Transcript Florence Forum Presentation Sept 2005

Guidelines for Good Practice on
Information Management and
Transparency
EuroPEX
Comments and Suggestions
Brussels, 6th of July 2006
Transparency – GGP-IMT Public
Consultation Process
• EuroPEX shares ERGEG’s belief that
proper information management and
adequate transparency enhance the
development of liquid, transparent and
competitive electricity markets
• EuroPEX was happy to learn that in the
draft evaluation ERGEG accepted all of our
comments perceived to be in direct relation to
the draft GGP-IMT but misses some of the
issues raised evaluated
Transparency – The Goals
• Provide transparency on fundamentals that have a
“noticeable impact on prices” in order to create a
more level playing field and thus enhance market trust
by reducing the risk of insider trading, and abuse of
dominant position
• Facilitating monitoring of market developments for
both regulators and other stakeholders
• Promoting market participation resulting in
increased competition and liquidity of the markets
• Reducing the risk that the data available provides a
distorted picture of the markets and their openness to
manipulation
• Levelling playing field for the different trading
arrangements (PX-based and OTC) in similar products
GGP-IMT – Consistency and
Adequacy of Information Disclosure
• Minimum standards to be applied EU-wide
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coverage – minimum set of information disclosed
level of detail – compatible for the minimum set of information
definition – compatible to allow effective use of information
time resolution and updating frequency – harmonised
format – ready to use by IT systems
• Public disclosure of ring-fencing and “firewalls”
methods applied (and approved by the regulator)
between the grid operation branches and the rest of
vertically integrated companies in order to raise trust
in the markets
• Information is to be published rather than provided
on request
GGP-IMT – Sources of Information
• Clear distinction between different roles of parties
involved in information disclosure to be defined
– Information Source as the party to which the information
relates and from which it originates
– Information Publisher as the party which is responsible for
publishing the information
• The list of ‘natural’ information owners is to be
adjusted and amended
– “clearing and settlement agents” should be referred to in a
more precise manner as “settlement agents” to avoid any
possible confusion with Clearing Houses
– reference should be added to “Brokers” as a separate
category, as these agents may be able to act as information
source on OTC deals
GGP-IMT – Focus of Transparency
Information
• Bid/Price area to be defined as the basic unit
for geographical resolution of transparency data
provision instead of control area previewed in
the draft GGP-IMT and announced for the final
document
– effective disclosure of market information requires
focusing on the relevant market unit
– aggregation on the control area level does not
always provide the information needed by the
market participants, but rather the bid/price area is
often more meaningful
GGP-IMT – Transparency in the
Wholesale Electricity Market
• Transparency requirements to apply in a compatible manner to
organised wholesale markets operated by PXs and to OTC markets
– same timing and frequency standards for publication of information
related to trading in similar products, irrespective of the way in which they
are traded
– a high degree of transparency and information disclosure already
achieved at organised wholesale markets operated by PXs
• Responsibility for disclosing information should rest with the
trading parties
– in the case of trading through organised exchanges, the disclosure
requirements could be automatically fulfilled by the exchange operator on
behalf of the trading parties
– OTC trading parties could mandate brokers – if they are involved - to
disclose information on their behalves, without prejudice to the trading
parties’ responsibility if the broker does not fulfil the requirements
– the requested information from both PX and OTC trades can be
delivered to PX responsible for publishing such information as it is
the case already for standardised products cleared by the PX clearing
house in, for example, the Nordic Market (Nord Pool) and Germany (EEX)
GGP-IMT – Common Information
Publisher
• Common information publisher to be required for each
jurisdiction in order to ensure effective and non-discriminatory
access to disclosed market information
– publishing all electricity market-related information that is subject
to disclosure requirements
– ensuring time and logical consistency of published data
– could be identified by voluntary agreement among all stakeholders
or designated by relevant authority
• A common information provider should prove that it:
– has the technical ability and competence to deal effectively with a
large amount of market-related data
– is capable of managing commercially-sensitive information
– will act independently from market participants
• Power Exchanges (PXs) may effectively act as common
information publishers as they satisfy all the criteria above
GGP-IMT – PXs as Common
Information Publishers
• Improving effectiveness of information publishing and
transparency
– single point of reference for market data in a jurisdiction
– timely and logically consistent disclosure of all relevant
information in a jurisdiction (or more of them)
• PXs have no direct interest in the markets and can gain no
advantage from withholding information
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independence from market participants
non-discriminatory access to information disclosed
proven capability to manage commercially-sensitive information
technical competence and established information systems
already in place
• PXs can facilitate cross-border access to information as
their membership is already multinational
Experience – Several PXs Already Act
as Common Information Publishers
• Nordic (NordPool), Spanish (OMEL), Italian (GME) and
German (EEX) PXs currently publish a large amount of data
originating from the TSO, generators and other market participants
• The information is continually published in appropriate time
frames (detail information refers to at least one PX)
– ahead of the daily market
load forecasts, available interconnection capacity, total and available
generation capacity, planned outages and incidental failures, etc.
– after the daily market
market prices and volumes, supply and demand curves, marginal
price-setting technologies, actual load, planned and actual flow
between the price zones, production level, consumption level,
congestion volumes and prices, imbalance volumes and prices, etc.
– subject to delayed publication
daily market bids and offers, base daily matching and operating
schedules, daily viable schedule, etc.