Central Dispatch Electricity System - only as a derogation
- Category: Network Codes
Is there still a room for Central Dispatch Model is the EU Internal Electricity System?
In the recent Recommendation No 03/2015 of 20 July 2015 on the Network Code on Electricity Balancing, the European overseer of electricity markets - the Agency for the Cooperation of Energy Regulators (ACER) - departs from its earlier stance expressed in the Framework Guidelines on Balancing (which acknowledged the parallel existence of central dispatch and self-dispatch arrangements of European electricity markets when drafting the Network Code on Electricity Balancing) and nominates the Self-Dispatching Model to be "the primary dispatching model to be applied by TSOs for determining generation and consumption schedules".
Consequently, Central Dispatch has been allowed for Transmission System Operators only as an exemption, provided the relevant authorities' approval has been granted.
10 MW REMIT reporting threshold - manageable by the way of contracting
- Category: REMIT
In determining whether the electricity production facility is able to make use of the de-minimis exemption from the REMIT reporting requirement the three elements are relevant:
(1) spatial proximity (whether installations are spatially separated)
(2) ownership structure, and
(3) marketing for several smaller installations in one common contract/multiple contracts.
EU ETS rules beyond 2020 revealed - benchmarks key for business models
- Category: Emissions trading
Numerous changes, but the basic architecture maintained. The European Commission revealed its draft amendment to the EU ETS Directive delineating rules for the EU ETS fourth trading period (2021-2030).
What are business models ramifications? Among wide spectrum of elements of the EU post-2020 low carbon framework the fact that EUAs issued from 1 January 2013 onwards will be valid indefinitely (and not replaced - as before) does not represent a qualitative change since these are rather technical details.
No doubt, point deserving to take a closer look in the first place is modified design for products benchmarks.
Non-fully backed bank guarantees coming to an end as the CCP collateral
- Category: EMIR
Expiring EMIR exemption will make as from 15 March 2016 CCP collateral more costly for non-financial counterparties.
RRM designation when first registering under REMIT - complicated case
- Category: REMIT
The latest version of a ACER's Questions and Answers on REMIT brings once more some important novelties of crucial practical importance.
However, one may still feel confused what is the clear requirement with respect to Registered Reporting Mechanism (RRM) designation when first registering with CEREMP.
Collateral vs central clearing - alternatives for OTC derivatives market
- Category: EMIR
The implementation of the central clearing obligation is expected to decrease the total gross notional outstanding for non-centrally cleared derivative activities (which is estimated about EUR 146 trillion) to about EUR 74.9 trillion (or by 49%).
It means 51% of these transactions will be cleared centrally and - after the implementation of the margin requirements - about 49% of the OTC derivatives market will be captured by the EMIR collateral requirement.
ACER's common schema for REMIT publications - carbon impact and "decision time" included
- Category: REMIT
ACER recommends, REMIT publication schema should include, among others, the field "impact on carbon permit prices" as well as "decision time" in order to allow users to evaluate the timeliness of the disclosure.
Intragroup transactions when calculating MiFID II ancillary activity exemption - itemised and evaluated?
- Category: MiFID
The complicated character of the MiFID II ancillary exemption calculations (see the relevant equations for:
- capital-employed test and
becomes even more complex when considering items involved with intra-group transactions.
Enhanced EMIR reporting scrutiny as from November 2015
- Category: EMIR
1 November 2015 marks the end of the period where trade repositories verified the completeness and accuracy of EMIR trade reports submitted by market participants using relatively less elaborate checks.
The first level validation, which is already in place since 1 December 2014, consisted in determining by trade repositories, which fields are mandatory in all circumstances and under what conditions fields can be left blank or include the Not Available (NA) value.
In turn, the second level validation, which will be mandatory as from the end of October 2015, will refer to the verification that the values reported in the fields comply in terms of content and format with the rules set out in the technical standards.
MiFID II ancillary activity exemption - competitive handicap?
- Category: MiFID
MiFID II ancillary activity exemption is sometimes perceived as a some sort of a safe harbour for commodity trading firms - for many not easy achievable, due to tight thresholds proposed in the draft level 2 legislation.
This harbour may, however, occur not so safe, and, equally, competitively disadvantageous.
EU energy and financial regulators in a dispute when energy contracts "must be physically settled"
- Category: MiFID
MiFID II interpretation undermines the EU Internal Electricity Market? The European energy regulators ACER and CEER unanimously argue this way and disagree with ESMA.
What sparked the fiercest discussion is whether the "REMIT carve-out" will be available to intermediaries without production, consumption or storage capabilities.
Hedging after 3 January 2017 - not for everybody
- Category: MiFID
Assume, the non-financial counterparty, in effect of, for example, modifications of the ancillary activity exemption, finds itself above the respective activity thresholds and, consequently, is driven under the financial regulation. Among MiFID II unexpected impacts is the fact, the legitimate hedging needs of the above entity may, potentially, by constrained by position limits. Why? Hedging exemption - in general foreseen when calculating the group's position limit - is not available to financial counterparties.
It appears, such conglomerate, currently being beyond financial regulation, will face the risk of its hedging transactions being cut by the position limit after 3 January 2017.