(Montel) The European Commission’s market reform proposal includes elements that could have negative consequences for the development of short-term trading in the EU, said power exchange Epex Spot.
“The proposals… have the potential to create nothing less than a disruption of short-term markets. This may not be obvious at first glance but it is evident,” said Ralph Danielski, CEO of the Paris-based exchange, in a statement on Tuesday.
The statement came on the same day as EU energy ministers gathered in Brussels to discuss the electricity market reform proposal put forward by the EC two weeks ago.
Danielski was particularly critical of an EC proposal to set up a single legal entity tasked with governing market coupling in the intraday and day-ahead markets – which is currently done through co-operation between power exchanges.
EU regulatory agency Acer has previously said this infrastructure would be more suited to a legal entity at EU level, leaving exchanges to their core business of facilitating power trading on their platforms.
Acer proposed two years ago to introduce a single market coupling operator in a review of the EU's guidelines for Capacity Allocation and Congestion Management (CACM), a process that was put on hold during the energy crisis that started last year with Russia's cut in gas exports to the EU. The proposal re-emerged in the commissions's proposal for market reform in March, said Epex.
“There is no clarity on the needs, objectives or the benefits of such an entity. What is clear is that its implementation would create a loss of time and resources, while creating a centralised market setup, newly introducing a single point of failure for the pan-European power market,” said the CEO, adding that Epex Council, which speaks for its members, agreed with this view at a recent meeting.
Rival power exchange Nord Pool also previously criticised the proposal for a joint market coupling operator.
“Monopoly setup”
Danielski also criticised the EC’s proposal for continuous sharing of order books among exchanges, even when there is no cross-border capacity.
“This measure is a first step towards a monopoly setup on a market that has been thriving under competition. We really need to focus efforts on those areas where further progress can be made to foster the internal energy market and clearly must avoid any ideas that have been proven to be counterproductive,” he said.
This view contrasts with that of Nord Pool, which has long campaigned for full order book sharing.
The statement came on the same day as EU energy ministers gathered in Brussels to discuss the electricity market reform proposal put forward by the EC two weeks ago.
Danielski was particularly critical of an EC proposal to set up a single legal entity tasked with governing market coupling in the intraday and day-ahead markets – which is currently done through co-operation between power exchanges.
EU regulatory agency Acer has previously said this infrastructure would be more suited to a legal entity at EU level, leaving exchanges to their core business of facilitating power trading on their platforms.
Acer proposed two years ago to introduce a single market coupling operator in a review of the EU's guidelines for Capacity Allocation and Congestion Management (CACM), a process that was put on hold during the energy crisis that started last year with Russia's cut in gas exports to the EU. The proposal re-emerged in the commissions's proposal for market reform in March, said Epex.
“There is no clarity on the needs, objectives or the benefits of such an entity. What is clear is that its implementation would create a loss of time and resources, while creating a centralised market setup, newly introducing a single point of failure for the pan-European power market,” said the CEO, adding that Epex Council, which speaks for its members, agreed with this view at a recent meeting.
Rival power exchange Nord Pool also previously criticised the proposal for a joint market coupling operator.
“Monopoly setup”
Danielski also criticised the EC’s proposal for continuous sharing of order books among exchanges, even when there is no cross-border capacity.
“This measure is a first step towards a monopoly setup on a market that has been thriving under competition. We really need to focus efforts on those areas where further progress can be made to foster the internal energy market and clearly must avoid any ideas that have been proven to be counterproductive,” he said.
This view contrasts with that of Nord Pool, which has long campaigned for full order book sharing.
