ASOCIATIA PRODUCATORILOR DE ENERGIE ELECTRICA
HENRO
reprezentarea intereselor membrilor asociatiei, respectiv producători de energie electrică importanți din Romania și formularea de puncte de vedere in domenii de interes
ID: 921703448973-01
Lobbying Activity
Response to Interservice consultation on the electricity market design reform - REMIT
10 May 2023
On behalf of the main Romanian electricity producers, representing more than 70% of the national generation sector: We support cooperation between ACER, the National Regulatory Authorities (NRAs) and other competent financial authorities, which would increase the efficiency of electricity market monitoring and facilitate the detection of potential deviations from Regulation 1227/2011. In the context of a single electricity market, the proportion of cross-border transactions that deviate from the Regulation has increased significantly. Thus, in order to overcome the barriers related to the jurisdiction of National Regulatory Authorities, close cooperation is needed between them and ACER, which should have a coordinating or arbitration role in investigations of cross-border transactions. Regarding the empowerment of ACER to carry out on-site investigations and inspections of entities involved in potential breaches of the Regulation, we consider that this should be implemented following an iterative process: 1. Initially, ACER should notify the National Regulatory Authorities of the States involved in transactions with potential irregularities of the initiation of an investigation to be coordinated by ACER. 2. The Agency (ACER) shall designate the National Regulatory Authority which is best placed to delegate tasks to other National Regulatory Authorities, as provided for in the proposed amendment to the Regulation. 3. Each Authority shall carry out the investigation at the level of the State for which it has jurisdiction and shall continuously transmit data to the other Authorities concerned and to ACER. 4. Finally, if the investigations have not led to a result, only then can ACER intervene at the level of the Member States concerned and carry out investigations. The process proposed above for the processing of investigations involving transactions with potential breaches of the Regulation aims to reduce the time taken to resolve investigations by decentralizing tasks from ACER to the National Regulatory Authorities. Moreover, it is the NRAs that should carry out the investigations, as they have detailed knowledge of the specificities of the electricity market and legislation in the respective countries. We also believe that the Regulation should be supplemented with additional information on the role of ACER and the National Authorities in these investigations: Who appoints the National Regulatory Authority competent to delegate tasks to other Authorities? Who determines which states are covered by transactions with potential deviations from the Regulation? Who can take the initiative to launch a cross-border investigation? Furthermore, the trend in the electricity market is to allow trading as close as possible to the time of delivery, especially to correct the portfolio of renewable electricity producers. Thus, timely publication of market-relevant information that could influence the price of electricity is essential for fair electricity pricing. We support the implementation of inside information platforms and registered reporting mechanisms, whereby market participants can access inside information, if it is not commercially or security-sensitive, in a timely manner in order to establish a correct trading position. On the other hand, centralizing this internal information in dedicated platforms such as IIPs raises the issue of cyber security. There is a possibility that these platforms could be the target of cyber-attacks resulting in an individual or a group of individuals taking internal information before it is published and using it for market manipulation. Also, the unavailability of the platform(s) could lead to the conclusion of electricity transactions at a price different from that established from the supply and demand balance knowing the internal information relevant to the market. Therefore, we believe that a greater focus on the security aspects of internal information platforms is needed. At the same
Read full responseResponse to Revision of the EU’s electricity market design
10 May 2023
Forward markets We believe that the development of forward electricity markets is essential to decouple the price of the end-user's electricity bill from the price of fossil fuels, which is largely reflected in short-term markets. In order to grow forward markets, there is a need for long-term predictability for investments in both new generation capacities and the extension of the existing ones. However, there is a fragmentation of forward markets at European level. We therefore support the European Commission's initiative to create virtual hubs and to update the provisions on the granting of long-term transmision rights. Incentivizing market participants to access instruments such as PPAs and CfDs is a solution to increase the share of renewables in the EU energy mix and to increase the liquidity of forward markets. On the other hand, encouraging investments in large renewable energy projects that are not accompanied by storage capacities or conversion capacities in other forms of energy may lead to a collapse in electricity prices, impacting long-term investments in band-generation capacity. We therefore call for the amendment of the provisions relating to the PPAs and CfDs so that all investments supported by Member States through these instruments in renewable sources of energy must be accompanied by storage capacity. The European Commission's proposals for PPA contracts only encourage investment in renewable sources of energy. Thus, other low environmental impact and greenhouse gases free generation capacities, such as nuclear capacities, remains inaccessible due to multiple barriers. We believe that support schemes for the promotion of PPAs should treat all low environmental impact and greenhouse gases free technologies equally. If the EMD does not meet the principle of technology neutrality it may end up creating artificial technology champions, running the risk of not maintaining energy prices at an affordable level for consumers nor ensuring a long-term investment environment for energy supplies. Furthermore, given the minimum 30 years lifetime of nuclear power plants (with the possibility of extension by refurbishment), there should be the possibility of PPA contracts for longer periods than the current ones (10 15 years), in order to cover as much of the lifetime of the production capacities as possible. We also propose to include high-efficiency cogeneration, using natural gas or natural gas in combination with hydrogen, among the generation technologies that are eligible to be supported by Member States through contracts such as PPA and CfD. In terms of eligible capacities, we support the European Commission's approach to allow the use of CfDs for both new generation capacities and refurbished units. We propose the adoption of mechanisms which reward the reliability of power plants, one example being the capacity market. This encourages, on the one hand, investments in environmentally friendly band-generation capacities and, on the other, innovative solutions, such as virtual power plants (VPP-s), which can compensate the variability of renewable sources. On the other hand, we believe that electricity suppliers should secure a large part of their electricity supply to final customers through forward contracts, but they should be given the predictability necessary to conclude these contracts. Currently, we believe that it is a reluctance on the part of suppliers to enter into such long-term contracts. The main reason for this is the possibility of unilateral termination of electricity supply contracts by end consumers without penalty. Furthermore, we support the idea of giving end-users the possibility to choose fixed price - fixed term contracts. Flexibility We support the European Commission's proposal to make a report every 2 years analyzing the need for flexible electricity system capacity over the next 5 years. Given that the flexibilization of the energy sector involves a broad process involving all part
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