ACER Recommendation 06-2013 on REMIT Records of Transactions

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RRecommmenndatioons

to the Commmissionn as regards thee recordds of wholesalle energgy markket ttransacctions, inncludinng orderrs to traade, acccordinng to AArticle 8 of Regulation (EU) Noo 1227/22011 conncerning balanncing market annd transsportatiion conntracts

26 March 2013

AAccording to Article 7((3) of Reguulation (EU)) No 1227/22011 on whholesale Ennergy MMarket Integrity and TTransparenccy (“REMIT”), the Agency for thee Cooperatioon of EEnergy Reggulators (thee “Agency” or “ACER””) may makke recommeendations too the CCommissionn as to the records off transactions, includinng orders too trade, whhich it cconsiders are necessary to effectively monitoor wholesalee energy maarkets.

TThe Agenccy has consulted wiith interestted partiess, includingg with Nattional RRegulatory Authorities (“NRAs“), ccompetent financial suupervisory aauthorities in the MMember Sttates, natioonal compeetition authhorities andd ESMA and provideed its RRecommendations to the Commmission on 23 Octobber 2012. HHowever, wwhen pproviding itss Recommmendations, the Agenccy announcced its intention to loook in mmore detail into balanccing market and transpoortation conntracts.

TThis documment containns the Recoommendatioons to the CCommissionn as regards the RREMIT recoords of wholesale enerrgy market ttransactionss, including orders to ttrade, oon balancing markets aand in transsportation ccontracts, which it conssiders necesssary tto effectiveely monitor wholesalee energy mmarkets andd as regards the REEMIT implementinng acts accoording to Arrticle 8 of REMIT.

Relatedd Documennts

 ACEER Work Prrogramme 22013, http://www.acer.europa.euu/portal/page/portal/ACCER_HOMEE/The_Agenncy/Work_pprogramme/ ACEERWP%2022012FINAL.pdf

 ACEER Recommmendations to the Commmission ass regards thee records oof wholesalee energy marrket transacctions, includding orders to trade, acccording to Article 8 of f Regulationn (EU) No 1227/201, 23 OOctober 2012, http://www.acer.europa.euu/remit/Docuuments/Reccommendattions%20onn%20REMITT%20Recorr ds%%20of%20traansactions..pdf

 ACEER Guidancce on the appplication off the definitions set outt in Article 22 of Regulattion (EU) No 11227/2011 of the European Parliaament and oof the Council of 25 Occtober 2011 on nd whoolesale enerrgy market iintegrity andd transpareency, 2 edition 2012, http://www.acer.europa.euu/remit/Docuuments/1st__edition_ACCER_guidance.pdf

 ACEER Guidancce on the appplication off the definitions set outt in Article 22 of Regulattion (EU) No 11227/2011 of the European Parliaament and oof the Council of 25 Occtober 2011 on st whoolesale enerrgy market iintegrity andd transpareency, 1 edition 2011, http://www.acer.europa.euu/remit/Docuuments/1st__edition_ACCER_guidance.pdf

 REGGULATION (EU) No 12227/2011 OOF THE EURROPEAN PARLIAMENNT AND OF THE COUUNCIL on wwholesale energy markket integrity and transpaarency, http://eur-lex.euuropa.eu/LeexUriServ/LLexUriServ.ddo?uri=OJ:LL:2011:326:0001:00166:en:PDF

 REGGULATION (EC) No 7113/2009 OFF THE EUROOPEAN PAARLIAMENTT AND OF TTHE COUUNCIL of 133 July 20099 establishinng an Agenccy for the CCooperation of Energy RRegulators

http://eur-lex.euuropa.eu/LeexUriServ/LLexUriServ.ddo?uri=OJ:LL:2009:211:0001:00144:EN:PDF  REGGULATION (EC) No 7114/2009 OFF THE EUROOPEAN PAARLIAMENTT AND OF TTHE COUUNCIL of 133 July 20099 on conditioons for acceess to the network for ccross-bordeer exchhanges in eelectricity annd repealingg Regulation (EC) No 11228/2003, http://eur-lex.euuropa.eu/LeexUriServ/LLexUriServ.ddo?uri=OJ:LL:2009:211:0015:00355:EN:PDF  REGGULATION (EC) No 7115/2009 OFF THE EUROOPEAN PAARLIAMENTT AND OF TTHE COUUNCIL of 133 July 20099 on conditioons for acceess to the natural gas ttransmission networks and repealing RRegulation ((EC) No 1775/2005, http://eur-lex.euuropa.eu/LeexUriServ/LLexUriServ.ddo?uri=OJ:LL:2009:211:0036:00544:EN:PDF

Tabble of Coontents

1 Inntroductionn

Backgrround

On 23 OOctober 20012, the Aggency providded the Coommission wwith its Reccommendattions on thee Recordss of Transaactions, including ordeers to tradee, which it cconsiders nnecessary to effectively monitor r wholesale energy maarkets and as regardss the REMITT implemennting acts aaccording too Article 88 of REMIT..

The Aggency consiiders thesee recommenndations ass a sound basis for thhe development of thee REMIT records of transactionns and impplementing acts. The rrecommenddations werre consultedd with releevant stakeeholders, inccluding ESMMA, nationaal financial mmarket authhorities and competition authoritties. Responnses received were takken into acccount as muuch as posssible.

In its reecommendaations of 233 October 22012, the AAgency indiccated its inttention alsoo to develop recommmendations on the REEMIT recordds of transaactions andd implementing acts foor balancingg market contracts and transporrtation contracts and too consult reelevant stakkeholders ahhead of their adoption.

In the mmeantime, the Agencyy has conssulted with ENTSO-E and ENTSSOG on thee records oof transacttions for baalancing maarket contracts and trannsportation contracts. Their viewss, as well as stakehoolder views expressed during the public conssultation of the draft reecommendaations, weree taken innto account as much ass possible.

Objective of thesee recommeendations

These rrecommenddations commplement the Agency’ss recommenndations froom 23 October 2012 as regardss balancing market contracts and ttransportatioon contractts.

The purrpose of thee recommenndations prresented in this documment is to asssist the Coommission in drafting the REMITT implementting acts acccording to AArticle 8 of tthe Regulattion.

2 Recommenddations on Records oof Transacttions for baalancing mmarket contracts

Backgrround

Contraccts in balanncing markkets are coovered by tthe definitioon of wholeesale energgy products accordinng to Articcle 2(4) of REMIT and balancingg markets are covereed by the definition oof wholesaale energy markets acccording too Article 2(66) of REMIT. Thereforre trading iin balancingg market contracts faalls within thhe scope off REMIT.

According to Article 8(1) of RREMIT, maarket participants, or aa third partyy on their bbehalf, shaall provide the Agenccy with a reecord of wholesale eneergy market transactioons, includinng orders too trade, oon the basiis of the CCommission’s implemeenting acts. In its recoommendatioons from 233 Octoberr 2012, thee Agency cconsidered that for reecords of ttransactions in balanccing markeet contractts, Annexess II.1, II.2 aand II.3 could be takenn as a reference, but inndicated itss intention too consult on that isssue separattely with TSSOs or perrsons organnising thesee markets oon behalf oof TSOs bbefore recommending records of transactionns for the rreporting of f such information. Thee Agency furthermoore recommmended thaat the implementing acts shoulld stipulatee a phasedd approacch by delayying the repoorting of reccords of traansactions in balancingg market coontracts by 66 months.

Responnses on thee Consultaation Paperr

The Ageency has inn the meanttime, in adddition to its public conssultation, coonsulted bilaterally with relevantt stakeholdeers.

Recommendationns

On the basis of thhe Agency’ss own viewws and takinng into acccount the reesponses reeceived, thee Agency recommennds the folloowing:

Recommendationn on recordds of transsactions inn balancingg market ccontracts: TThe Agency recommmends that tthe data coollection of records of ttransactionss in balanccing market contracts is postponned until the relevant network coodes apply.. Separate implementing acts for records oof transacttions in baalancing maarket contrracts should take intoo account these netwwork codess. Balancing market ccontracts shhould thereffore currenttly not be included in thhe list of conntracts to bee reportedd. The Ageency considders that ssuch separaate implementing actss for balancing markeet contractts should aapply after the expiraation of a relevant transitory peeriod of 122-24 months following the day oof entry intoo force of thhe Networkk Codes on Electricity Balancing and on Gas Balancing

Until thee entry into application of such separate impllementing aacts, nationaal regulatoryy authorities should collect infoormation annd monitor balancing markets onn the basiss of their coompetences rd under thhe 3 energgy package on a regulaar basis, paarticularly puursuant to AArticles 35 eet seq. of thee Electricity Directivee and Articles 39 et seeq. of the GGas Directivve. They shhall regularly inform thee Agency about the balancing mmarket deveelopments aand the outtcome of their monitoriing activities in the context of thhe cooperattion with thee Agency, aaccording too Article 16(1), subparaagraph 3, oof REMIT, in order too enable the Agency tto carry outt its monitooring of whoolesale eneergy markets accordinng to Article 7(1) of RREMIT effecctively and efficiently, in particulaar as regarrds potentiaal cross-mmarket abuse cases.

Explanaatory text

Balancing marketss, as defineed in the reelevant Fraamework Guidelines, nnamely the Frameworrk Guidelinnes on Gas Balancing in Transmission Syystems (FGGB-2011-G-002) from 18 Octobeer 2011 aand the Frramework Guidelines on Electrricity Balanncing (FG--2012-E-0099) from 188 Septemmber 2012, are currently still veery differennt across Europe. Thhere are ccurrently noo Europeaan standarddised produucts. This wwould makee the pan-EEuropean mmonitoring oof balancingg marketss very difficcult. Thereffore, for thhe sake of efficiency, it is recommmended tto await thee relevantt balancingg network ccodes which foresee hharmonisation of prodducts on thhe balancingg marketss. The relevvant Framewwork Guidelines stipulaate that the network coodes on ballancing shaall take preecedence oover relevaant national frameworkks (legislation, regulattion, codes, standardss, etc.) forr cross-bordder and marrket integraation issues and national framewoorks shall bee adapted too the exteent necessaary to ensurre proper immplementatioon at the naational levell.

3 Recommenddations on Records oof Transacttions for traansportatioon contraccts

Backgrround

Article 22(4)(c) and (d) of REMIT specifiically definees contracts relating tto the transsportation oof electricity or naturaal gas in thee Union andd derivativess relating too the transpportation of electricity oor natural gas in the UUnion as wwholesale ennergy produucts. Thereffore, the traading of thesse contracts falls within the scoppe of REMIT.

According to Article 8(1) of RREMIT, maarket participants, or aa third partyy on their bbehalf, shaall provide the Agenccy with a reecord of wholesale eneergy market transactioons, includinng orders too trade, oon the basiis of the CCommission’s implemeenting acts. In its recoommendatioons from 233 Octoberr 2012, thee Agency understoodd transportaation contraacts accordding to Artticle 2(4) oof REMIT as capacityy contracts for the trannsportation of natural ggas or electtricity in thee Union. Thee Agency consideredd that for reecords of traansactions in transporrtation contrracts, Anneexes II.1, II.22 and II.33 could be taken as a referencce, but indicated its inntention to consult onn that issuee separattely with TTSOs or ppersons organising thhese markkets on beehalf of TSSOs beforee recommmending reccords of trransactionss for the rreporting off such infoormation. TThe Agency furthermmore recommmended thhat the implementing aacts shouldd stipulate aa phased aapproach by delayingg the reportting of recorrds of transactions in trransportatioon contractss by 6 montths.

Responnses on thee Consultaation paperr

The Ageency has inn the meanttime, in adddition to its public conssultation, coonsulted bilaterally with relevantt stakeholdeers.

Recommendationns

On the basis of thhe Agency’ss own viewws and takinng into acccount the reesponses reeceived, thee Agency recommennds the folloowing:

Recommendationn on recorrds of trannsactions iin transportation cappacity conntracts: Thee Agency maintains its positionn expressed in its reccommendattions from 23 Octoberr 2012. Thee implemeenting acts should stippulate a phhased approoach for traansportationn capacity ccontracts by delayingg the reportting of recorrds of transactions in trransportatioon capacity contracts bby 6 monthss, unless energy coommodity aand transpoortation caapacity are in fact obtained in one singlee transacttion. The Agency believes thaat the repporting conntent of mmarket trannsactions oof transportation capaacity contraacts, includinng market ccoupling contracts listeed by powerr exchanges which mmake the avvailable trannsmission ccapacity bettween two mmarket areaas tradeablee in the formm of Phyysical Transmission RRights (“PTTR“), shouuld be maade accordding to the Agency’s recommmendations from 23 OOctober 2012, on the basis of Annnexes II.1, II.2 and II.3 of thesee recommmendations with additional fieldss reflecting the specifficities of ttransportation capacity contractts on whicch the Ageency has consulted during its ppublic consuultation. Thhe reportingg content of primary market traansactions bby TSOs, oor third parties acting oon their behhalf, also on behalf of the othher markett participannts, could, however, be limitedd to the rreporting oof disaggreegated trannsparency iinformation according to Regulations (EC) NNo 714/20009 and (ECC) No 715//2009, incluuding relevaant guidelinees and netwwork codes.

As exprressed in thhe recommeendations frrom 23 Octoober 2012, the recordss of transacctions shouldd include lifecycle information on the prre- and poost-trade sttages of a transaction, includingg information on the physical seettlement of the contracct. This alsoo applies to transportattion capacity contractts. In particcular, for thhe purposee of monitoring the immpact of maarket coupling for dayyahead aand intradaay markets, the Agenccy considerrs it necesssary to collect informaation on Neet

Transfeer Capacity (NTC), Avaailable Trannsfer Capaccity (ATC), and, followwing the swwitch to flowwbased mmarket coupling, Available Crosss Zonal Cappacity for day-ahead oor intraday markets, as well as informationn on the nominations oof market cooupling conntracts by ceentral counterparties too TSOs oon the correesponding bborders of tthe contractts. The impplementing acts shouldd enable thee Agency to collect ssuch informaation accorrding to Artiicle 8 of REEMIT.

Explanaatory text

The bilaateral consuultations didd not indicatte any reason why the Agency shhould modifyy its position expresssed in its reecommendaations from 23 Octobeer 2012. Thhe Agency therefore mmaintains itts positionn expressedd therein.

The addditional fieldds to be addded in Annnexes II.1, II.2 and II.33 of the recoommendatioons from 23 Octoberr 2012 as aa new sectioon “Additionnal data forr transportattion capacitty contractss” before thee section “Lifecycle information”” are the following (nummbering to bbe adjusted accordinglyy):

Additionaal information for capacity ccontracts ffor the transportaation of eleectricity or natural gaas

1. Transporrtation typee Identifiees the transsportation tyype of the ccontract.

2. Originating Market Identifiees the originnating markket area conncerned.

3. Destinatiion Market Identifiees the markket area where the deliivery will take plaace.

4. Intrasysttem(s) Where applicable the system(s) used to transport betweeen the sellerr’s and buyeer’s system.

5. Interconnnection Pooint(s) Where applicable identificatioon of the border(s), border point(s) or entry/exit point(s) of a transpoortation contract.

4 Conclusionss and takinng the way forward

This doocument coontains the Agency’s Recommenndations onn the Records of trannsactions on balancinng market contracts aand transpoortation conntracts under REMIT which it coonsiders aree necessaary effectiveely and efficciently to moonitor wholeesale energgy markets uunder the RRegulation.

The Ageency considders these recommenddations as ccomplemennting its recoommendations from 233 Octoberr 2012 and a sound baasis for the developmeent of the RREMIT records of transsactions andd implemeenting acts..

The Aggency is aavailable too support the Commmission serrvices and to providee additionaal recommmendations in the coursse of the fuurther development of tthe REMIT implementiing acts andd will conttinue the invvolvement oof stakeholdders on issuues related to the impleementation of REMIT.

Document title: Publishing date: 03/04/2013 We appreciate your feedback Please click on the icon to take a 5’ online survey and provide your feedback about this document Publishing date: 04/04/2013 Document title: We appreciate your feedback Please click on the icon to take a 5’ online survey and provide your feedback about this document