Transcript Legal and Regulatory framework Regional Power Exchange Issues

Legal and Regulatory framework
Regional Power Exchange Issues
Apr 4, 2006
Kjell A Barmsnes
[email protected]
Success factors for a Regional
PX
Support from the TSOs
Flexibility in detailed rules and
regulations
Information collection and distribution
Non-discriminatory access and
participation
Access to interconnector capacity
Tariff structure
Legal framework - Norway
Objectives, principles
Organisation of infrastructure
Legislation / Energy Act
Licensing issues
Implementation of Energy Act
Ministry
Industry structure and responsibilities
Overall market rules
Provisions / Regulations
Executing body of rules and provisions
Regulator
Economic regulation of monopolies
Guidelines
Management of licenses
Market supervision
Operational procedures and detailed rules for
power trade and System Operation
PX – TSO – Market
Participants
Activities based on overall principles
defined by Legislation, Ministry and
Regulator
Operational Agreements
Grid Code
Market Code
Support from the TSOs
PX viewed as a tool to balance the system
Access to interconnector capacities
Guaranteed delivery of physical PX
contracts
TSO to purchase losses at the PX
Flexibility in detailed rules and
regulations
PX should be entrusted to work out and
manage the detailed rules for its
operation
• Flexibility is required to adapt to new market
conditions, without comprehensive approval
processes
• Procedures for changes to rules etc. must be agreed
The regulator should issue licenses to the
PX defining the framework of operation,
not all details of the operation
• Regulator to intervene if license requirments are not
met
Information collection and
distribution
Relevant market information to be
collected from and distributed to
participants
Regulators to defined minimum
requirements
Obligation to provide information must be
supported by the legal framework and
agreements
Non-discriminatory access
and participation
Treat all participants equally
• Access to market based on predefined technical and
financial criteria
Low barrier to entry
• Low entrance fee
• Reasonable entrance procedures
• Diversity and a large number of active participants
stimulate liquidity
Access to interconnector
capacity
Ideally, all capacity to the PX
• Optimal use of available transmission capacity
• Easy to use
At least a share of the capacity should be
reserved for PX trade
Unused capacity should be allocated to
PX trade
Tariff structure
Separate transmission tariffs
Transparant tariffs
Harmonized tariff principles
Non-distance dependent tariffs
Locational signals OK
No border tariffs
Summary
A regional PX needs support from
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•
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Ministries
TSOs
Regulators
Participants
Success factors for a Regional PX
• Liquidity
• Transparency and trust in prices
• High number of active participants