|The definition of ‘inside information’ under REMIT – dubious without the EC and market input (II)|
|Wednesday, 11 May 2011 07:00|
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Are such categories of data like operational dispatching decisions and the bidding behaviour of electricity producers at power exchanges, interconnection auctions, reserve markets and over-the-counter-markets, the per-plant and per-hour information on available generation capacity and committed reserves, allocation of those committed reserves on a per-plant level etc. all inside information under REMIT?
Continuing efforts to find out concrete sorts of data covered by restrictions linked with the categorisation as ‘inside information’ under REMIT proposal it is appropriate to point at the beginning at some clues flowing from the very definition contained in Article 2 of the REMIT. The wording thereof mentions in this context:
1) information related to the capacity of facilities for production, storage, consumption or transmission of electricity or natural gas,
a) legal or regulatory provisions at Union or national level,
b) market rules,
on the relevant wholesale energy market.
Beyond the abovementioned points, the category of information listed expressis verbis in the definition (however only by way of example) is information which is required to be made public in accordance with the provisions of Regulation (EC) No. 714/2009 or Regulation (EC) No. 715/2009, including guidelines and network codes adopted pursuant to those Regulations.
Regulation No. 714/2009 – quest for ‘inside information’ relating to the electricity generation
Many of the contained in the Regulation No. 714/2009 (further referred to as ‘Regulation’) disclosure requirements regards the transmission and distribution system operators which are generally forbidden (with a few exceptions) to carry out trading in electricity. Also trading firms and electricity brokers systemically are in a position that – the legal order violations excepting – they shouldn’t have the premature access to the market-sensitive inside information. In a specific situation are, however, electricity generators which are present on the electricity wholesale market and are pursuing their own trading strategy. The important part of the set of data published by the TSO and DSO is furnished by the generation sector. Given the scale of concentration of the electricity production on a particular European markets, it could be conceived that a single producer could – in theory - influence on market trends and tendencies. Given also the strict interdependencies between electricity and emissions markets (however the latter is more pan-European at present), both of them could be disrupted. These threats are all the more exacerbated when electricity generators are part of a group which has also a trading arm (which is a common situation).
In an above-described situation, from an electricity producer point of view, the need to precisely identify the possible items on the “inside information’ list is absolute. Article 15(4) and (5) of the Regulation imposes on the market participants the obligation to provide the transmission system operators with the relevant data, which the TSOs are obliged to publish. Considering the generation side the ‘relevant data’ listed by the Article 15(4) of the said Regulation are availability and actual use of generation, balancing power, reserve capacity. Also recital 19 in the preamble to the said Regulation enumerates precise information on ‘electricity generation, supply and demand including forecasts, network and interconnection capacity, flows and maintenance, balancing and reserve capacity’ as necessary to enable all market participants to assess the overall demand and supply situation and identify the reasons for movements in the wholesale price.