|Divergent opinions on the scope and functions of the transparency regime for the wholesale energy market - the review of the contributions to the recently-closed public consultation|
|Monday, 10 October 2011 06:46|
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According to the revealed contributions to the consultation on the enhanced transparency regime for the wholesale energy markets the German utilities RWE and EnBW share the view that generation and consumption units need to be treated the same.
RWE and EnBW differ, however, in whether the aggregate or unit-by-unit data should be published.
As it seems, it is the EdF that reaches one of the core problems, which is the need that the transparency regime should not require divulging the commercial and hedging strategies of market players, which remain strictly confidential.
As was mentioned in the post ‘Provisions on companies affiliations added to REMIT by the European Parliament on 14 September 2011’ on 16 September 2011 lapsed the time-limit for submitting responses in a public consultation on fundamental electricity data transparency. Released document ‘Public Consultation Document Guidelines On Fundamental Electricity Data Transparency’ referred to the ERGEG Advice Comitology Guidelines on Fundamental Electricity Data Transparency Ref: E10-ENM-27-03 of 7 December 2010. The said consultation as well as ERGEG advice are closely related to REMIT and constitute the input to the future implementing acts of the Commission.
As I have signalled in the above-mentioned post, in the consultation document the European Commission posed interesting issues, among others:
‘Points 18.104.22.168 and 22.214.171.124 of ERGEG's guideline require publishing ex-ante information on planned and ex-post information on the unplanned unavailability of generation units including the name of the generation units, location, bidding area, available capacity during the event, installed capacity, etc. Do you consider that publishing this information on a unit-by-unit base would be likely to create any competition concerns? If yes, how does this concern relate to the potential benefit this information yields to market participants? Could this concern be remedied in a way which would nevertheless enable market participants to properly assess such an important change in a supply fundamental (e.g. by publishing data in aggregated form, for instance per production type and balancing zone)?’
Currently, the contributions have been published on the consultations website http://ec.europa.eu/energy/gas_electricity/consultations/20110916_electricity_en.htm.
It is apparent from the responses of market participants to the public consultation, the issue of whether the names of generation and consumption units or aggregated data should be published, triggered off the major controversy.
The German RWE presented the view that ‘unit-by-unit publication of generation and consumption data is crucial for the largest possible range of market participants to be active. By contrast, aggregated information gives market participants (particularly non incumbents) far less insight as to the market impact of individual events and, therefore, will mean fewer active companies, lower liquidity and less efficiency gain for the market’.
RWE regards unit-by-unit information to fall under the auspices of REMIT and that publication of such data be a legal requirement.
RWE asserts, furthermore, that mere ex-ante aggregated data do not allow market participants to assess the consequences of an outage. They have no indication how long the outage will continue and they are unaware of the unit's location in the network (which is crucial if the network is congested). So the market needs to know:
• the name of the consumption units,
• the location and bidding area,
• the installed capacity,
• available capacity during the event, and
• the expected duration of the outage.
According to the German utility stance these pieces of information are also crucial for the ex-post evaluation. Understanding past events and their resulting impact on prices is an indispensable element of forming a forward view on market developments. In addition to receiving important data in advance, traders therefore also need to understand actual events through analysis of detailed information after the event. An hourly update of the unit-by-unit information is crucial to give market players the required transparency and the amount of total supply.
The RWE views on the necessity of the unit-by-unit publication of generation and consumption data isn’t, however, shared by other utilities also in the German wholesale electricity market. EnBW does not perceive any need to disclose the name of the consumption unit but agree that the information on the unavailability of consumption units can be disclosed anonymously identifying the bidding area, timeframes and unavailable load. According to the EnBW some specific information as name and place of the asset are not relevant for the market and should not be published.