|Long Term Transmission Rights Secondary Trading|
|European Union Electricity Market Glossary|
Long Term Transmission Rights Secondary Trading in the European Union Internal Electricity Market encompasses the trading of Long Term Transmission Rights (LTTRs) through which a market participant is able to buy or sell LTTRs, which were initially allocated by the allocation platform(s).
Hence, LTTRs holders are entitled to transfer all or part of their LTTRs through secondary trading to other market participants according to the corresponding allocation rules.
Also Article 14(6) of the European Commission Proposal of 30 November 2016 for a Regulation of the European Parliament and of the Council on the internal market for electricity (being part of the so-called Winter Energy Package) stipulates that capacity "shall be freely tradable on a secondary basis, provided that the transmission system operator is informed sufficiently in advance. Where a transmission system operator refuses any secondary trade (transaction), this shall be clearly and transparently communicated and explained to all the market participants by that transmission system operator and notified to the regulatory authority".
According to the procedure envisioned in Article 44 of the Network Code on Forward Capacity Allocation (FCA) and Article 42(2) of the Harmonised Allocation Rules (HAR), LTTRs holders transferring their LTTRs through secondary trading must notify the Single Allocation Platform (SAP) while the acquirer of the LTTRs must confirm to the allocation platforms the notification sent by the previous holder.
The notification of the transfer must be delivered to the no later than at 12:00 p.m. on the second (2nd) day preceding the day of delivery.
The HAR stipulate, among others, firmness provisions as well as the compensation rules (i.e. the rules according to which each Transmission System Operator responsible for the bidding zone border where LTTRs have been allocated, compensates market participants for curtailing the LTTRs).
The formal requirement for market participants before being entitled to participate in the auction(s) or perform secondary trading is to register with the SAP created according to the Forward Capacity Allocation Network Code and to meet all eligibility requirements under the corresponding allocation rules.
The Forward Capacity Harmonised Allocation Rules envisage that the SAP is required to publish a list of registered participants eligible to transfer LTTRs.
Article 43 of the HAR stipulates that “all rights and obligations resulting from the HAR” are transferred together with the LTTR.
The only exception is the payment obligation of the original LTTR holder regarding the allocation of LTTR.
Single Allocation Platform is intended to serve, moreover, as a contact center for market participants in order to perform the transfer of LTTRs.
SAP provides a communication platform (the “notice board”), on which market participants are able to indicate to other market participants their interest to transfer or purchase LTTRs, which have been initially allocated by allocation platforms.
It is noteworthy, in the light of the HAR (Article 44), the notice board serves as ancillary tool only and is not used for the purposes of evidencing contracts.
The notice board only facilitates the exchange of information between the registered participants regarding their interest in buying and/or selling Long Term Transmission Rights.
The HAR clearly states that “no agreements may be concluded via this notice board”.
Moreover, any notices published via the notice board by the registered participants “shall not be considered as an evidence for a valid and effective contract for the transfer of Long Term Transmission Rights”.
Decision of the Agency for the Cooperation of Energy Operators (ACER) No 03/2017 of 2 October 2017 on the electricity transmission system operators’ proposal for harmonised allocation rules for long-term transmission rights
Harmonised allocation rules for long‐term transmission rights in accordance with Article 51 of Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a Guideline on Forward Capacity Allocation (Annex I to the ACER Decision 03/2017), Articles 41 - 44
ACER's Q&As on REMIT, Question III.3.33
Proposal of 30 November 2016 for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), COM(2016) 861 final 2016/0379 (COD), Article 14(6)
|Last Updated on Sunday, 04 March 2018 10:08|