIL?
2. From who’s perspective is the best price defined? Seller’s? Buyer’s? Government’s? End customer’s? Industry’s? A corollary to this question is: Say if the bid with the best price from seller’s perspective is offered on Power Exchange A, but the best bid from buyer’s perspective on Power Exchange B, will the final transaction happen on A or B or will there be transactions?

Request the experts to kindly throw some colors. Sorry, if the question is a mistaken interpretation of concept itself.