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EFET Position on Information Transparency

EFET Position on Information Transparency. Paul Dawson, Barclays Capital ERGEG Public Hearing on Transparency 6 th July 2006. Lack of information transparency is a key barrier to greater competition and liquidity.

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EFET Position on Information Transparency

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  1. EFET Position on Information Transparency Paul Dawson, Barclays Capital ERGEG Public Hearing on Transparency 6th July 2006

  2. Lack of information transparency is a key barrier to greater competition and liquidity • Traders need to understand supply, demand and transport fundamentals to take a view on future price movements • Customer and market confidence requires ability to explain price movements in terms of fundamentals • Ability to understand and quantify associated risks is essential to liquidity provision and greater competition • Asymmetric information increases risk and reduces liquidity • The lack of information transparency is a key barrier to greater competition in the power and gas sectors • Commission and ERGEG initiatives to address this problem are hugely welcome

  3. Physical generation data released Unit-by-unit Complete aggregated Incomplete Nothing

  4. Generation data releasedand “available” Unit-by-unit Complete aggregated Incomplete Nothing

  5. Actual demand data release Real-time Partial Nothing

  6. Perceived risk of collusion should not limit information made available • Collusion is also a concern in opaque markets • Aggregation can address concerns for ex ante information • No grounds for restricting ex post production data & standing capacity data • Transparency allows traders to provide liquidity and competition even in presence of collusion • Transparency = effective scrutiny from participants, regulators, academics etc = effective regulation • Anti-trust and market abuse rules also apply • Delaying information release pending the development of sufficient competition & liquidity is inherently circular • Benefits of transparency >> potential detriment

  7. Commercial confidentiality should not unduly limit information made available • Confidentiality of ex ante information is arguable, but limited aggregation addresses concerns • Standing data and ex post production data should not present major concerns (borne out by UK, Spain and Nordpool experience) • Trading is a zero-sum game • Case for temporary differentiation for small independent generators in isolated and illiquid national markets • Even delayed plant-by-plant information is hugely valuable • Commercial data provision = data is no longer confidential (but coverage is partial and costly)

  8. Information requirements: generation and demand • Ex post, actual generation data • Plant-by-plant • As soon as practicable after generation • Prompt publication of unplanned outages • Ex ante generation data • Installed capacity by plant • Annual maintenance and availability with quarterly updates • Planned availability for the coming week • Aggregated by fuel per price zone or smaller areas if feasible • Timetable for transition to plant-by-plant disclosure • Demand • Hub-by-hub forecasts per TSO forecasts and at least at D-1 • Close to real-time actual • Historical data for past 3 years

  9. Information requirements: transmission capacity etc • Forecast capacity, maintenance etc from year-ahead to day-ahead • Actual outage details • Capacity requests, offers and bookings (including any long-term contracts and bookings) • Thermal, ratings and flows • Immediate publication of assumptions and estimation methodologies is also required (in particular treatment of contingency safety margins)

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