May 2011

Issue: May 2011

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Feature
- Regulators’ pilot project could fulfill current REMIT legislative proposals on energy market integrity and transparency

Events
- Wholeale trading passport (31 May). See calendar of next workshops

Public Consultations
- The take-off of a demand response electricity market with smart meters
- Regulatory oversight of energy exchanges 

Publications
- CEER Report on Renewable Energy  
- Press Release and Report on CEER's Pilot Project for an EU energy trade database
- CEER response to the EC on the EU 2020 Project Bond Initiative

Region in the Spotlight
- North-West gas region –a facilitator of 3rd Package implementation

Editorial
Sustainability, transparency and customers feature heavily in the European Energy Regulators work this month. 

CEER has, for the first time, published data on the cost to consumers of renewable support schemes, broken down by type of support scheme and type of technology.  Focusing on how customers can better participate in the market, CEER has launched a public consultation on how to activate the take-off of a demand response electricity market with smart meters. 

Also launched for public consultation is the ERGEG’s draft advice on the regulatory oversight of energy exchanges.

CEER has published and outline of its prototype of an EU energy trade data reporting and market monitoring. This report on an energy trade pilot project is of high relevance given the current political negotiations  on the European Commission’s proposed REMIT legislation and the idea of having a trade repository to collect wholesale energy data. CEER’s own-initiative project shows how trade transaction reporting could be carried out and demonstrates how data analysis (devised during  our 6-month pilot project)  can be used in order to identify potential market abuse (see feature article below).

At the Florence Forum, 23-24 May, CEER/ERGEG will present their work on a range of issues including on energy infrastructure cost allocation and financing mechanisms; electricity capacity allocation and congestion management; and on progress in developing the system operation framework guidelines.

 Regulators’ pilot project could fulfill current REMIT legislative proposals on energy market integrity and transparency

CEER has published an outline of its prototype of an EU energy trade data reporting and market monitoring which could safeguard market integrity and help prevent market abuse (see Press Release, PR-11-01).

Trade database relevant in the context of EU market integrity and transparency regulatory reform
The launch (this month) of CEER’s report on its pilot project on energy trade reporting and monitoring mechanism coincides with the current political debate (in European Parliament and Council) on the Commission’s REMIT proposal and the review of several pieces of EU financial market legislation (Markets in Financial Instruments Directive - MiFID, Market Abuse Directive – MAD and European Market Infrastructure Regulation – EMIR.

The recommendations from the pilot project (which was carried out from July 2010 – January 2011), gain even more relevance in the context of the current discussions on trade repository to collect wholesale energy data. The results are very positive. CEER’s project shows how trade transaction reporting could be carried out and demonstrates how market monitoring software (devised during  a 6-month pilot project) can be used for detecting market abuse.

The Regulators’ Energy Trade Data Reporting Scheme” pilot project
The “Energy Trade Data Reporting Scheme” pilot project tested the feasibility of a cost-effective standaridsed EU energy trade database. Trade reporting of standard products for power was done by trading companies directly as well as the reporting of over the counter (OTC) and exchange trades into a single database. Sample real data was used for trade data analysis in order to identify potential market abuse. The pilot has been very successful with some good lessons learned that will probably form the framework for the future transaction reporting approach under REMIT.

The European Parliament’s ITRE Committee vote on the REMIT proposals is foreseen for 26 May. CEER’s report on the pilot project (which covers issues such as Data reporting; Data Access; Monitoring; IT-Architecture; and Governance) will form the basis of CEER good practice guidelines on reporting and market monitoring that will come out later this year.

CEER consults on regulatory oversight of energy exchanges and on single trading passport
On a related issue, CEER has launched a public consultation on its draft advice on the regulatory oversight of energy exchanges. Also under ongoing consultation is the CEER draft advice on the introduction of a Europe-wide Energy Wholesale Trading Passport (the feature article of the April Newsletter) -registration if open for the workshops on 31 May.

CEER Events

Press Releases:

• Regulators propose a prototype of a central energy trade reporting scheme at EU level (PR-11-01)

Publications:

Events

See all dates of Regional Initiatives meetings (RCC, IG, SG) on the ERGEG online Calendar.  

Regional Initiatives Update

North-West gas region –a facilitator of 3rd Package implementation

Within the Gas Regional Initiative North West (GRI NW), stakeholders of ten different countries are working together to further develop the gas market at a regional level. Following an open dialogue during the Stakeholder Group meeting of November 2010, it was decided that GRI NW would concentrate on two projects in 2011 (Transparency and  Investment) and that an open dialogue on Framework Guidelines and Network codes would take place (so-called Pre-comitology meetings in GRI NW).

Following the finalisation of the work plan, the project leaders have made a first draft of the project plan and several stakeholders have given their opinion towards each project plan. At the 21st NW RCC meeting on 12 May 2011, regulators have discussed each project plan in more detail. The project plans (already circulated to participants in the IG-meeting) are now in the process of being finalised.

Transparency
The transparency project was an idea put forward by stakeholders at the November Stakeholder Group meeting. It proposes to monitor the compliance of TSOs against the transparency requirements that are set out in the Gas Regulation No 715/2009, which came into effect on 3 March 2011. 

GRI NW has twice previously conducted projects to improve Transmission and Storage transparency and have received positive feedback on the resulting improvements. This also influenced the move to enshrine greater transparency into legislation under the 3rd Energy Package. This project is being undertaken to ensure that, following this development, these new transparency requirements are being implemented correctly.

Investment
The investment project is considering whether and how to provide support to TSOs in drafting the regional investment plans. This may include providing support to define the scope of these plans, their value added compared to national and Community-wide ten year network development plans and their potential contribution to the requirements of the Security of Supply Regulation (EU) n°994/910.

The project proposes also using the GRI NW as a platform for discussion of the open season process in order to increase firm capacity from France to Luxembourg. The non-binding phase was launched at the November Stakeholders Group meeting. The outcome of discussions will be synthesised in a short paper in order to share the lessons learned from this process and to feed the European discussions on the revision of the Guidelines for Good Practice of Open Seasons Procedures (GGPOS).

Pre-comitology meetings in GRI NW region to facilitate 3rd Package Implementation
Framework Guidelines and Network Codes, currently being developed at EU level,  will have an impact on each national energy market. The Agency for the Cooperation of Energy Regulators (ACER) is responsible for drafting the Framework Guidelines and the ENTSOs TSOs for drafting the Network Ccodes in line with the Framework Guidelines.  Member States play a role in approving (or rejecting) the network codes through the comitology process so as to make them legally binding. Given these different roles, the Stakeholder Group of GRI NW also agreed that NRAs, TSOs and Member Sstates should timely discuss – in an open dialogue in their region – the content of each Framework Guideline and Network Code.

Through the GRI NW’s pre-comitology meetings, NRAs can explain the background to the principles that are in a Framework Guidelines, while TSOs can elaborate xplain how the principles in a Framework Guideline are translated in a certain way in a Network Code. As such, Member States not only gain a good
understanding of the direction that each Framework Guidelines and Network Code is going, but moreover, it also enables them to timely communicate their opinion on a specific Framework Guideline and Nnetwork Code. In turn, this will enable NRAs and TSOs to timely take these considerations into account in a timely way and also provides the opportunity to jointly identify regional aspects that should be addressed. 

The work being undertaken by GRI NW provides a good example of cross-border cooperation between the countries involved and how the Regional Initiatives can be used to facilitate implementation of the 3rd Package and be a test bed of new ideas. Through this type of regional cooperation feeding into EU decision making, these countries are able to share best practice and gain from efficiencies through coordinated work and results.  It should also facilitate stronger involvement by Member States in the Regional Initiatives, which is something that ERGEG has been advocating for some time.

This regional approach of involving Member States in the process early is complementary to the bi-annual EU Gas (and Electricity) Regulatory Fora (so called Madrid Forum for gas, and Florence Forum for Electricity) which brings together regulators, the European Commission, ENTSOs, Members States and other stakeholders to discuss, inter alia, the Framework Guidelines.  At the last (19th) Madrid Forum (21-22 March), Framework Guidelines on Gas Capacity Allocation; Gas Balancing; and preparatory work on gas tariffs was discussed which brings together regulators, the European Commission, ENTSOs, Members States and other stakeholders. 

International Activities

CEER met with the Russian federal regulator, FTS, in St. Peterburg on 17 May. 

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European Energy Regulators' News is a free, electronic newsletter and covers the period from the previous issue to the date of publication. It is your gateway to the news from Europe’s energy regulators, press releases, public consultations, advice to the European Commission, news from the Regional Initiatives, and regulation and policy developments at national level.

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