As those who trade in any EU energy market will be aware, the reporting obligations under Regulation (EU) No 1227/2011 on wholesale energy market integrity and transparency (REMIT) will apply from 7 April 2016 as regards:
- contracts concluded outside organised market places such as contracts traded over-the-counter, and transportation contracts; and
- additional reportable fundamental data from Transmission System Operators (TSOs), LNG System Operators (LSOs) and Storage System Operators (SSOs) (e.g. electricity and gas nominations, availability of LNG facilities or amount of gas stored).
This follows on from the initial phase of data collection pursuant to REMIT, which commenced on 7 October 2015. Failure to comply with REMIT can result in investigation and ultimately enforcement action by the relevant National Regulatory Authority (NRA) as reported in our previous Law-Now here.
In order to assist market participants and bring more clarity to the reporting regime, the Agency for the Cooperation of Energy Regulators (ACER) has published further guidance including: (i) a new edition of the REMIT Q&A and (ii) a FAQ on Fundamental Data and Inside Information Collection.
Large Final Consumers
There is additional guidance for final customers which have a single consumption unit (SCU) with (i) a technical capability to consume 600GWh/year of either gas or electricity, but (ii) a technical capability to consume less than 600GWh/year of the other. ACER has clarified that such customers are required to report:
- all transactions concluded on an organised marketplace (for both gas and electricity); and
- if trading outside an organised market place, all their contracts for the energy type they consume over the threshold (gas or electricity) and all their contracts for the sale of the other type of energy.
ACER has explained the reporting and registration requirements where a number of legal entities share one connection to the grid, and the site as a whole exceeds the 600GWh/year threshold (e.g. formerly integrated industrial sites which are now separated into different companies). In this instance, the reporting and registration obligations only apply to those companies which have a SCU that itself exceeds the 600GWh threshold, provided that they are not trading other wholesale energy products.
Contracts for the import or offload of LNG, including flanges that connect the LNG vessel to the LNG terminal, where delivery is in the EU, carry reporting obligations for all parties to such a contract. Reload-contracts at a regasification terminal or at a vessel where delivery is not in the EU are not subject to such requirements.
The Q&A contains further guidance, including on: (i) the obligation to report amounts of gas stored by market participants (such as TSOs); and (ii) registration requirements for operators of refuelling stations of natural gas for vehicles.
FAQ on Fundamental Data and Inside Information Collection
The requirements in relation to the reporting of gas ‘Day-ahead nominations’ where a Network User amends the nomination before the initial nomination deadline, thereby potentially being taken to have submitted multiple such nominations, have been clarified. In such a scenario, ACER believes that the last nomination before the initial nomination sent by the gas shipper shall be submitted as the ‘Day-ahead nomination’ to ACER.
ACER explains that no updates of fundamental data in respect of nominations are required to be reported to ACER by TSOs beyond a working day following the end of the gas day, unless there was a technical failure/error in the TSO system and the data was reported incorrectly. ACER also confirms that TSOs are not required to report fundamental data to ACER that refers to connection points between Distribution System Operators (DSOs) and TSOs.
The FAQ provides further guidance on corrections regarding LNG and Gas Storage data.
ACER explains that web-feeds (which shall be used to disclose inside information) are only required to be open towards ACER; however, there is a recommendation that market participants open these to all stakeholders so as to improve transparency. Although market participants are required to provide web-feeds as of 7 January 2015, ACER has stated that it will only start collecting such data as of 1 January 2017.
There is a further clarification that information submitted to ACER via the web-feeds does not need to be resubmitted to ACER in any other way. Market participants are advised that failure to provide accurate and up-to-date information regarding the virtual location of the web-feed will constitute a breach of REMIT.
The path to the implementation of both phases of REMIT has been fraught with questions as to its application, practicalities and the extent to which NRAs will enforce REMIT. Market participants and stakeholders have been continually pushing for more guidance on the reporting regime and this latest round of FAQs and Q&As from ACER is intended to offer the clarity that the market needs. In conjunction with these new or updated explanatory documents, Ofgem has also confirmed that it will act proportionately and in a resource-efficient way when it deals with any potential breaches in the early days of the second phase of data collection. Both these developments should be welcomed by the industry; however, there is a sense that further guidance and actual REMIT experience are necessary to bring greater certainty to the market.